JUDGMENT OF 18. 3. 1975 — CASE 72/74 UNION SYNDICALE v COUNCIL

In Case 72/74 401

THE COURT composed of: R. Lecourt, President, J. Mertens de Wilmars (Rapporteur) and A. J. Mackenzie Stuart, Presidents of Chambers, A. M. Donner, R. Monaco, P. Pescatore, H. Kutscher, M. Sørensen and A. O'Keeffe, Judges, Advocate-General: G. Reischl Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

1. The facts and the arguments put forward by the parties during the written procedure may be summarized as follows:

I — Facts and procedure

According to Article 65 (1) of the Staff Regulations, the Council shall each year, in the light of a report by the Commission, review the remunerations of the officials and other servants of the Communities and during this review shall consider whether, as part of the economic and social policy of the Communities, remuneration should be adjusted.

At the time of this annual review, account is taken not only of the increase in the cost of living but also of the average increase in purchasing power in the Community, in such a way as to ensure for officials not only the maintenance of their purchasing power but also an increase, in real terms, in their salaries, justified by and parallel to the rise in the general standard of living in the Community.

For the purpose of eliminating the differences of view caused by this review, the Council on 20 and 21 March 1972 adopted a resolution by which it undertook, for a trial period of three years from 1 July 1972 to 30 June 1975, to fix the level of increase in Community remuneration within a bracket formed by two indices of the growth of remuneration in the public service in the Member States:

a so-called ‘specific’ index reflecting, in respect of a given sample of officials, the growth of the average nominal salary as compared to the increase in the cost of living; and

a so-called ‘total emoluments per head’ index in respect of public administrations, as published in national accounts.

These two Community indices are fixed on the basis of the weighted average of the data supplied by the corresponding national indices. In this weighting, the Italian figures amount, it seems, to 28 % (for the Community of the Six).

When this system was applied it became apparent that the Community specific index, which showed an average increase of 3.6 % in the purchasing power of national salaries during 1971/1972, showed an increase of 7.3 % during 1972/1973. When the cause of this disparity was sought, it appeared that the Italian specific index had made a considerable leap from one period to the next, which had had repercussions on the Community specific index. The reason lay in the fact that for the first period the Italian specific index only took into account basic salaries and certain permanent allowances, whereas for the following period, after a change in the financial regulations in the Italian public service, a whole series of additional advantages previously not taken into account were incorporated in the salaries.

According to the Commission and the applicant trade unions, these facts showed that the Community specific index was fixed on an incorrect basis for the reference periods 1971/1972 and 1972/1973, which determined the salaries for the periods 1972/1973 and 1973/1974.

The Commission and the applicants endeavoured to get the Council to correct what they considered to be an error affecting the calculation of salaries.

The Council refused to agree with them, maintaining essentially that it was not a question of an error of calculation but of normal consequences of the amendment of the legislation of a Member State.

It is this refusal, expressed in a meeting of the Council on 22 and 23 July 1974, which forms the subject-matter of this application for the annulment of that decision rejecting any proposal for the readjustment of the salaries of European officials, following the defectiveness of the specific index of one of the Member States, and recognition of the right to reparation for the loss suffered thereby.

The application, which was dated 20 September 1974, was lodged at the Court Registry on 23 September 1974. By a statement of 17 October 1974 the Council raised a preliminary objection of inadmissibility and requested the Court of Justice to rule on this point, under Article 91 of the Rules of Procedure. The applicants contend that the preliminary objection should be dismissed.

The Court decided to give a ruling on the preliminary objection.

On hearing the report of the Judge-Rapporteur and the opinion of the Advocate-General, the Court also decided that no preparatory inquiries were necessary.

II — Conclusions of the parties on the preliminary objection

The Council claims that the Court should declare the applicants' application to be inadmissible and order them to pay the costs.

The applicants contend that the Court should:

1) dismiss the preliminary objection of inadmissibility;

2) declare the application to be admissible or, alternatively, at least declare it to be admissible in so far as it concerns the recognition of the right to reparation of the loss suffered by the European officials and other servants and the determination of the the principle that compensation must be granted;

3) order that the main action be heard.

III — Submissions and arguments of the parties on the preliminary objection of inadmissibility

1. In the Council's view the application is inadmissible whatever its legal basis. A direct action under Article 91 of the Staff Regulations of Officials is open only to officials and servants (two judgments of 8 October 1974: Case 175/73, Union syndicale — Service public européen and Others v Council of the European Communities, and Case 18/74, Syndicat général du personnel des organismes européens v Commission of the European Communities, not yet reported), whilst a direct action under Article 173 of the Treaty is inadmissible both by reason of the nature of the measure criticized and because the measure is not of individual concern' to the applicants. The second paragraph of Article 173 of the EEC Treaty only authorizes private parties to make applications for annulment to the Court if 1. the application is directed against ‘decisions’ addressed to the applicants, or 2. measures in the form of a regulation or a decision addressed to another person are ‘of direct and individual concern’ to the applicants. The application is in the first place inadmissible because the measure criticized must be interpreted as an implied rejection by the Council of the proposal by the Commission on 21 March 1974 for a regulation for the retroactive readjustment of remuneration as from 1 July 1972. It is therefore a measure of general scope ‘applicable not to a limited number of persons, defined or identifiable, but to categories of persons viewed abstractly and in their entirety’, according to the judgment of the Court of 14 December 1962 in Joined Cases 16 und 17/62, Confederation nationale des producteurs de fruits et legumes and others and federation nationale des producteurs de raisins de table v Council of the EEC [1962] ECR 478. The application is also inadmissible because the applicants do not satisfy the conditions for the second possibility of bringing proceedings as the measure criticized is neither of ‘direct’ nor of ‘individual’ concern to them. It is not of ‘direct’ concern to them because, as appears from the Advocate-General's opinion preceding the judgment of 8 October 1974 in Case 18/74 (Syndicat general), the concept of direct interest can only cover the personal interests of the applicants and not those of applicants who make themselves the defenders of such rights. The measure criticized is not of individual' concern to them because it does not affect them ‘by reason of certain attributes which are peculiar to them, or by reason of circumstances in which they are differentiated from all other persons, and by virtue of these factors distinguishes them individually just as in the case of the person addressed’ (Judgment of 15 July 1963 in Case 25/62, Plaumann & Co. v Commission of the EEC [1963] ECR 107). The interpretation of these principles is so strict that an application by private parties in respect of a measure ‘of direct and individual concern’ to them has only been entertained by the Court on three occasions (Joined Cases 106 and 107/63, Alfred Toepfer and Getreide — Import Gesellschaft v Commission of the EEC [1965] ECR 405; Joined Cases 41 to 44/70, International Fruit Company and Others v Commission of the European Communities, Rec. 1971, p. 411. Case 62/70, Werner A. Bock v Commission of the European Communities, Rec. 1971, p. 897). The defendant also draws attention to the above-cited judgment of 14 December 1962 which stated that one cannot accept the principle that an association, in its capacity as the representative of a category of businessmen, could be individually concerned by a measure affecting the general interests of that category'.

2. In reply to the preliminary objection of inadmissibility, the applicants state first of all that their application is based, on the one hand, on Article 173 of the Treaty in so far as it concerns the annulment of the measure criticized and, on the other hand, on Articles 178 and 215 of the Treaty in so far as it concerns the recognition of the right to reparation and the determination of the principle that compensation must be granted.

A —. With regard to the preliminary objection of inadmissibility raised in the context of Article 173 of the Treaty, they maintain the following:

1. As to the nature of the measure criticized

The measure criticized can in no way have general application' within the meaning of the second paragraph of Article 189 of the Treaty. It is not a question of a regulation, but of a group of individual decisions of refusal to make reparation for the loss suffered by the officials and other servants of the European Communities as a result of the defectiveness of the specific index of one of the Member States, each of those decisions affecting the legal position of the said officials and servants.

The measure criticized has neither the form nor the characteristics of a regulation, even though it rejects a proposal by the Commission, as a measure of rejection does not necessarily have the form which would have been taken by the contrary measure. Moreover, what it rejects is the very principle of compensation.

Even if one disregards the form, it is still not a question of a regulation, that is to say, of a measure applicable ‘to categories of persons viewed abstractly and in their entirety’, as the persons to whom the measure was addressed are at least identifiable, since they are the officials and servants who have received insufficiently adjusted remuneration and pensions. The nature of the measure criticized is confirmed, moreover, by the fact that the Commission's proposal for compensation was accompanied by a schedule, setting out in detail the budgetary effect of its proposal and indicating the total number of those to be compensated.

To decide that the application is inadmissible by reason of the nature of the measure criticized — because it is in reality a regulation — would be to deny the officials and servants themselves the right to bring an appeal against that measure under Articles 90 and 91 of the Staff Regulations, since there also such an appeal presupposes, in order to be admissible, that the measure taken adversely affected the applicants. It is inconceivable that officials and servants cannot bring an action against a disputed measure which affects their legal position by refusing to indemnify them for the loss which they have suffered.

2. As to the interest of the applicants

Since the Court of Justice has laid down — as appears from its judgment of 8 October 1974 in Case 175/73 (Union syndicale) — the principle that the right of action is one of the means available for use by staff associations of officials and servants for the protection of the interests of their members as employees, it necessarily follows that the collective interest — without defining the scope of that concept — must be accepted as satisfying, in respect of a trade union, the condition of a direct and individual interest, since protection of the collective interest is precisely the reason for such an organization's existence. The Council's argument results, in fact, in denying trade unions the right of action in the collective interest, in disregard of the judgment of 8 October 1974.

There is in this case no doubt as to the existence of a collective interest with regard to the officials and servants who are members of the applicant organizations Even a restrictive interpretation of the concept of collective interest at least covers the case where, as in this instance, the measure criticized is one which is of direct and individual adverse effect to the interests as employees of all the members of the applicant associations.

With regard to the judgment of 14 December 1962 cited by the Council, the applicants make the observation that it is not a recent judgment and that it is for the Court, according to Mr Advocate-General Trabucchi (in his opinion preceding the judgment of 21 February 1974 in Joined Cases 15 to 33, 52, 53, 57 to 109, 116, 117, 123, 132 and 135 to 137/73 Roswitha Schots, nee Kortner, and others v Council and Commission of the European Communities and European Parliament [1974] ECR 198), to apply to the Community legal system, ‘by means of an act showing considerable awareness of the law as a living organism’, the changes in ideas and customs, particularly as seen through the law of the Member States. According to the applicants, the present application would be held to be admissible in every Member State.

Once it is accepted that the collective interest enables the applicants to bring an action, it follows that the measure criticized, when illegally having an adverse effect on those interests [sic], is of direct and individual concern to them. It adversely affects their very social purpose by damaging the objective which they seek.

In this connexion, the applicants refer to the theory of Professor J. Van Compernolle (Le droit d'action en justice des groupements, Brussels, Larcier, 1972, pp. 399-400) that a group may ‘plead as personal damage that suffered by the interest by which each and every member of the group is linked’. It has been seen that in such a case the group may, in my opinion, claim that the very value is adversely affected, the promotion and protection of which form the objective it is constituted to achieve. Because it is a legal person and only exists for the purposes of this objective, the group will feel such damage as personal damage.

‘This analysis leads me to draw no distinction, on the conceptual level, between the concept of the collective interest understood as damage suffered by the members of the group as a whole and that of the collective interest understood as arising from the adverse effect on the group's objective.’

‘In both cases, the personal damage suffered by the group is felt by it as arising from injury to the value it has undertaken to promote and protect.’

The applicants conclude by maintaining that the measure criticized, by adversely affecting the staff interests which it is their task to protect, affects them by reason, of certain attributes which are peculiar to them and distinguishes them individually just as in the case of the person addressed.

B —. With regard to the admissibility of the application within the context of Articles 178 and 215 of the Treaty, this, according to the applicants, is in no way disputed by the Council. This application is antonomous.

2. During the oral procedures on 18 February 1975, the parties developed the arguments put forward during the written procedure. In addition, the applicants maintained that, even if the action brought in the collective interest were not to be held admissible, in the context of the application for annulment provided for by the second paragraph of Article 173, their application is nevertheless admissible as it is based on a relevant interest of their own. This application for annulment is based on the Council's disregard, by the decision in dispute, of its previous decisions of 21 march 1972 on a system for adjusting remuneration and of 19 December 1972 confirming the principle of an increase in the remuneration of European officials parallel to that appearing on average in the salaries of national officials. The trade unions collaborated in the drawing up of those decisions and are therefore parties to the decisions which have been disregarded by the measure criticized; they therefore have a personal interest in the present dispute.

3. The Advocate-General delivered his opinion on 6 March 1975.

Law

1. The application made on 20 September 1974 seeks, first, the annulment of the decision of the Council of 22 and 23 July 1974‘in so far as it rejects any proposal for the compensation of European officials as a result of the defectiveness of the specific index for one Member State’ and, secondly, a ruling by the Court ‘that reparation should be made for the loss suffered by the European officials by reason of the errors vitiating the decisions of the defendant prior to Regulation No 2/74 and relating to the adjustment of salaries in terms of the increase in purchasing power’.

2. The applicants subsequently stated that the application was based on Article 173 of the EEC Treaty in respect of the first head of claim and on Articles 178 and 215 in respect of the second.

3. As the defendant Council has raised a preliminary objection of inadmissibility, it is appropriate, in application of Article 91 of the Rules of Procedure, to rule on this point before hearing the main case.

4. According to the defendant, the application is inadmissible both by reason of the nature of the measure criticized and by reason of the fact that that measure is not of direct and individual concern to the applicants.

5. On 20 and 21 March 1972, the Council, with a view to ensuring an increase in real terms of the purchasing power of Community salaries on the annual application of Article 65 of the Staff Regulations of Officials, undertook for a trial period of three years to fix the level of such increase within a bracket formed by two indices of the growth of the purchasing power of remuneration in the public service in the Member States.

6. On the basis of the indices relating to the period from 1 July 1971 to 30 June 1972, the Council decided to fix the increase to be applied for the salary year beginning 1 July 1972 at 3.65 % and consequently adopted a new table of monthly salaries with effect from 1 July 1972 by Regulation No 2188/73 of 9 August 1973 (OJ L 223 of 11. 8.1973).

7. Further, on 18 December 1973, on the basis of the indices relating to the period from 1 July 1972 to 30 June 1973, it decided to fix the increase to be applied for the salary year beginning 1 July 1973 at 3.3 % and consequently adopted a new table of salaries by Regulation No 2/74 of 28 December 1973 (OJ L 2 of 3.1.1974).

8. However, both the Commission and various trade unions representing the staff, grouped in a Liaison Committee of the Trade Unions of European Officials, considered that one of the indices used produced errors adversely affecting the staff and called upon the Council to correct them.

9. To this end, on 14 February 1974 the Commission submitted to the Council a proposal for a regulation comprising, for the period from 1 July 1972 to 30 June 1973, a table of monthly salaries amending that appearing in Regulation No 2188/73 of the Council of 9 August 1973.

10. After various discussions with the Commission and the trade unions representing the staff, the Council considered that the index criticized did not show the alleged defects and decided by the resolution in dispute to hold to ‘its decision of 18 December 1973’.

11. The Commission and the applicants in turn made applications against that decision.

A — The admissibility of the application in so far as it is based on Article 173 of the Treaty

12. Under the terms of the second paragraph of Article 173 of the Treaty, any natural or legal person may institute proceedings against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern to the former.

13. It must therefore be examined whether the measure criticized, whatever its nature, is of direct and individual concern to the applicants.

14. The applicants maintain that such is the case because the measure criticized concerns the collective interests of the officials and servants of the Communities, and the protection of those interests, for which they were formed, is the reason for their existence and for their legal capacity.

15. During the oral procedures they maintained, in addition, that the measure in dispute is in any event of individual concern to them because they are parties to the decision of 20 and 21 March 1972 which is the result of negotiations between the Council, the Commission and the trade unions.

16. In the system of forms of action laid down by the Treaty natural or legal persons to whom Article 173 refers and to whom the disputed measure is not addressed may only claim that that measure is of individual concern to them if it affects them by reason of certain attributes which are peculiar to them, or by reason of circumstances in which they are differentiated from all other persons, and by virtue of these factors distinguishes them individually just as in the case of the person addressed.

17. In this context, an organization formed for the protection of the collective interests of a category of persons cannot be considered as being directly and individually concerned by a measure affecting the general interests of that category.

18. Moreover the second paragraph of Article 37 of the Statute of the Court of Justice of the EEC, by granting the right to intervene to any person establishing an interest in the result of any case submitted to the Court, enables trade unions representing staff to put their case to the Court, in particular in the context of the proceedings referred to in Article 179 of the Treaty and defined by Articles 90 and 91 of the Staff Regulations of Officials.

19. Furthermore, the mere fact that those organizations took part in the discussions which preceded the disputed measure is not sufficient to change the nature of the right of action which, in the context of Article 173, they may possess in relation to that measure.

B — The admissibility of the application in so far as it is based on Articles 178 and 215 of the Treaty

20. In so far as it is restricted to asking the Court to ‘rule’ that officials and servants are entitled to reparation for the loss suffered by them by reason of the ‘errors vitiating the previous decisions of the Council’, the application is concerned with one of the consequences which the Council would have to draw from a judgment of annulment and is therefore indistinguishable from the application for annulment.

21. Further, in so far as it seeks compensation by way of reparation for the loss suffered by officials and servants, it is concerned with the personal proprietary interests of those officials and servants and not with a collective right to reparation, which moreover the applicants do not claim to possess.

22. The application must therefore be dismissed as inadmissible.

Costs

23. Under Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs. The applicants have failed in their submissions.

On those grounds, THE COURT hereby:

1 Dismisses the application as inadmissible;

2 Orders the applicants to pay the costs.