JUDGMENT OF 30. 9. 1975 - CASE 50/74 ASMUSSEN v COMMISSION AND COUNCIL

In Case 50/74,

THE COURT (Second Chamber) composed of: A. J. Mackenzie Stuart, President of Chamber, P. Pescatore, (Rapporteur) and H. Kutscher, Judges, Advocate-General: H. Mayras Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

The facts of the case, the procedure, the conclusions and the submissions and arguments of the parties may be summarized as follows:

I — Facts

At its 204th meeting, held in Brussels on 20 July 1972, the Council of the European Communities, with regard to the future rules relating to staff of Categories C and D paid from the appropriations for research and investment, approved the granting to the Commission of an overall budgetary provision of 600000 units of account to enable it, first, to improve the financial situation of local staff at Ispra, while leaving unchanged their legal status. Moreover, it was agreed that the Commission would examine, with the Committee of Permanent Representatives, whether, within the limit of this 600000 units of account, improvements should also be made for certain establishment staff at Ispra on condition that serious divergences of position were removed and that there were no repercussions in other establishments in the Joint Research Centre.

The measures put forward by . the Commission to achieve these objectives were examined by the Committee of Permanent Representatives at its meeting on 31 January 1973.

At its 226th meeting, held in Brussels on 5 February 1973, the Council, with regard to the allocation of the amount of 600000 units of account as between local staff and establishment staff at Ispra to be granted in the form of differential allowances, gave its approval, without discussion, to the measures put forward by the Commission and set down the following basic figures:

a) Financial measures to benefit a certain number of local staff at Ispra (approximately 120), carrying out duties of a level identical to those of the two highest grades of establishment staff: 150000 u.a., In this connexion also some instances of establishment staff who were undergraded (approximately 10) could be regularized as well: 20000 u.a.;

b) Allowance for the secretarial and switchboard duties of the staff concerned: 42000 u.a. (46 local staff, 80 establishment staff);

c) Financial measures allowing a salary increase (averaging 7 to 8 %) for all local staff and establishment staff at the Ispra centre: 388000 u.a. (307 local staff, 421 establishment staff).

In accordance with Article 90 (1) of the Staff Regulations the applicants on 3 April 1973 lodged a request with the Commission that the increase in salary granted to establishment staff at Ispra should be extended to all establishment staff.

This request was rejected by the Commission on 8 August 1973.

Pursuant to Article 90 (2) of the Staff Regulations, the applicants by a memorandum of 29 October 1973, registered on 30 October, brought before the Commission a complaint against its refusal to grant their request of 3 April 1973.

This complaint was rejected by the Commission which informed the applicants accordingly by letters of 1 April 1974, which reached them between 18 April and 24 May.

In the letters the Commission confirms in full the terms of its reply of 8 August 1973 to the effect that in its decision of 20 July 1972, the Council expressly specified amongst which staff the appropriation of 600000 units of account made available to the Commission was to be distributed; the Commission was only able to implement this decision without varying it in any way. In addition, the Commission assured the applicants that some time before it had already brought before the Council proposals particularly aimed at eliminating disparity in the conditions of employment of different categories of staff.

II — Written procedure

The joint application of the 59 applicants was deposited at the Court Registry on 10 July 1974.

The written procedure followed the normal course.

On hearing the views of the Advocate-General the Court (Second Chamber) decided to open the oral proceedings without any preparatory inquiry.

III — Conclusions of the parties

The applicants claim that the Court should:

annul the decision of the Commission dated 1 April 1974;

rule that the Council should pay them an allowance equal to the increase in salary granted to the establishment staff at Ispra in the same position under the Staff Regulations as themselves,

order the defendants to pay the costs.

The Commission contends that the Court should:

rule that the application is inadmissible or unfounded;

order the applicants to pay the costs.

The Council contends that the Court should:

reject the application on all its arguments;

order the applicants to pay the costs.

IV — Submissions and arguments of the parties during the written procedure

A — Admissibility

The Commission argues that by its decisions of 20 July 1972 and 5 February 1973 the Council had fixed the allocation of the 600000 units of account and that the Commission itself had no option to vary this allocation or to desist from implementing these decisions; the purely executory measures which it had to take could not have affected the applicants adversely. Therefore the Commission took no decision which caused them any harm and it cannot be found guilty of any conduct contrary to the rights which the staff possess under the rules applicable to them.

In addition, the position of the applicants is so ambiguous that their applications are void for want of a sufficient interest The applicants in fact claim that the Commission misused its powers in granting to the establishment staff at Ispra an increase in salary without any justification based on local circumstances but seek to have granted to them an allowance equal to these very financial benefits. If, hypothetically, there was an illegal act, the applicants may not, on the basis thereof, claim that another illegal act should be committed for their benefit in disregard of the same rule, Article 94 of the Conditions of Employment of Other Servants of the Communities which they allege is infringed.

The main basis of the appeal, Article 94 of the Conditions of Employment of Other Servants of the Communities, provides that the conditions relating to the remuneration of establishment staff of the Joint Nuclear Research Centre at each place of employment shall be determined taking into account local practice. The existence or absence of circumstances which can affect only persons working at Ispra can therefore produce no effect on the rights of establishment staff working in Karlsruhe; therefore the latter cannot prove a sufficient legal interest in taking proceedings in a case which does not concern them.

The applicants believe that the restrictive interpretation of a legal interest in taking proceedings relied on by the Commission does not conform to the usual interpretation of this concept adopted by the Court of Justice. Any member of the establishment staff who suffers from discriminatory treatment following an illegal decision or a decision void for misuse of powers certainly has an actual and present interest in having this decision annulled and obtaining damages commensurate with his loss.

An annulment order would have the effect of rendering inapplicable not the decision to determine the amount of the remuneration of the establishment staff but the separable decision to allocate the ascertained sums only between the establishment staff at Ispra; thus the decision can only be implemented by an allocation for the benefit of all the establishment staff thereby re-establishing the balance on a secondary level.

The position of the applicants is in no way contradictory. Either the misuse of powers should be recognized and the allocation of the overall budgetary provision should be made taking into account the applicants or else, if they have not formally infringed Article 94 of the Conditions of Employment of Other Servants of the Communities, the defendants have acted in breach of the general principle of the relative equality to be maintained between all establishment staff by référence to the local remuneration and as the allocation made solely to the establishment staff of Ispra remains in being, all the others should receive the same rate of increase.

B — Substance

1. The application for annulment

The . applicants maintain that the decision of the Commission of 1 April 1974 infringes Article 94 of the Conditions of Employment of Other Servants and is void for misuse of powers.

a) On 20 July 1972 the Council authorized the Commission to allocate an overall budgetary provision of 600000 units of account in order, in the first place, to improve the financial position of local staff at Ispra and, secondly, to eliminate serious divergences existing to the detriment of certain establishment staff at Ispra. The Commission decided to use this overall budgetary provision to undertake not only a readjustment of the salaries of the local staff but also various other operations including in particular a general increase in salaries for all local staff and establishment staff at Ispra. The Commission thereby went beyond the powers conferred upon it by the Council and moreover created discrimination between the establishment staff at different places of employment.

b) Even if the Commission acted within the scope of the powers conferred by the Council, Article 94 of the Conditions of Employment of Other Servants of the Community placed it under an obligation to take into account local practice in allocating the allowance between the establishment staff. The increase in salary granted to all the establishment staff at Ispra was effected without any local circumstances bringing any change into the financial situation existing in Italy.

The Commission maintains that the complaints of the applicants are unfounded.

a) With regard to the allegation of misuse of powers, it should be stated, in the light of the observations submitted with regard to the admissibility of the action, that the decision of the Council of 20 July 1972 was in no way altered with regard to the geographical extent of the financial measures while the persons to receive these increases and the amounts to be granted to them were set out in detail or fixed by the decision of the Council of 5 February 1973. Therefore the argument of exceeding its mandate by a decision of a chiefly budgetary nature is without foundation.

b) With regard to the allegation of discrimination it should be noted that the increase granted to establishment staff at Ispra was within the wider context of the rectification of quite specific discriminatory situations and of the salary increase to be granted to local staff. For this latter operation, the Commission did not need special permission from the Council since it had received the necessary appropriation at the time of the decision of 20 July 1972 and the appropriate powers were conferred on it by Article 79 of the Conditions of Employment of Other Servants. The intention to avoid further discrimination between local staff and establishment staff at Ispra caused the Commission to ask the Council that the establishment staff might receive the same increase; because of the particular situation of the Ispra establishment, the remuneration of the two categories of staff has always been calculated on the same criteria.

c) The need to increase salaries was essentially due to the quite substantial differences in the salary increases which had already occurred at the different centres and to the increase in the cost of living in Italy in comparison with Germany. The Commission had therefore quite logically asked that the allocation of the appropriation 600000 units of account be made equally in favour of the local staff at Ispra and consequently in favour of the establishment staff at Ispra since these two categories were linked to the same criteria in respect of the movement of their salary scales. These conditions, based on the collective agreement of the ‘metalmeccanici’ are nevertheless not the sole and exclusive ground for increase. Whilst the Council must ‘take into account’ this collective agreement it is not obliged to abide by it; it can also take into consideration other ‘local factors’ which manifest themselves in a general increase in the cost of living which still does not figure in the collective agreement renegotiated every two years.

The Council observes that the act challenged in the present action emanates from the Commission and the Council could therefore ask to be struck out.

a) In making an allocation between all the establishment staff at Ispra, not only amongst certain of them, of the amount of 600000 units of account, the Commission has not gone beyond the mandate conferred upon it by the Council on 20 July 1972; in fact, the meeting of 5 February 1973 re-examined the decision of 20 July 1972.

b) The argument based on an alleged disregard of ‘local practice’ and consequently on an alleged infringement of Article 94 of the Conditions of Employment of Other Servants relies on excessive regard for formalities. The Council attaches more weight to the fact that the remuneration shall be determined ‘at each place of employment’ than to the fact that it must ‘take into account local practice’; in addition this expression refers rather to certain details of the remuneration (monthly basis, weekly payment, existence of a salary scale etc.). It in no way follows from the Conditions of Employment of Other Servants that the remuneration of establishment staff may only be altered in the event of change in the local salaries or that there exists an absolute standard for alteration. In the absence of a national research centre, it was necessary at Ispra to resort to computation on the basis of the most nearly identical collective agreement, that of the ‘metalmeccanici’ and more generally the movement of salaries in Italy. Other factors also had to be considered. Nevertheless the Council has not found any substantive rule to be followed in this respect either in Article 94 of the Conditions of Employment of Other Servants (for establishment staff) or in Article 79 (for local staff). Therefore the decisions of the Council of 20 July 1972 and of 5 February 1973 infringe no legal provision.

c) With regard to the complaint of discrimination, it should be stated that according to the case-law of the Court of Justice, discrimination can exist only in cases of unequal treatment of equal situations but not in cases of different treatment of situations which are not comparable.

In addition, the idea that differences in remuneration of establishment staff at various centres can constitute discrimination is contrary to substantive law which provides, in Article 94 of the Conditions of Employment of Other Servants, that remuneration shall be determined at each place of employment.

The applicants adduce not the slightest proof of the existence of discrimination against them either with regard to their right to receive the same increases or the same remuneration as the establishment staff at Ispra or as to their lagging behind the latter.

In their reply, the applicants take note of the declaration of the Council that its decision of 5 February 1973 modified its previous decision of 20 July 1972; they regard this as confirmation that the proposal of the Commission exceeded the mandate conferred by the decision of the Council of 20 July 1972. The manifest misuse of powers which vitiates the proposal of the Commission, ratified without discussion by the Council, necessarily entails the nullity of the decision of the Council of 5 February 1973 and, consequently, the annulment of the decision at issue here.

Article 94 of the Conditions of Employment of Other Servants gives the Council the right to determine different conditions of remuneration for each place of employment but places it under an obligation to do this within the limits of local practice; these conditions comprise essentially the methods of calculation and the amount of remuneration and not merely subsidiary factors.

On its own admission the Commission's decision to increase the remuneration of establishment staff at Ispra was taken on the basis of considerations which were totally foreign to local practice and was for this reason clearly vitiated by misuse of powers.

The Commission denies any misuse of powers contending that it submitted perfectly normally its own opinions to the Council which took into account the relevant factors.

The extremely restrictive interpretation relied on by the applicants of the notion of ‘local practice’, which the Council must ‘take into account’ in particular for determining the conditions of remuneration, conflicts with the actual wording of Article 94 of the Conditions of Employment of Other Servants. The Community authorities have already applied a different interpretation by working, for the remuneration of the staff at Ispra, on the basis of the ‘metalmeccanici’ agreement which is a national collective agreement; the same interpretation has been retained with regard to the salary increases in question.

The applicants show excessive regard for formalities by treating strictly ‘local practice’ as equivalent to the application of the ‘metalmeccanici’ agreement.

The Council observes that its decision of 20 July 1972 left a margin of discretion for the Commission which was responsible for putting the decision into operation; finally, a fresh decision was taken by the Council following examination of the proposals of the Commission by the Committee of Permanent Representatives, in the presence of the Commission, within the framework of faithful implementation of the mandate conferred and by a procedure which was not challenged and which could not be challenged. The mandate was carried out and not exceeded.

With regard to the complaint of infringement of Article 94 of the Conditions of Employment of Other Servants it should be stated that the application thereafter appears to be directed against the decision of the Council of 5 February 1973 and no longer against a measure of the Commission.

As to the substance of the case, it is clear from the use of the expression ‘taking into account…’ that the text referred to precludes any automatic conversion of local practice into a legal provision. Furthermore, the extent of the concept of local practice can only be assessed after taking into account what is the object of the rules in each case. In particular it would appear difficult to accept that the remuneration of establishment staff at Ispra can only vary according to factors exclusively limited to the situation of this establishment to the complete exclusion of other points of comparison, such as the purchasing power of salaries in the region in question and the movement of salaries on a general level in the country where the establishment is situated.

2. The application for damages

The applicants maintain that by granting financial increases solely to establishment staff at Ispra to the detriment of all other establishment staff, the Council acted in a manner prejudicial to their interests and that they have a right to have this imbalance redressed by being granted compensation equal to the financial advantage granted, even if not by a misuse of powers, to the establishment staff at Ispra.

Doubtless, Article 94 of the Conditions of Employment of Other Servants does not provide for the mathematical equality of remuneration at the different establishments while permitting inequality at a primary level because of the differences in local conditions; however this inequality at a primary level is counterbalanced by an implied requirement of equality at a secondary level under the general principle of equality of treatment. This equality at a secondary level implies that identical criteria for determining remuneration shall be applied to different situations; the principle was breached once the Council ceased to work on the basis of changes in the remuneration of the ‘metalmeccanici’.

In addition, the Commission bears the responsibility for having disappointed, albeit involuntarily, the ligitimate expectations of the applicants, in giving as its grounds for its refusal to grant their application merely the statement, which has been contested by the Council, that the distribution of the overall budgetary provision conforms to the decision of the Council of 20 July 1972, without any reference to the decision of 5 February 1973, which is claimed to modify the former decision.

The Commission states that the first part of the request for compensation does not concern it directly. So far as the point is relevant, however, it observes that the difference in the salaries paid to the establishment staff at Karlsruhe and at Ispra arises from the rules to which these officials are subject because of their place of employment The proof is that the establishment staff at Ispra did not demand to be granted the more substantial increases which their counterparts at Karlsruhe have received from 1971 to the present day.

In this case therefore there is no discrimination; moreover the applicants have shown no objective proof of the discriminatory treatment which they claim to have suffered.

With regard to the alleged responsibility of the Commission for having disappointed the legitimate expectations of the applicants it should be noted that the applicants have given no evidence of any misconduct on the part of the Commission or even suggested it.

The Council maintains that it cannot be accused of misuse of powers in this case; furthermore it has not been guilty of any breach of the principle of non-discrimination or of upsetting a balance at any level.

The Staff Regulations of Officials and the Conditions of Employment of Other Servants ensure a prohibition on discrimination but also provide exceptions for certain categories of servants because of the special nature of the conditions to be observed when they are appointed; this applies to Article 94 of the Conditions of Employment of Other Servants. Since they are provisions derogating from the general rule according to the different places of employment, any automatic and simultaneous adaptation of the remuneration of servants at different establishments is inconceivable; it would only be possible from a highly improbable coincidence of the various elements of local practice which the Council must take into account.

V — Oral procedure

The parties submitted their oral observations at the hearing on 29 May 1975.

The Advocate-General delivered his opinion at the hearing on 26 June 1975.

Law

Admissibility

1. This action, brought by 59 members of the establishment staff ot the Joint Nuclear Research Centre employed at the Centre at Karlsruhe, is for the annulment of measures taken by the Council and the Commission allocating an overall budgetary provision of 600000 units of account in order to improve the financial situation of local staff and establishment staff working at the Centre at Ispra with, in consequence, either the inclusion of staff of the same category at other centres in the allocation of the provision, or the granting to those 59 members of equivalent increases by way of damages.

2. The applicants have brought their action against the Council and the Commission simultaneously but have not clearly defined the act adversely affecting them within the meaning of Article 90 of the Staff Regulations of Officials applicable by analogy under Article 46 of the Conditions of Employment of Other Servants of the Communities.

3. It is therefore necessary in the first place to establish what is the subject-matter of this action.

4. On 20 July 1972 the Council consented to make available to the Commission an overall budgetary provision of 600000 units of account in order to improve the financial situation of local staff and of certain establishment staff at Ispra.

5. Following an exchange of views between the Commission and the Committee of Permanent Representatives, and acting on a proposal of the Commission, the Council on 5 February 1973, set out in detail the distribution of this overall budgetary provision specifiying on the one hand the staff who were to benefit and on the other hand the amounts to be granted to each of the categories of staff thus defined.

6. On 3 April 1973 the applicants brought before the Commission a request that the benefit of the increase in salaries granted to the establishment staff at Ispra should also be granted to establishment staff at other establishments of the Joint Research Centre.

7. Since this request was rejected by the Commission on 8 August 1973, the applicants, by a memorandum of 29 October 1973, registered on 30 October, brought a complaint before the Commission against its refusal to accede to their request.

8. This complaint was rejected by the Commission which so informed the applicants in letters of 1 April 1974 which reached them between 18 April and 24 May.

9. A joint application directed against the Council and the Commission jointly, was lodged at the Court Registry on 10 July 1974.

10. As regards the Commission, this application seeks the annulment of the final refusal given by the Commission on 1 April 1974.

11. As regards the Council, the applicants formulated claims of a financial nature for either the allocation of the overall budgetary provision amongst all the staff in the same position as the establishment staff at Ispra or for the payment, by way of damages, of a ‘compensatory amount’ to re-establish the balance between all the staff employed at different establishments of the Joint Research Centre.

12. For its part, the Commission challenges the admissibility of the application brought in the manner described above.

13. It believes that as it only acted to ensure the execution of the measures ordered by the Council, it has not taken any decision capable of adversely affecting the applicants.

14. For its part, the Council has raised no objection as to admissibility.

15. While substantial doubts may arise with regard to the admissibility of the application, particularly with regard to the failure to specify the subject-matter thereof, nevertheless it should be taken into consideration that this ambiguity arises principally from the methods adopted in coming to the decision in this case; these were such that the measure in question took shape gradually with two institutions, the Council and the Commission, being involved and with the Committee of Permanent Representatives acting as intermediary.

16. In these circumstances it was particularly difficult for the applicants, ill informed of the progress of the decision concerning them, to know to which institution they should apply and to decide at what moment action on their part could affect a measure which might seem to them not to be open to challenge.

17. For this reason there cannot be held against them the fact that they acted simultaneously against the Council and the Commission, that they addressed their initial complaint to the Commission alone, which is their direct employer, and that they chose as the subject-matter of their application, preparatory measures which gave rise to implementing decisions only after the application had been brought.

18. is In these circumstances the substance of the application must be examined.

Substance

19. The applicants maintain in the first place, that there should be left out of consideration the decision taken on 5 February 1973 by the Council, acting on a proposal from the Commission, because the precise allocation of the overall budgetary provision to different categories of staff at the Centre at Ispra is contrary to the provisions of the originating decision of the Council taken on 20 July 1972.

20. No contradiction at all is to be found between the decision of 20 July 1972 and that of 5 February 1973.

21. In fact in its decision of 20 July 1972, the Council decided, in a preliminary manner, without fixing more precise details, on the allocation of an overall budgetary provision of 600000 units of account which was intended to improve the financial situation of local staff and certain establishment staff at Ispra.

22. The proposal of the Commission which gave rise to the decision of the Council of 5 February 1973 reflects the agreement made between the Commission and the Committee of Permanent Representatives relating to the details of the distribution of the amount in question.

23. It appears from this sequence of events that the decision of 20 July 1972 was, on the part of the Council, only in the nature of a preparatory decision on principle so that the decision of 5 February 1973 must, for the appreciation of the situation submitted to the Court, be regarded as expressing the final will of the Council.

24. This submission must therefore be rejected.

25. Secondly, the applicants maintain in support both of the action for annulment and of the action for compensation, that the Council and the Commission went beyond the scope of the measures permitted by Article 94 of the Conditions of Employment of Other Servants of the Communities with regard to remuneration, in favour of the establishment staff at Ispra.

26. More precisely they argue that this provision places the institutions under an obligation to determine the salary scales taking into consideration ‘local practice’.

27. For the establishments other than that at Ispra, this local practice had been defined by reference to the remuneration of comparable staff employed in national research centres whereas in the absence of such a centre in Italy, they had been determined by reference to the collective agreement of workers in the metal and engineering sector (metalmeccanici).

28. It is established, according to the applicants, that at the time when the increases were granted to the staff at Ispra, this agreement, which is the only decisive criterion for ascertaining ‘local practice’ for the staff of this establishment, had not been changed.

29. It is for reasons outside this criterion, that is to say, the increase in the cost of living in Italy and the lessening of the differentials between the staffs working within the establishment at Ispra that the institutions granted the increase in question.

30. They are said thereby to have created discrimination to the detriment of comparable staff at other establishments whose financial situation was linked to that of the staff of national research centres.

31. Under Article 94 of the Conditions of Employment of Other Servants of the Community ‘the Council … acting on a proposal from the Commission … and taking into account local practice, shall determine: (a) the conditions relating to the remuneration of establishment staff of the Joint Nuclear Research Centre at each place of employment; (b) the allowances, insurances, social security benefits and other similar benefits of whatever kind to which they shall be entitled.’

32. It is clear from this article, in the first place, that the conditions relating to remuneration are determined specifically ‘at each place of employment’.

33. Secondly, it appears that the taking into consideration of ‘local practice’ need amount to no more than a motivation, that is to say, a simple guide-line which in no way excludes the taking into consideration of other factors.

34. Thus, Article 94 confers on the competent institutions a wide discretionary power to adapt the conditions relating to remuneration of the local staff and of the establishment staff to the particular local circumstances of each of the establishments in question, taking into account the requirements which arise both from the internal working conditions of these establishments and from the considerations resulting from the economic and social situation within which the staff are placed.

35. Criticism may be levelled against the provisions adopted to this end in the light of a comparison with the conditions relating to remuneration of staff employed in the establishments within other Member States, only if it is established that there is, to the detriment of such staff, a misuse of powers committed by the Council and by the Commission in exercising the discretion granted to them by Article 94.

36. However, the applicants have adduced no proof showing that the competent institutions decided on the basis of factors apart from those which Article 94 allows or committed such a misuse of powers.

37. For that reason the application must be dismissed.

Costs

38. Under Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs.

39. The applicants have failed in their application.

40. However, under Article 70 of the Rules of Procedure, in proceedings by servants of the Communities, the institutions shall bear their own costs.

On those grounds, THE COURT (Second Chamber) hereby:

1 Dismisses the application;

2 Orders each of the parties to bear its own costs.