JUDGMENT OF 15. 6. 1976 — CASE 110/75 MILLS v INVESTMENT BANK

In Case 110/75

THE COURT composed of: R. Lecourt, President, H. Kutscher and A. O'Keeffe, Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, P. Pescatore, M. Sørensen, Lord Mackenzie Stuart and F. Capotorti, Judges, Advocate-General: J. P. Warner Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

The facts and the arguments set out by the parties in the course of the written procedure may be summarized as follows:

I — Facts and procedure

In accordance with a letter of 30 May 1973 the applicant, a British subject, was engaged by the European Investment Bank from 1 July 1973 as a translator with the English translation section for a probationary period of six months. The letter stated that on the expiry of this period the appointment would be renewed for an indefinite period.

When the probationary period expired on 31 December 1973 the applicant was appointed from 1 January 1974 for an indefinite period.

By a letter of 29 July 1975 the Bank informed the applicant that for reasons pertaining to its internal organization his contract of employment would be terminated in accordance with Articles 16 and 17 of the Staff Regulations of the Bank on 31 October 1975. For the period from 1 August to 31 October 1975 he was to receive under Article 16 of the Staff Regulations of the Bank a compensatory payment of an amount equal to that of his remuneration in the course of that period together with the severance grant provided for in Article 34. It was added that the applicant would be entitled to a resettlement allowance if he changed his residence, to the costs of removal to one of the countries of the common market and to travel expenses. In addition the Bank declared that it was prepared, if it received before 15 August 1975 the signed copy of its letter, to make a monthly payment to the applicant of a sum equal to his remuneration until he took up employment with a new employer, but not beyond 31 January 1976 at the latest.

Since the applicant considered that the decision to dismiss him was in the nature of a penalty imposed on personal grounds he made an application under Article 41 of the Staff Regulations of the Bank for the dispute to be brought before the Bank's Conciliation Board. This board began its work on 16 September 1975 but was unable to reach a settlement acceptable to both sides and on 30 September 1975 recorded that its task was at an end.

The applicant then decided to bring the dispute before the Court of Justice of the European Communities.

The application was lodged at the Court Registry on 17 October 1975.

By an order of the First Chamber of the Court of 19 February 1976, the case was remitted to the full Court.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate-General, the Court decided to open the oral procedure without a preparatory inquiry.

The parties were requested to restrict their submissions to:

1) The jurisdiction of the Court in the present case;

2) The admissibility of the claim that the measure should be annulled.

II — Conclusions of the parties

The applicant claims that the Court should:

annul the decision of 29 July 1975 whereby his employment was terminated as from 31 October and rule that he be reinstated; Alternatively order the defendant to pay him in addition to the compensatory payments provided for in Article 16 of the Staff Regulations of the Bank, compensation for wrongful termination of his contract of employment amounting to BF 2581020 for material damage and BF 500000 for non-material damage with interest fixed by the Court; (Reply: compensation amounting to BF 3500000)

order the defendant to bear the costs;

as a further alternative, before giving a ruling, order the measures of inquiry requested by the applicant in the reply;

in that case reserve the costs.

The defendant contends that the Court should:

declare that it has jurisdiction;

take formal note that the defendant does not intend to impugn the admissibility of the application as to form;

rule that the main conclusions of the application are inadmissible as to substance or alternatively that they are unfounded;

further rule that the alternative conclusions of the application are unfounded;

take formal note that so far as necessary the defendant disputes the amounts claimed;

dismiss the application;

make an order as to costs in accordance with the relevant provisions.

In the rejoinder it contends that the Court should:

Reject the submissions and explanations contained in the reply;

more particularly dismiss the various requests for the production of documents;

Dismiss the claim that Mr Bearne and Mr Butler be heard as witnesses;

Rule that the conclusions as set out in the reply are inadmissible or otherwise unfounded;

Grant the defendant the benefit of the conclusions set out in its defence.

III — Submissions and argu ments of the parties

A — Jurisdiction of the Court of Justice

The applicant refers to the first paragraph of Article 41 of the Staff Regulations of the European Investment Bank which provides ‘Disputes, of any nature, between the Bank and individual members of staff, shall be brought before the Court of Justice of the European Communities’.

The defendant points out that the authors of the Staff Regulations of the Bank intended to exclude from the jurisdiction of national courts any disputes which might arise between the Bank and its staff.

The Staff Regulations of the Bank, it is stated, established an independent system separated from the national framework of the Member States, in accordance furthermore with Article 15 of the Protocol on the Privileges and Immunities of the European Communities which also applies to the staff of the Bank (Article 22 of the Protocol).

The Staff Regulations of the Bank were adopted in accordance with Article 29 of the Rules of Procedure of the Bank and Article 9 (3) (h) of the Protocol on the Statute of the European Investment Bank the latter of which forms an integral part of the EEC Treaty (EEC Treaty, Article 239).

It is in accordance with what was intended in the Statute and is also logical that Article 41 of the Staff Regulations of the Bank provides that disputes between the Bank and members of its staff should be brought before the Court of Justice as by their nature they come within the Community sphere.

Since the Bank is not one of the institutions listed in Article 4 of the EEC Treaty, Article 179 of the Treaty conferring jurisdiction on the Court in disputes between the Community and its servants is not literally applicable to it. Nevertheless, since the Bank and its servants have the same interest as the Community in protection by the courts, this lacuna may be filled by a wide interpretation of Article 179 or by its application by analogy. Article 180 of the EEC Treaty governing the jurisdiction of the Court in certain matters relating to the Bank does not militate against such an interpretation since the list cannot be considered as exhaustive.

According to the defendant the jurisdiction of the Court is furthermore based on Article 12 (a) of the Protocol on the Privileges and Immunities of the European Communities in accordance with which officials of the Community are immune from legal proceedings in respect of acts performed by them in their official capacity subject to the application of the provisions on the jurisdiction of the Court of Justice referred to above. This reservation can only be given full effect if the jurisdiction of the Court is also recognized with regard to the officials of the Bank.

Finally the jurisdiction of the Court could be based on the second sentence of the second paragraph of Article 29 of the Statute of the Bank, that is to say on the existence of a contract between the Bank and its servants. When they sign the Staff Regulations of the Bank on their appointment, employees acknowledge the contractual status of the provisions of the regulations and thereby acknowledge the one regarding the jurisdiction of the Court.

B — Admissibility

In its defence the defendant disputes the admissibility of the substance of the main conclusions of the application.

It recalls that its staff is engaged under contract of which the Staff Regulations of the Bank constitute an integral part. The Bank intentionally opted for contracts and more specifically for contracts of employment under private law (see Annex 4 to the defence).

Any disputes which might arise would occur and must be considered in the context of private law, in particular with regard to the appraisal of the conditions of dismissal. This is how the reference in Article 44 of the Staff Regulations of the Bank to the general principles common to the laws of the Member States should be understood. Contracts concluded for an indefinite period may be terminated by either party on condition that the agreed period of notice is observed. Either party may thus exercise his contractual right to terminate the contract since the other party is obliged to recognize this. Any dispute can only relate to the lawfulness of the termination of the contract so that any claims the parties may have are satisfied by compensation. Consequently a party cannot be heard to request a court to annul the measure terminating the contract and a fortiori an applicant cannot be heard to request a court to reinstate him in a post which he no longer holds.

In the reply the applicant disputes this argument. He considers that the nature of the legal relationship between the Bank and its staff is essentially a ‘statutory’ one. The contract, if such there be, can only be a contract under public law and when the Court effects a review under its unlimited jurisdiction it is competent to appraise the legality of the decision in dispute and where appropriate to annul it. The reinstatement of the applicant in his post is justified both as the logical and natural result of the annulment of the decision and as the normal method of compensating the injury occasioned to the applicant. Even if the legal relationship between the Bank and its staff is one of private law the Court of Justice can by applying the ‘general principles’ concerning private master and servant relationship at least suggest the reinstatement of the applicant even if it is unable to require it.

In the rejoinder the defendant sustains its argument and adds that even if the applicant's argument as to the ‘statutory’ nature of the appointment is conceded the claim for annulment and reinstatement are equally inadmissible. In fact in that case the ‘statutory’ appointment could, in accordance with the provisions governing it, be terminated by either party on due notice being given. This would therefore be a ‘statutory’ relationship which was essentially temporary and not permanent. The Court cannot annul a decision to terminate that relationship in accordance with the relevant provisions and consequently it cannot order the reinstatement of the applicant. However in both cases the alternative conclusions are admissible.

C — The substance of the case

Facts

The applicant states that he entered the service of the Bank during sabbatical leave granted by the Polytechnic of the South Bank, London, where in 1970 he received the permanent appointment of Senior Lecture in modern languages. On the faith of assurances given by the Bank as to the permanence of the post, in particular should the United Kingdom withdraw, on 26 June 1975 he resigned from his post in London to take up a career as a member of the Bank staff.

He states that he is third in order of seniority amongst the five officials in the English translation section and is older than those of his colleagues with less seniority.

The applicant puts forward the following points with regard to the events preceding his dismissal:

1) On 17 January 1975 the applicant was informed by Mr Thiebaut of an unfavourable appraisal of his work which the applicant considered biased. This fact was reported to higher authority which took no action.

2) On 18 February and 17 April the applicant was unjustly accused of passing off as his own a translation which had in fact been done by a colleague. This accusation, which was quite unfounded, was notified to higher authority which, again, improperly failed to act;

3) When a document urgently required to be translated during the weekend of 5 and 6 April 1975 Mr Thiebaut deliberately withheld it from the applicant on the ground that his collaboration would have been ‘extremely unhelpful’.

At the time when the letter of dismissal was delivered the Secretary-General himself indicated orally as the justification for the measure adopted the poor service relationships and the conduct and behaviour of the applicant; in the course of a meeting he declared that the Bank had decided to dismiss the applicant ‘on grounds relating to work and to discipline’.

Law

First submission

The applicant considers that there has been an infringement of Articles 38 to 40 of the Staff Regulations of the Bank, of the general principles common to the laws of the Member States, to which Article 44 of the said regulations refers, and in particular of the principle that the rights of the defence must be respected and of the right of employees to protection against threats proceeding from superior officers, as well as a misuse of procedure and of powers.

He states that the contested decision gives as its ostensible reason the need for an internal reorganization and was adopted under Articles 16 and 17 of the Staff Regulations of the Bank without its being considered necessary by the Bank to take all the appropriate measures for considering whether the unfavourable appraisals and the accusations made with regard to the applicant were well founded and without hearing what he had to say in his defence.

Having regard to the circumstances immediately preceding it, this decision, he states, really cloaks a disciplinary measure and therefore should have been adopted after an inquiry into the facts alleged against the employee, and a hearing in accordance with the rules laid down in Articles 38 to 40 of the Staff Regulations of the Bank.

Second submission

The applicant states that there has been an infringement of Article 44 of the Staff Regulations of the Bank inasmuch as that article refers to the general principles common to the laws of the Member States, in particular with regard to dismissal, and also because of the lack or inaccuracy of the statement of reasons and because the action taken is ultra vires. The decision is purportedly justified by the need for internal reorganization and in fact it consists of the dismissal of a single employee with family responsibilities and with more seniority than others of his colleagues carrying out the same duties.

He claims that it is generally recognized in the social law of the Member States that the right of dismissal is subject to restrictions relating to both the economic and social aspects of the measure. In the present case it cannot be maintained that the dismissal of a single employee constitutes a measure of internal reorganization and there is no social or economic consideration justifying the dismissal of an employee to whom assurances had been given with regard to the permanency of his post and whose seniority and family responsibilities are greater than those of other employees performing the same duties.

Defence

Facts

The defendant submits the following observations with regard to the points of fact relied upon:

1) The problem reported by the applicant received the attention of the Secretary-General. The unfavourable appraisal of the applicant's work was submitted to the second reviser, Mr Davison, who concurred with it It was the subject of discussions between the Secretary-General, the Head of the Personnel Branch and Mr Thiebaut The outcome was a slightly more favourable appraisal.

2) The translation in question was further examined by a reviser-translator of the Bank who was not involved in the matter. He concluded in his report that there was insufficient evidence to maintain that the applicant had not done the translation himself. The defendant took no formal note of the accusation in question and took no action as a result of it.

3) If the third allegation is correct the incident relating to the weekend in question merely confirms the unfavourable appraisal previously issued.

The defendant states that the applicant's behaviour at work caused difficulties. His attitude to Mr Thiebaut was intolerable and the atmosphere had become so tense that some employees intended to leave the service.

Following the accession of the new Member States to the EEC the creation of a team consisting of five English translators was justified but especially from 1975 the volume of work of this section of the service diminished considerably in comparison with that of other translation sections: in the first six months of 1975 the English translation section produced 21 % fewer pages than the German translation section with the same number of translators. The output per person per day fell from 2-56 pages during the last nine months of 1973 to a mere 1-52 pages during the first ten month of 1975, that is a drop of 41 %.

Since one post in this section was superfluous the Bank decided to dispense with the services of the applicant on two grounds: on the one hand in accordance with the appraisals of his work he was regarded as the weakest member of the section and on the other his conduct at work, particularly after the beginning of 1975, was liable to create such frictions that the proper functioning of the service might have been jeopardized. This is accordingly how the declaration of the Secretary-General mentioned in the application must be understood.

With regard to the alleged assurances given as to the permanency of the post and the applicant's resignation from the Polytechnic the defendant states that no special assurance was given to the applicant either before or at the time of his entry into the service. Such a guarantee would indeed have been contrary to the Staff Regulations of the Bank.

It is true that since the Management Committee understood the anxiety of applicants for posts and of members of staff of British nationality arising from uncertainty relating to the Referendum it decided that such persons might follow a normal career at the Bank if the United Kingdom withdrew from the EEC and from the Bank. (Decision recorded in minutes CD 40 — PE 9/1975 of 19 March 1975). This decision was communicated to the British subjects and in no way referred to the applicant in particular.

Appointment at the European Investment Bank

An appointment at the European Investment Bank is made by letters expressly stating that the Staff Regulations of the Bank constitute an integral part of the contract of employment. Before entering the service candidates are requested, at the same time as they sign the copy of their letter of appointment, to acquaint themselves with the Staff Regulations and sign a copy of them also, appending above their signature the holograph declaration: ‘Read and approved’.

In accordance with the first paragraph of Article 16 of the Staff Regulations of the Bank contracts are to be concluded for a definite or an indefinite period. According to the third paragraph of that article: ‘Contracts for an indefinite period may be terminated by due notice given by one party to the other’.

In terms of Article 17 due notice by the Bank is three months for each completed period of five years' service and any fraction of such period.

The Bank states that those provisions were complied with in the contested letter of dismissal and furthermore this fact has not been disputed by the applicant.

Law

The defendant maintains that its actions have been entirely lawful and that its decision cannot be criticized.

First submission

The defendant disputes that the dismissal of the applicant constitutes a disciplinary measure. It availed itself of its contractual right to terminate the contract and Article 38 et seq. of the Staff Regulations was thus inapplicable.

In the present case the Bank solved the abovementioned problem of internal organization on the basis of the information in its possession and to the best of its judgment. The appraisals made in this connexion must be regarded as final and are not subject to review by the Court.

The complaint of misuse of procedure and of powers must be rejected as completely lacking in justification and in evidence since the reasons relied upon in the contested letter constitute the real ground of dismissal.

With regard to observing the rights of the defence the defendant refers to its statement above on the points of fact.

Finally the defendant denies that the applicant was in any way threatened by his superiors.

Second submission

The reference by Article 44 of the Staff Regulations to the general principles common to the laws of the Member States emphasizes, according to the defendant, that the contracts of employment concluded by the Bank come under private law.

The applicant's argument is based in part on concepts borrowed from administrative law which is irrelevant to this case.

With regard to the ‘restrictions relating to both the economic and the social aspects’ the defendant considers it difficult to subscribe to the existence of such a principle. In the legal systems of Member States which recognize improper dismissal on the grounds that it is unlawful or economically or socially indefensible the improper dismissal nevertheless stands and can only give rise to compensation.

Even on the supposition that the applicant may properly rely on concepts of administrative law the defendant disputes that any of its actions may be considered to have been ultra vires.

With regard to the complaint concerning the lack or inaccuracy of a statement of reasons the defendant maintains that in this respect the contested decision entirely fulfils any possible obligation since it expressly gives the ground for the dismissal.

The argument of the applicant that the dismissal of a single employee does not constitute a measure of internal reorganization is unfounded in fact: the ground relied upon was the internal organization of a section containing too many employees.

With regard to the social aspect the defendant states that no national legal system compels employers to give priority in cases of dismissal to social considerations rather than to those pertaining to the ability, efficiency and conduct of the person concerned in the service. Whilst the defendant recognizes a moral obligation to take into consideration the personal situation of employees it denies that it has failed in this duty in the case of the applicant.

Reply

The applicant requests the Court of Justice to order the production of all reports relating to the manner in which he carried out his duties from the beginning of his probationary period until his dismissal. Furthermore he requests that there be communicated the reports drawn up with regard to the other members of the English translation section together with any other documents which were used in drawing up the comparison of the qualifications, services and merits which, in the defendant's view, justified the dismissal. In addition the applicant requests the Court to order the production of the questionnaires relating to the definition of duties completed by the members of the section, the report drawn up on the basis of those questionnaires' by the Head of the Organization and Methods Section together with all documents constituting the decision taken regarding this report by the responsible officers of the Bank.

The applicant maintains that it does not follow from any document that Mr Thiebaut and Mr Davison were the immediate superiors of the other members of the section or that they were capable of appraising the work of the latter. If such documents exist it is for the defendant to produce them and to prove that they were brought to the notice of the ‘lower ranks’.

The legal relationship between the Bank and its staff

In its reference to the provisions of the EEC Treaty (Articles 129, 130, 180 and 239) and to the Protocol on the Privileges and Immunities of the European Communities (Article 22) the applicant claims that the Bank indisputably has legal personality in public international law. According to Article 29 of the Rules of Procedure of the Bank the staff come under a ‘statutory’ system, the provisions of which are adopted and amended by the unilateral decision of the Board of Directors. The legal relationship between the Bank and its staff is of an essentially ‘statutory’ nature since all the factors which determine this relationship may be amended at any time in the interests of the service. Accordingly the reference to the concept of an individual contract is inadequate if not altogether superfluous. In any case if there is a contract it can only be under public law.

The substance of the legal relationship between the Bank and the members of its staff is related to the substance accorded to such relationships in the public service, both national and international.

In the present case the relevant provisions of the Staff Regulations of the Bank must be supplemented by the general principles common to the laws of the Member States with regard to the public service, in particular by the following principles:

the duty of the authority to provide an accurate statement of reasons for decisions adversely affecting employees;

respect for the rights of the defence including in particular the right of an official to a full inquiry into his case and for the right of both sides to present full arguments in the proceedings;

the right of an employee to protection against threats from third parties including threats made by his superiors;

the rules of good administration and fair procedure.

With regard to the defendant's statement as to the facts

The applicant disputes the accusations relating to his conduct in the service. In this connexion he requests the Court to hear the evidence of Mr Bearne and Mr Butler, members of the staff. The applicant does not dispute that the volume of work may have diminished as a result of various circumstances but he remarks that in the past the Bank has never used dismissal for the purpose of the internal reorganization of the service. Furthermore the measure taken concerning him constitutes a direct contradiction of the assurances given by the Management Committee to the British members of the staff.

With regard to the violation of the principles and rules relied upon

Even if the measure complained of were justified for reasons relating to internal organization, which the defendant has failed to establish, the decision to dismiss the applicant was taken because unfavourable appraisals were made of his mode of work and of his conduct. Since this measure is thus a disciplinary one it adversely affected the applicant and the defendant was obliged to respect his rights of defence. Nevertheless the contested decision was adopted in reliance solely on judgments made on the applicant by two colleagues. By doing this the defendant has failed to observe the right of the applicant to have a full inquiry into his case and has infringed the right of the latter to be heard in the proceedings.

Since the applicant was never acquainted with the report in question he did not have an opportunity of furnishing appropriate explanations.

Likewise the authority neither exhausted all the means of inquiry nor for example did it question all members of the relevant section or arrange for the parties concerned to meet face to face.

The defendant has also failed to observe the right of the applicant to be protected against threats from third parties including his colleagues. When the applicant was accused of passing off as his own the translation of another person the higher authority had a duty to take all the necessary steps to check whether this accusation was well founded and, if it were not, to clear his name. On the contrary the defendant allowed a doubt to subsist which necessarily weighed against the applicant when it was necessary — as the defendant claims — to dismiss a member of the staff for reasons relating to the reorganization of the service.

Rejoinder

Regarding the legal relationship between the Bank and its staff

The defendant considers that the arguments of the applicant regarding the legal relationship between the Bank and its servants are irrelevant: whether that relationship is a ‘statutory’ or a contractual one and in the latter case whether the contract is one under public law or under private law, the fact remains that the appointment of the applicant was for an indefinite period and could be terminated.

The argument expounded in the reply should be rejected on the following grounds:

The fact that the Bank is a person under public law within the context of the Community in no way implies that all contracts to which it is a party are contracts under public law (vide the examples on pages 4 and 5).

With particular regard to the staff of the Bank the defendant refers to the note of 15 March 1960 (Annex 4 to the defence) in which the Management Committee explained why it proposed a contractual system for its servants and employees as a whole. In accordance with these ideas the Staff Regulations of the Bank provide for appointments by contracts under private law (Articles 13, 15 and 16).

The applicant is wrong in inferring from Article 29 of the Rules of Procedure of the Bank that the staff of the Bank is governed by a ‘statutory’ system. If the Board of Directors amends the Staff Regulations of the Bank such amendment cannot apply to the individual contracts currently in force unless it is accepted by the other party since the Staff Regulations form an integral part of the the individual contracts.

In any case the legal relationship between the Bank and its staff is purely a contractual one and in this respect it is irrelevant that the employer is a person under public law whose tasks and activities are determined by Community law. In the legal systems of the Member States it is also accepted that officials or servants of public authorities do not necessarily come under a ‘statutory’ system (examples page 11).

As regards the principles applicable in the present case

Since the relevant contracts are under private law the two parties enjoy the contractual right of terminating the appointment by due notice given. The sole point open to discussion is whether the exercise of the right can be influenced by the effect of the general principles common to the laws of the Member States (Article 44). Indeed the wording of Article 44, which again employs the words ‘individual contract’, makes it clear that the principles referred to there are the principles of the law relating to master and servant, that is to say the principles governing similar legal measures in the national legal systems. The note of 15 March 1960 previously referred to confirms this conclusion.

Examination of this subject makes it clear that most of the legal systems of the Member States appear to concede that employers may not carry out improper dismissals. According to Luxembourg law dismissal is improper if ‘it is carried out for unlawful reasons or if it constitutes a measure which is economically or socially irregular’. Whether a dismissal is lawful or improper is decided with reference to the reasons which gave rise to it. The courts appraise the lawfulness of the dismissal solely from the point of view of compensating the employee.

Of the principles upon which the applicant relies the only one which can be found in private law is the duty to state the reasons for the decision of dismissal at the request of the employee. This duty was fulfilled in the present case.

Furthermore the defendant maintains its arguments set out in the defence in particular its explanation of the reasons for the dismissal in dispute.

With regard to the request for the production of the reports relating to the applicant the defendant refers to the personal file lodged at the Court of Justice. It emphasizes that the procedure selected by the Bank with regard to staff reports does not include communicating those reports to the members of staff concerned for their counter-signature.

It is impossible to accede to the request for the production of reports drawn up on the other members of the section. Such reports cannot be produced in a dispute which does not relate to those persons. Furthermore reports which have neither been submitted nor communicated to the persons concerned themselves cannot be communicated to third parties.

The defendant has no objections to transmitting to the Court the questionnaire completed by the applicant but those of the other members of the section should remain strictly confidential. Furthermore the report drawn up on the basis of those questionnaires had no effect on the disputed decision of dismissal.

With regard to the authority of Mr Thiebaut and Mr Davison the defendant states that at the Bank the internal organization of its branches is not governed by regulations or other provisions but this organization does exist and is indispensable. Mr Thiebaut is responsible to the Bank for the branch of which he is head.

The request to take the evidence of witnesses must be rejected since such problems and questions are not a fit subject for inquiry. Furthermore it would scarcely be advisable to conduct an inquiry in which members of the same service were encouraged to denigrate one another and perhaps to side with or against a former colleague or a superior.

Furthermore the defendant disputes the accuracy of the facts relied upon in the reply (page 17 paragraph 2) as well as the relevance in law of the line of argument.

Alternatively, if the principles relied upon by the applicant are applicable to the present case, the defendant points out that all duties have been fulfilled and that the rights of the defence have been respected. There never were any threats from third parties and in any event the defendant did not accept any complaints made against the applicant without carefully checking them.

As a further alternative point if the Court of Justice declares that the dismissal of the applicant was improper or unlawful the defendant considers the main conclusions as inadmissible (see under ‘Admissibility’) or as unfounded.

With regard to the alternative conclusions the defendant disputes the sum claimed as unfounded and in any case excessive.

IV — Oral procedure

The parties presented oral argument on 1 April 1976.

The Advocate-General delivered his opinion at the hearing on 6 May 1976.

Law

1. By an application of 17 October 1975 the applicant requested first the annulment of the measure contained in a letter dated 29 July 1975 and received on 30 July 1975 from the European Investment Bank terminating his employment as a translator as from 31 October and secondly his reinstatement in his post.

2. As an alternative he requests that the defendant be ordered to pay in addition to the compensatory payments for which provision is made by Article 16 of the Staff Regulations of the Bank compensation amounting to BF 3081020 for wrongful termination of his contract.

3. In view of the initial questions with regard to the jurisdiction of the Court and the admissibility of the main claim the First Chamber of the Court, being the appropriate Chamber to hear the application, by an order of 19 February 1976 referred the matter to the Full Court.

4. It is thus necessary first to consider the jurisdiction of the Court and then the admissibility of the application for annulment.

The jurisdiction of the Court

5. According to Article 179 of the Treaty establishing the European Economic Community: ‘The Court of Justice shall have jurisdiction in any dispute between the Community and its servants within the limits and under the conditions laid down in the Staff Regulations or the Conditions of Employment’.

6. It is accordingly necessary to ascertain whether the defendant must for the purposes of this article be considered as forming part of the Community.

7. Title IV of Part Three of the Treaty on the policy of the Community is devoted to the European Investment Bank.

8. Article 129 thereof provides: ‘A European Investment Bank is hereby established; it shall have legal personality’.

9. The Statute of the Bank forms the subject-matter of a Protocol annexed to the Treaty.

10. According to Article 13 (7) of that Statute: ‘The officials and other employees of the Bank shall be under the authority of the President. They shall be engaged and discharged by him’.

11. Article 21 of the Protocol on the Privileges and Immunities of the European Economic Community provided that it should also apply to the Bank, to the members of its organs and to its staff.

12. That Protocol was replaced by the Protocol on the Privileges and Immunities of the European Communities of which Article 22 is identical to the provision cited.

13. The staff of the Bank are thereby placed in a special legal situation identical to that of the staff of the institutions of the Community.

14. It must thus be concluded that by the words ‘any dispute between the Community and its servants’ Article 179 is not restricted exclusively to the institutions of the Community and their staff but also includes the Bank as a Community institution established and with a legal personality conferred by the Treaty.

15. This conclusion is not invalidated by the fact that Article 180 of the Treaty contains a special provision relating to certain disputes of the Bank.

16. This provision merely confers upon the Board of Directors of the Bank powers analogous to those conferred upon the Commission by Article 169 and renders measures adopted by the Board of Governors and those adopted by the Board of Directors subject to the same jurisdiction of the Court of Justice as that conferred by Article 173 with regard to the measures of the Council and of the Commission.

17. This complementary nature of Article 180 thus confirms the conclusion that when in Article 179 mention is made of the Community this does not exclude the Bank.

18. Under this article the Court thus has jurisdiction in any dispute between the Bank and its servants.

The admissibility of the conclusions

19. Article 13 of the Staff Regulations of the Bank provides: ‘Relations between the Bank and the members of its staff shall, in principle, be governed by individual contracts in conjunction with these Staff Regulations. The Staff Regulations shall be an integral part of these contracts.’

20. Article 15 provides: ‘Individual contracts between the Bank and the members of its staff shall take the form of letters of appointment. Staff engaged by the Bank shall countersign the letter of appointment and a copy of these Staff Regulations.’ ‘The letter of appointment shall specify remuneration, length of contract and other terms of employment.’

21. The provisions of Article 16 which are relevant to the present case provide: ‘Contracts for an indefinite period may be terminated by due notice given by one party to the other’, the conditions and length of the the period of notice being laid down generally in the succeeding articles of the regulations.

22. The system adopted for the relations between the Bank and its employees is thus contractual and is accordingly founded on the principle that individual contracts concluded between the Bank and each of its employees constitute the outcome of an agreement resting on mutual consent.

23. It follows from this that the contract may be repudiated and terminated by either of the parties on the conditions laid down both in the regulations and in the contract itself.

24. If the contract is terminated contrary to the provisions of the individual contract or of the regulations which are deemed to be an integral part thereof the party having illegally terminated the contract must accordingly be ordered to compensate the other party for the material and non-material damage occasioned to the latter by such illegality.

25. Nevertheless although the continuation of the contract depends above all on the mutual consent of the parties which constitutes the basic condition for the existence of the contract, this does not prevent both the provisions of the contract and the general principles of the law of master and servant, to which the last article of the Staff Regulations of the Bank refers, from imposing limits to this intention of the parties.

26. A termination of a contract which exceeds those limits may be void and it will be for the court having jurisdiction, in this case the Court of Justice, to make a declaration to that effect.

27. In particular, termination of a contract taking the form of ‘summary dismissal for grave misconduct’, the penalty prescribed by Article 38 of the Staff Regulations of the Bank, might be declared void if the Court found that such misconduct had not occurred.

28. It will be a matter for the Chamber having jurisdiction to verify whether, as the applicant has alleged, termination of his contract constitutes a disguised disciplinary measure contrary to the provisions of the Staff Regulations.

29. In those circumstances the application for the annulment of the termination of the contract, understood as an application for a declaration of nullity, cannot therefore be declared inadmissible.

Substance of the case

30. The First Chamber referred the matter to the Full Court in order that the two questions considered above might be decided.

31. Since the Court has settled those questions the case must thus be remitted to the First Chamber in order that it may consider the substance of the case and arrive at a decision thereon.

Costs

32. The costs must be reserved.

On those grounds, THE COURT, before a decision is arrived at on the substance of the application, hereby declares:

1 The Court has jurisdiction in any dispute between the European Investment Bank and its employees;

2 The objection of inadmissibility is dismissed;

3 The case is remitted to the First Chamber;

4 The costs are reserved.