JUDGMENT OF 11. 7. 1968 — CASE 3/68 DE SCHACHT v COUNCIL

In Case 3/68

THE COURT (Second Chamber) composed of: W. Strauß (Rapporteur), President of Chamber, A. M. Donner (replacing A. Trabucchi) and P. Pescatore, Judges, Advocate-General: J. Gand Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Facts

The facts may be summarized as follows:

1) The applicant, who is at present an official in Grade Al in the Secretariat-General of the Council of the European Communities, entered the service of the Special Council of Ministers of the ECSC in 1952. He became subject to the first Staff Regulations of Officials of the ECSC (hereinafter referred to as ‘the former ECSC Staff Regulations’) with effect from 1 July 1956.

2) He was transferred to Brussels from Luxembourg, his first posting, by decision of 11 October 1960, which took effect as from 1 September 1960.

3) By a decision of 22 December 1961, based on Article 33 of the former ECSC Staff Regulations, the applicant was, at his request, given leave on personal grounds for a period of two years from 1 September 1960. From that date he was employed by the Councils of the EEC and EAEC as a servant of those Communities under a letter of engagement of the so-called ‘Brussels contract’ type.

4) By Decision No 101/62 of the Secretary-General of the Councils of the European Communities of 11 July 1962, the applicant was integrated in Grade Al, Step 5, as an official of the Communities, namely of the EEC and EAEC. This decision states that it ‘involves the termination of the service of the person concerned as an established official of the European Coal and Steel Community, taking into account the application of Articles 102(5) and 103 of the Staff Regulations [of Officials of the EEC and EAEC]’ — hereinafter referred to as ‘the EEC-EAEC Staff Regulations’ — and that it ‘shall take effect as from 1 January 1962’.

5) By letter of 30 August 1967 addressed to the Secretary-General of the Council, the applicant requested reimbursement of the amount standing to his credit in the provident fund of the ECSC. This request was rejected by letter of 30 October 1967 from the Secretary-General.

6) On 23 November 1967 the applicant wrote asking the Secretary-General to reconsider his decision in the matter. On failing to receive a reply, he made the present application which was lodged at the Court Registry on 29 Janary 1968.

II — Conclusions of the parties

The applicant claims that the Court should:

‘1. Establish and, in so far as is necessary, rule that Decision No 101/62 of the appointing authority involves the termination of the applicant's service as an official of the ECSC; 2. Therefore establish and, in so far as is necessary, rule that both the provisions of Article 62(a) and (b) of the former General Regulations of the ECSC and those of Article 12(a) and (b) of Annex VIII to the new ECSC Staff Regulations were applicable to the applicant; 3. Rule that the decision of 30 October 1967 of the appointing authority refusing to apply those provisions in favour of the applicant is null and void; 4. Consequently, rule that [the Council] shall be obliged to pay to the applicant the sums resulting from the application of the provisions referred to in paragraphs 2 and 3 above.’

The defendant contends that the Court should:

‘— take note that the defendant does not intend to dispute the admissibility of the application; — rule that the application is unfounded and dismiss it; — make an order as to costs in accordance with the relevant provisions.’

III — Submissions and arguments of the parties

The submissions and arguments of the parties may be summarized as follows:

The applicant relies on Article 62(a) and (b) of the former General Regulations of the ECSC — which supplement the former Staff Regulations of the ECSC and are hereinafter referred to as ‘the General Regulations’ — and Article 12 of Annex VIII to the Staff Regulations of Officials of the ECSC (hereinafter referred to as ‘the new ECSC Staff Regulations’) which entered into force on 1 January 1962. These provisions lay down in particular that an official ‘those service terminates otherwise than by reason of death or invalidity’ and who fulfils certain other conditions shall be entitled on leaving the service to payment of the sum standing to the credit of his account under the provident scheme of the ECSC at the date when the former ECSC Staff Regula tions entered into force, together with the aggregate amount deducted from his salary in respect of his pension contributions.

The applicant considers that he fulfils all those conditions; in particular, as provided for by Decision No 101/62, he ceased to be an official of the ECSC on 1 January 1962.

It follows from the abovementioned conditions that they apply to every event terminating service and exclude only certain expressly-mentioned cases in which there is an accumulation of the sums in question and of the payment of certain pensions.

In these circumstances, the contested decision wrongly states that at no time was there a break in ‘the continuity of service under the Staff Regulations’.

The disputed decision conflicts with the judgment of the Court in the Campolongo case (Rec. 1960, pp. 825 and 826). That judgment recognized the right of an official in a situation comparable with that of the applicant to benefit from the provisions of Article 62(a) and (b) of the General Regulations, stating that ‘it is only in the hypothetical case of an agreement unifying or merging provident and pension funds for all the Communities that it will be possible to recognize’ the right of the institutions to safeguard the interests of such a common fund; in fact, no such agreement has been concluded.

The application of the provisions referred to would not prejudice the interests of the defendant, as it would remain free, in the subsequent calculation of the applicant's pension, to take into account only the years of service completed after 1 January 1962.

Finally, the applicant alleges that the contested decision infringes the general principles applicable to European public service relating to the calculation of the retirement pension of officials who, having left the service of one of the institutions, have been re-employed in that institution or in another institution of the Communities. These principles stem in particular from Articles 52 and 62(a) and (b) of the General Regulations and from Articles 4 and 12 of Annex VIII to both the new ECSC Staff Regulations and the EEC-EAEC Staff Regulations. These provisions entitle such officials to decide themselves whether or not they intend, for the purposes of calculating their retirement pension, to retain the benefit of their total length of service with the Communities. In this case, the applicant was deprived of this option.

The dafendant first of all sets out the different formulae used by the Secretary-General — who was entrusted in January 1958 with the task of organizing the Secretariat of the Councils of the EEC and EAEC — when employing officials established under the former ECSC Staff Regulations:

a) Certain of those officials remained completely subject to those Staff Regulations; the Secretary-General merely changed their place of appointment.

b) Certain other officials — including the applicant — were granted leave on personal grounds by the Secretary-General acting on behalf of the Council of the ECSC; in respect of the same period the Secretary General, acting this time on behalf of the Councils of the EEC and EAEC, entered into a so-called ‘Brussels’ contract with them. Owing to this formula, it was possible, where necessary, to grant the persons concerned a higher remuneration than that which they had received as officials under the ECSC Staff Regulations; in the same way, in respect of officials whose place of origin had been Brussels before their employment in the ECSC, the Brussels contract could provide for the payment of a severance grant by reason of the fact that the persons concerned had resided in Luxembourg before their employment by the new Communities.

c) Finally, certain officials whose place of origin had been Brussels deemed it preferable to resign as officials of the ECSC in order to become subject solely to the ‘Brussels’ contract system.

d) Following the entry into force of the EEC-EAEC Staff Regulations, the position of the officials referred to in (b) and (c) above was regularized in the following manner:

The officials referred to in (b) were integrated as officials of the EEC and EAEC; by reason of such integration their service as officials of the ECSC terminated but the transitional provisions of the new ECSC Staff Regulations were applicable to them.

The officials referred to in (c) above were established under the EEC-EAEC Staff Regulations under the same conditions as a servant recruited from outside the institutions. They did not therefore obtain the advantages of the transitional provisions of the new ECSC Staff Regulations.

The defendant sets out the following points of law:

The applicant did not lose his status as an official of the ECSC on his integration under the EEC-EAEC Staff Regulations. As his service was not terminated under the former ECSC Staff Regulations, they were not applicable to him. He cannot any longer rely on the advantages of the new ECSC Staff Regulations under which he was never integrated.

With particular reference to Article 62 of the General Regulations, the ‘termination of services’ on which the applicant relies is a concept defined in Article 40 of the former ECSC Staff Regulations. Among the situations to which this provision refers, only ‘resignation’ may be taken into consideration. In this connexion, Article 41 of the same Regulations makes a distinction between compulsory resignation — which should be ignored in this case — and voluntary resignation by the servant. In this case, the latter can no longer be entertained, as the person concerned did not ‘state unequivocally in writing his intention to leave the service of the institution definitively’. In sum, there was no termination of service within the meaning of Article 62. The same results obtain with regard to Article 12 of Annex VIII to the new ECSC Staff Regulations.

In order to counter the argument that the above mentioned provisions have a general scope, in the sense that they are always applicable in the absence of any of the exceptional cases for which they provide, the defendant states that:

the General Regulations were unable to provide for the applicant's case, as at that time there was only one Community;

however, such a case was envisaged by Article 102(5) of the EEC-EAEC Staff Regulations, which refers to Articles 92 to 105 of the new ECSC Staff Regulations;

regard should be had, from among those provisions, to Article 99(4) which includes the principle of the continuity of a career in different Communities. This provision is not limited to the severance grant properly so-called. It refers to Article 12 of Annex VIII to the same Regulations, which also deals with the reimbursement of the sum standing to the credit of the person concerned in the pension fund.

Mr Campolongo's case was different, as that official actually resigned from the service of the ECSC.

Under the complaint of infringement of the general principles applicable to European public service the applicant bases his arguments essentially on provisions which, as has been shown, are not applicable to him; no more do the other provisions relied on refer to the position on the transition from the former ECSC Staff Regulations to the EEC-EAEC Staff Regulations. All the same, the applicant did not exercise ,-the ‘option’ to which he claimed to be entitled; it was not until several years after his integration as an official of the EEC and EAEC that he had second thoughts and made the claims which form the subject-matter of this application.

The applicant replies by describing the evolution of the policy adopted by the administration prior to the entry into force of the new Staff Regulations; he states in particular:

that he was not given leave on personal grounds straight away, but that the first measure taken concerning him at the time of his move to Brussels was his transfer, carried out under the former ECSC Staff Regulations;

that in 1960, for the purpose of clearly settling his position, he suggested several solutions to the administration, including leave on personal grounds and resignation; these suggestions were rejected in accordance with the policy generally adopted at the time by the administration;

that subsequently the administration's stand in the matter became inconsistent; in certain cases it chose the method of resignation, whereas in the applicant's case it preferred the solution of leave on personal grounds.

The applicant's integration under the EEC-EAEC Staff Regulations, in the same way as resignation, involved a break in the continuity of service under the ECSC Staff Regulations, which had existed up to the moment of integration.

The position of officials of the ECSC on leave on personal grounds is governed, inter alia, by Articles 92 to 105 of the new ECSC Staff Regulations, to which Article 102(5) of the EEC-EAEC Staff Regulations refers as provided for by Decision No 101/62. The applicant relies on Articles 93 and 98; these provisions, which closely follow Article 33 of the former ECSC Staff Regulations, show that up to 1 September 1962 he could have been re-integrated in a post corresponding to his grade under the ECSC Staff Regulations. From the fact that the administration did not follow this method, ‘it can only be concluded that by its Decision No 101/62 of 11 July 1962 it intended to achieve a break in the continuity of service under the ECSC Staff Regulations in the form of a sort of compulsory resignation sui generis.’

The applicants leave on personal grounds only came to an end on 1 September 1962. As this type of leave creates rights in favour of the person concerned, the administration was not able to put an end to it unilaterally except by way of termination of service equivalent to resignation. Moreover, the administration itself is responsible in the absence of formal resignation.

In the case of another senior official, the administration accepted his resignation and, on agreeing to its taking effect from 1 January 1962, itself ended the relationship under the Staff Regulations, which it claims has not happened in the applicant's case. In reality, however, the respective situations of that official and the applicant are comparable.

Resignation does not depend on the will of the official alone; it may only result from an administrative measure. In this case, such a measure, in respect of its scope and effects, could not differ from the decision as to integration. At that time the administration was necessarily of the opinion that that decision was equivalent to resignation. Otherwise, taking into account Article 98 of the new ECSC Staff Regulations, it should have maintained the applicant's position as an official of the ECSC until 1 September 1962, the date on which the leave expired, and integrated him — as it did — as an official of the EEC and EAEC with effect from 1 January 1962. During the interval between these two dates, the applicant had the option of presenting his resignation and consequently of claiming the benefit of Article 62(a) and (b) of the General Regulations.

The defendant is wrong in referring to Article 99(4) of the new ECSC Staff Regulations. In fact, this provision refers to emoluments of a completely different nature, namely the severance grant which ‘must logically be regarded as being compensation for the loss of earnings of the servant during the time normally required to find a new post’ (judgment in the Campolongo case, loc. cit., p. 824).

The defendant replies that at the time of the events in question the administration was preoccupied with ensuring the maximum advantages for officials recruited for Brussels. The fact that it tried several methods in order to attain this does not provide ground for criticism on the part of the persons concerned.

The decision of 22 December 1961 annulled with retroactive effect the decision of transfer of 11 October 1960, which cannot therefore play any part in this case.

The solution of leave on personal grounds was adopted because the continuance of the separation allowance for servants transferred to Brussels and for whom Brussels was their place of origin — as it was in the applicant's case — could have been questioned by the departments of financial control.

The applicant would have been entitled to present his resignation, despite the unfavourable attitude of the administration; that he did not so so was without doubt in order not to lose rights already acquired. Likewise, the different solution adopted in the case of other officials stems from the freedom of choice exercised by them.

It cannot be said that leave on personal grounds granted in the circumstances of this case was capable of extending beyond the date on which integration under the EEC-EAEC Staff Regulations took effect. In fact, from that moment the leave lost all point. Moreover, the reason for leave on personal grounds must be specified; under the terms of all the Staff Regulations this type of leave is only granted in exceptional circumstances and at the official's request. The decision of 11 July 1962 does not constitute a'sort of compulsory resignation sui generis'. It merely recognized the termination of service with the ECSC automatically resulting from integration under the EEC-EAEC Staff Regulations.

The judgment in the Campolongo case was not able to take into account the transitional provisions of the EEC-EAEC Staff Regulations which had not then been enacted; those provisions defeat the applicant's argument.

The applicant specifies the financial benefits resulting for him from the administrative solution which he considers that he is entitled to claim.

The defendant, for its part, presents a synoptic table of the advantages and disadvantages which may result, for officials of the Special Council of Ministers of the ECSC established under the former Staff Regulations of that Community, from the various administrative solutions adopted at that time (simple transfer; leave on personal grounds; resignation).

IV — Procedure

The procedure followed the normal course. By decision of the President of the Court of 13 May 1968 under Article 26(3) of the Rules of Procedure, Judge A. M. Donner was designated to replace Judge A. Trabucchi who was prevented from attending.

On hearing the report of the Judge-Rapporteur and the views of the Advocate-General, the Court (Second Chamber) decided to open the oral procedure without any preparatory inquiry.

At the request of the Court (Second Chamber), however, the defendant produced at the hearing on 27 May 1968 certain documents referred to in the reply.

The parties presented oral argument at the hearing on 27 May 1968. During this hearing, the applicant for his part produced certain documents. Both parties availed themselves of the opportunity accorded by the Court (Second Chamber) to state their position in writing on the documents produced by the opposite party.

The Advocate-General delivered his opinion at the hearing on 25 June 1968.

Grounds of judgment

The applicant considers that he is entitled to payment of both the sum standing to the credit of his account under the provident scheme of the ECSC on the entry into force of the former ECSC Staff Regulations and the aggregate amount deducted from his salary in respect of his pension contributions during the period for which he was subject to the said Staff Regulations. In support of his application he relies on Article 62(a) and (b) of the General Regulations and Article 12(a) and (b) of Annex VIII to the new ECSC Staff Regulations, both of which provisions are of essentially identical scope and which provide for payment of the above-mentioned sums to an official who. fulfils certain conditions, one of which is that his service has terminated ‘otherwise than by reason of death or invalidity’. Contrary to the defendant's view, the applicant claims to have satisfied that requirement, by reason of the fact that under the very terms of Decision No 101/62 of the Secretary-General of the Councils, by which be became subject to the EEC-EAEC Staff Regulations, it ‘involves the termination of the service of the person concerned as an established official of the ECSC’.

The substance of this claim must be examined separately on the basis of each of the sets of Staff Regulations to which the applicant was successively subject, namely first the former ECSC Staff Regulations and the General Regulations and then the EEC-EAEC Staff Regulations.

(1). In respect of the former ECSC Staff Regulations and the General Regulations, it is not contested — nor can it be — that, by reason of his becoming subject to the EEC-EAEC Staff Regulations, the applicant's service as an official of the ECSC terminated ‘otherwise than by reason of death or invalidity’, in the words of Article 62 of the said General Regulations. However the expression ‘whose service terminates’ must be interpreted in the light of the former ECSC Staff Regulations, on the basis of which the General Regulations were adopted. Although Article 40 of those Regulations, which sets out the cases of ‘termination of service’, obviously could not refer to the case of the person concerned becoming subject to the Staff Regulations of Officials of another European Community, the applicant considers that such an event is tantamount to compulsory resignation, as provided for by Article 40 together with Article 41(B) of those Regulations. Under the terms of Article 41(B) a servant could be required to resign in a series of circumstances defined in Articles 27(1) and (2), 17 and 33 of the former ECSC Staff Regulations. However, none of those circumstances covers the applicant's position or is even remotely analogous to it. On the contrary, taken together those circumstances refer to situations in which the interest of the service conflicts with an official's continued membership of the staff, not only of the ECSC but of the Communities in general. Therefore the provisions of the former ECSC Staff Regulations and the General Regulations do not permit of a finding that the application is well founded.

(2). With regard to the EEC-EAEC Staff Regulations, it is appropriate to take as a starting point Article 102(5) thereof, which is expressly mentioned in Decision No 101/62 and which covers the applicant's case exactly, that is to say, the case of ‘a servant who, before these Staff Regulations entered into force was an established official of the European Coal and Steel Community and has been granted leave on personal grounds in one of the institutions of that Community in order to enter the service of an institution of the European Economic Community or of the European Atomic Energy Community’. Under the terms of that article, ‘The provisions of Chapter 1 of Title VIII’ of the new ECSC Staff Regulations, that is to say, Articles 92 to 105 of those Regulations, ‘shall apply’ to such a servant, ‘provided that this does not confer on him advantages greater than those which he would have enjoyed if he had been established in the same grade’ under the new ECSC Staff Regulations. Chapter 1, entitled ‘Transitional Provisions’, covers precisely those officials becoming subject to the new ECSC Staff Regulations at a time when they were subject to the former Staff Regulations of that Community. As the transitional provisions applicable to servants in the applicant's position have been thus assimilated to those applying to the abovementioned officials, it is appropriate to examine whether, by reason only of having transferred from one set of Staff Regulations to another while continuing to belong to the same Community, such officials may benefit from the provisions of Article 62(a) and (b) of the General Regulations and Article 12(a) and (b) of Annex VIII to the new ECSC Staff Regulations. In fact, if such is not the case, this application cannot be well founded, as it follows from Article 102(5) that the applicant may not claim advantages greater than those enjoyed by those officials mentioned above. It follows from the considerations set out under (1) above that Article 62 of the General Regulations does not apply to the applicant's position. Those considerations apply equally in respect of Article 12 of Annex VIII to the new ECSC Staff Regulations, the meaning of which moreover is specified by the heading ‘Severance Grant’. Further, Articles 92 to 105 of the new ECSC Staff Regulations do not refer either expressly or by implication to Articles 62 and 12 abovementioned. Although Article 99(4) of those Regulations refers to Article 12 of Annex VIII to those same Regulations, it appears from the first three paragraphs of Article 99 that it only refers to officials whose service with the ECSC comes to be terminated subsequently to their becoming subject to the new Staff Regulations. Furthermore, Article 99(4) contradicts the applicant's argument since it confirms the principle of the continuity of the career of a Community official by providing that ‘for the calculation of the severance grant provided for in Article 12 of Annex VIII, the period of service actually completed with the three European Communities before becoming subject to these Regulations shall be taken into account’. Further, this principle is repeatedly confirmed by the provisions of Articles 92 to 105 of the new ECSC Staff Regulations, which, as has just been stated, are applicable to the applicant. Thus Article 93 automatically confers the status of official, within the meaning of those Regulations, on any official within the meaning of the former ECSC Staff Regulations. Article 94, which is particularly relevant in this case as it refers, inter alia, to the pension scheme, provides that ‘an official integrated under Article 93 shall retain the seniority in the service acquired up to the date on which these Regulations enter into force’. In addition, the provisions of the EEC-EAEC Staff Regulations, which have been applicable to the applicant since 1 January 1962, are also based on the idea of the continuity of a Community career. In this connexion, it is sufficient to refer to Articles 2 and 3 of Annex VIII to the said Regulations, from which it appears that for the calculation of the retirement pension ‘the period of service as an official of one of the institutions of the three European Communities’ must be taken into account. Finally, the applicant's position is actually that of an official who has always belonged to one and the same Community institution. In fact, although at that time the Councils of the EEC and of the EAEC were legally distinct from the Special Council of Ministers of the ECSC, nevertheless from the beginning the three Councils were given a common infrastructure, directed by one and the same Secretary-General, to whom the applicant was answerable both before and after becoming subject to the EEC-EAEC Staff Regulations. It follows from the foregoing that it is no more possible to find a basis for the applicant's claim in the provisions which have been applicable to him since 1 January 1962.

(3). The applicant also alleges that the defendant's argument conflicts with the general principles applicable to European public service with regard to the calculation of a retirement pension, and that those principles protect the right of officials in positions comparable with the applicant's to decide themselves whether or not, for the calculation of their retirement pension, they wish to retain the benefit of their total period of service. Following this line of thought, the applicant refers to Articles 52 and 62(a) and (b) of the General Regulations and Articles 4 and 12 of Annex VIII to both the EEC-EAEC Staff Regulations and the new ECSC Staff Regulations. With regard to the scope of Articles 62 and 12 abovementioned, it suffices to refer to the considerations set out under (1) and (2) above. With regard to Articles 52 and 4 abovementioned, they refer to officials who after leaving the service of the Communities are re-employed by a subsequent measure distinct from that terminating their original service. Such cases are not comparable with the applicant's position in which the relationship under the Staff Regulations which bound him to one of the Communities has been brought to an end by the very fact of his becoming subject to the Staff Regulations of Officials of the other Communities.

(4). Finally, the applicant wrongly cites in his support the judgment delivered by the Court in Joined Cases 27 and 39/59 (Campolongo, Rec. 1960, p. 801 et seq.). In fact in those cases the official concerned was engaged by the European Investment Bank which is not an ‘institution’ within the meaning of Article 4 of the Treaty establishing the EEC and whose staff is therefore not covered by the EEC-EAEC Staff Regulations, as is evidenced by Article 1 thereof. It follows from all the foregoing considerations that the present application is unfounded.

(5). The applicant has failed in his application. Under the terms of Article 69(2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs. However, under the terms of Article 70 of the said Rules in proceedings by officials and servants of the Communities against institutions, the institutions shall bear their own costs.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 4 and 179 of the Treaty establishing the EEC; Having regard to Article 152 of the Treaty establishing the EAEC; Having regard to the Protocols on the Statutes of the Court of Justice of the EEC and of the EAEC; Having regard to the former Staff Regulations of the ECSC, which entered into force on 1 July 1956, especially Articles 17, 27(1) and (2), 33, 40 and 41(B); Having regard to the former General Regulations of the ECSC, which entered into force on 1 July 1956, especially Articles 52 and 62(a) and (b); Having regard to the Staff Regulations of Officials of the ECSC, which entered into force on 1 January 1962, especially Articles 92 to 105 and Articles 4 and 12 of Annex VIII thereto; Having regard to Regulation No 31(EEC), 11(EAEC), of the Councils adopting the Staff Regulations of Officials and the Conditions of Employment of Other Servants of those Communities (Official Journal No 45 of 14 June 1962, p. 1385/62 et seq.), especially Articles 91 and 102(5) and Articles 2 to 4 and 12 of Annex VIII thereto; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Articles 69(2) and 70; THE COURT (Second Chamber) hereby:

1 Dismisses the application as unfounded;

2 Orders the applicant to pay the costs of the proceedings, with the exception of those incurred by the defendant.