C-35/81

JUDGMENT OF 3. 12. 1981 — CASE 35/81 ETIENNE v COMMISSION

CELEX: 61981CJ0035
Datum: 1981-12-03
Källa: eur-lex.europa.eu

THE COURT (First Chamber) composed of: G. Bosco, President of Chamber, A. O'Keeffe and T. Koopmans, Judges, Advocate General: F. Capotorti Registrar: H. A. Rühl, Principal Administrator

gives the following

JUDGMENT

Facts and Issues

The facts of the case and the submissions and arguments put forward by the parties during the written procedure may be summarized as follows:

I — Facts and written procedure

On 14 October 1958, the Commission of the European Communities appointed Henri Etienne “to perform, in the Directorate-General for the Internal Market, the duties of a member of the Industrial Affairs Division.” However, it is apparent from the notice of 19 November 1958 concerning the taking up of his duties, transmitted by the Personnel Department to the Remuneration and Allowances Department and other departments that the applicant took up his duties on 26 October 1958 as a “Grade A official (member of division) in DG III.”

By letter of 3 December 1958, the applicant was informed that the Commission had placed him in Grade A 6, Step 3. However, his attention was drawn “to the fact that at the present stage of the organization of the Community, this engagement can be only provisional in nature.” The letter added: “This situation will be terminated as soon as possible by the conclusion of contracts of limited duration. It must be understood, however, that this letter is without prejudice to the grant of such contracts”.

At its 101st meeting on 12 April 1960, the Commission appointed the applicant as Deputy Chef de Cabinet to Mr Schaus, a Member of the Commission, in Grade A3, Step 1, with effect from 1 May of that year. At its 170th meeting on 18 December 1961, it decided to transfer him to the Commission's Secretariat and to appoint him head of the Liaison with the Community Institutions and European Assemblies Division, leaving him in Grade A 3 whilst authorizing him to take up his duties on a provisional basis in the cabinet of Mr Schaus until his replacement (which occurred only on 17 December 1962).

Pursuant to Articles 1, 2, 3, 7 and 102 of the Staff Regulations of Officials of the European Communities, which entered into force on 1 January 1962, the applicant was appointed, by decision of the Commission of 14 December 1962, as from 1 January 1962, an official of the European Communities and established in Grade A3, Step 1. In view of the rights under the Staff Regulations with that appointment conferred upon him, he waived, by signing an acknowledgment of receipt dated 21 December 1962 and in accordance with Article 104 of the Staff Regulations, the benefit of the provisions of his previous contract.

By note of 23 April 1980, the applicant lodged, pursuant to Article 90 (2) of the Staff Regulations, a complaint against the decision contained in the note of the Personnel Directorate of 17 April 1980 to take 1 January 1962 as the date of his establishment for the purpose of applying Article 11 (2) of Annex VIII to the Staff Regulations.

That provision lays down that:

“An official who enters the service of the Communities after leaving the service of a government administration or of a national or international organization or of an undertaking shall have the right, on becoming established with that Community, to pay to it either: The actuarial equivalent of retirement pension rights acquired by him in the government administration, national or international organization or undertaking: or The sums repaid to him from the pension fund of the government administration, organization or undertaking at the date of his leaving its service. In such case the institution in which the official serves shall, taking into account his grade on establishment, determine the number of years of pensionable service with which he shall be credited under its own pension scheme in respect of the former period of service, on the basis of the amount of the actuarial equivalent or sums repaid as aforesaid”.

The applicant, a Luxembourg national, worked in Luxembourg from June 1954 to October 1958 before entering the service of the Commission. He paid contributions to the Luxembourg Caisse de Pension des Employés Privés [Pension Fund for Private Employees] (hereinafter referred to as “the Luxembourg Fund”). Following lengthy negotiations, it became possible at the beginning of 1980 to transfer pension rights acquired under a contributory pension scheme in the Grand Duchy of Luxembourg. The applicant submitted a request, within the prescribed period, to have his rights transferred. By a preliminary decision of 5 June 1980, the Luxembourg Fund informed the applicant that the contributions with which he had been credited, amounting to LFR 129757, including interest, had been transferred to the Community scheme.

In support of his complaint of 23 April 1980, the applicant contended primarily that the term “establishment”, to which the provision cited above refers, means “permanent engagement” and that such engagement should take place before the date of the entry into force of the Staff Regulations, that is to say, in his case, in October 1958. According to Mr Étienne's interpretation, it is the date of engagement which must be taken as the reference date for the purpose of calculating the increases in seniority to which a right is acquired by a transfer such as that provided for by Article 11 (2) of Annex VIII to the Staff Regulations.

That complaint was rejected by the Commission's decision of 18 November 1980, notified to the applicant by letter of 2 December 1980 and countersigned by him on 4 December.

This application, which was brought against that decision, was received at the Court Registry on 17 February 1981.

The written procedure followed the normal course.

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

II — Conclusions of the parties

The applicant claims that the Court should:

Declare the application admissible and well-founded inasmuch as the contested decision refuses to recognize for the purpose of calculating the actuarial equivalent provided for by Article 11 (1) [sic] of Annex VII [sic] to the Staff Regulations the date on which the applicant actually took up his duties as an official of the Commission;

Order the defendant to pay the costs.

The Commission contends that the Court should:

Declare the application unfounded;

Make an appropriate order as to costs.

III — Submissions and arguments relied upon by the parties

1. In his action, the applicant contends first of all that the application of the Staff Regulations has in no way affected the dates on which the pension rights of officials established pursuant to Article 102 of the Staff Regulations took effect (in his case, as from 1 October 1958). Furthermore, he was engaged as “an official” in a post included in the detailed list of posts and not as “a member of the auxiliary staff”, “a member of the temporary staff” or “a servant”. The conditions governing his engagement and his employment displayed features typical of the national or international public service, namely the official's fulltime service in the departments employing him and his assignment to a post forming part of an administrative organization. The administration's letter of 3 December 1958 is equivalent to a formal clause linked to the right of dismissal but unrelated to the other characteristics of the public service. Since the Commission never relied upon that formal clause, it could not have prevented the applicant from acquiring the status of public servant within the appropriate period. The application of the Staff Regulations is an obligation under the Treaty (Article 212) and the belated date on which an official of the Communities became subject to the Staff Regulations may not be held against him ex post as regards inherent pension rights. The applicant ceased to be affiliated to the Luxembourg Fund's scheme when he joined the Communities' pension scheme (October 1958, the date adopted by the Luxembourg Fund for the purpose of his establishment). It would be arbitrary to take as the reference period for the purpose of calculating the actuarial equivalent a career level attained by the applicant more than three years after he discontinued his affiliation to the Luxembourg Fund and joined the scheme of the Communities, quite apart from the fact that it would result in unjustified discrimination between officials who become subject to the Staff Regulations by virtue of Article 102 thereof and officials newly recruited. The applicant contends in the alternative that the Commission was precluded from notifying to him an unfavourable reply on 18 November 1980 after the issue, in response to the applicant's request of 23 April 1980, of a certificate of establishment dated 7 May 1980 whereby the Commission informed the Luxembourg Fund that the applicant had become established on 1 October 1958 and was covered by the Community pension scheme for officials since that date. The Commission may not plead an administrative error since the applicant had expressly drawn its attention to that point. Although the applicant's note of 23 April 1980 was interpreted by the Commission as a complaint, within the meaning of Article 90 (2), the applicant takes the view, in good faith, that the Commission's response (issue of a certificate of establishment) was a favourable one, since it could not be interpreted as an implied decision of rejection under the second subparagraph of Article 90 (2), and that the Commission is therefore barred from notifying to the applicant an express decision of rejection.

2. In its defence, the Commission emphasizes that although in the notice concerning the applicant's taking up of his duties he is described as an official that in no way affects the essentially insecure nature of his engagement before the Staff Regulations entered into force. Far from being a formal clause, the reminder contained in the letter of 3 December 1958 on the right to terminate unilaterally contracts of employment for an indefinite period corresponds to the intention of the parties not to create as between themselves any definitive legal relationship before the institution of the Staff Regulations and the Conditions of Employment referred to in Article 212 of the Treaty (cf. judgments of 15 July 1960, Joined Cases 43, 45 and 48/59 Lachmüller [1960] ECR 463 and of 14 December 1961, Case 12/61 Gorter [1961] ECR 271). The Staff Regulations made no provision for the automatic reengagement by the institutions of members of staff recruited by them before the Staff Regulations entered into force. Moreover, that is immediately apparent from the wording of Article 102 of the Staff Regulations. The establishment to which this article relates is an expression of the transition from one legal situation to another. A servant previously recruited under a contractual relationship on a provisional basis, obtains as a result and at the time of his establishment, the benefit of the Staff Regulations and the resulting security of employment. To underline that transition and break with the past, Article 104 of the Staff Regulations, which has been repealed, laid down that in order for the Staff Regulations to be applied to him the person concerned had to waive the benefit of the terms of his contract; the waiver had to be signed by him on his becoming established, as was done by the applicant. As the Court observed in its judgment of 4 April 1973 in Case 31/72 Angelini [1973] ECR 410, such a waiver might properly relate to the rights arising under the earlier contract, including acquired rights, and is moreover entailed, except where there is a provision to the contrary, by the transition from a contractual relationship to one governed by the Staff Regulations. The previous contract is taken into account only in so far as this is expressly provided for by the Staff Regulations and to that extent alone. The applicant is therefore quite mistaken in maintaining that he enjoyed, without interruption, the status of a public official and consequently security of employment. The question whether the periods of service completed by established officials under Article 102 of the Staff Regulations should be taken into account for the purpose of calculating their years of pensionable service under the Community scheme is expressly regulated by a transitional provision, Article 48 of Annex VIII to the Staff Regulations. Thus the applicant must undoubtedly be credited with the period from 26 October 1958 to 31 December 1961 for the purpose of calculating his pension. Establishment as an official, which entails the application to him of the Staff Regulations, must not be confused with entry into the service of the Community. First, establishment always follows entry into the service, if only after completion of the probationary period (Article 34 (1) of the Staff Regulations) and, secondly, whilst establishment confers on the servant the status of an official appointed on a permanent basis, it is possible to enter the service of the Communities in different capacities, either on a contractual basis or as a probationary official. There is no reason to attribute to the terms “official” and “establishment”, as used in Article 11 (2) of Annex VIII to the Staff Regulations, any meaning other than that which they have everywhere else in the Staff Regulations. As regards the discrimination, which is alleged to result from the interpretation of Article 11 (2), between officials to whom the Staff Regulations are applied by virtue of Article 102 and other officials, the Commission recalls that the dispute does not concern the taking into account, for the purpose of calculating the applicant's Community pension, of the years of service completed with the Communities in the period preceding the entry into force of the Staff Regulations but only those years preceding his entry into service, in the form of a number of additional years of pensionable service corresponding to the amount transferred. The transfer of pension rights was provided for by the Staff Regulations and is thus a new benefit enjoyed by servants established pursuant to Article 102 only from the date on which the Staff Regulations entered into force. The Commission takes the view that their position is no different from that of officials in a comparable situation, but is in fact even more favourable than theirs. In the case of a member of the temporary staff recruited as a probationary official who subsequently becomes established, the number of additional years of pensionable service granted in respect of the period preceding his entry into the service of the Communities is calculated in exactly the same manner as it is for servants to whom Article 102 is applied. In both cases, the amount transferred is converted into a notional pension and then into years of pensionable service under the Staff Regulations on the basis of the annual basic salary corresponding to the grade on establishment. A member of the temporary staff cannot claim that that grade and salary are the same as they were on the date of his entry into service as a member of the temporary staff. In view of the obligation to complete a probationary period (from which servants brought in under the Staff Regulations have been exempted), he is even credited, all other things being equal, with slightly fewer years of pensionable service. The position of a member of the local staff or of the auxiliary staff who becomes a probationary official and subsequently an established official, is virtually indistinguishable. Although, in both cases, the number of years of pensionable service under the Staff Regulations is determined by reference to the annual basic salary corresponding to the grade on establishment, the reason for this is that it makes sense to transfer pension rights only from the time when, as a result of his establishment, the official obtains the security of employment which characterizes the system embodied in the Staff Regulations. To permit, in the case of servants established under Article 102, the number of years of pensionable service to be calculated on the basis of their annual basic salary on the date of their entry into service would be to discriminate in their favour. Alternatively, the defendant objects that the mention, on the form entitled “Application for the repayment of pension rights”, of 1 October 1958 as the date of the applicant's establishment may in no way be regarded as a decision of the appointing authority within the meaning of the last subparagraph of Article 90 (2) of the Staff Regulations. The reasons for this are three in number and are that the decision in question was not taken by the appointing authority, that is to say by the Commission, that it was not accompanied by a statement of the reasons on which it was based and that it was not notified to the applicant since the form was returned by the administration to the sender, the Luxembourg Fund. Furthermore, the purpose of that form was not to convey a Commission decision, but merely to obtain certain information to assist the Luxembourg Fund. The mention of the date 1 October 1958 on that form had no bearing on the decision concerning the transfer of pension rights or on the decision to grant the applicant rights under the Community pension scheme. To begin with, it did not lead to any adjustment of the amount transferred as compared to that specified in the statement of account of 26 March 1980 drawn up by the Luxembourg Fund and, secondly, the Commission has not taken any decision crediting the applicant with a greater number of years of pensionable service under the Staff Regulations by taking into account the date of 1 October 1958, since the proposal to grant him rights under the Community pension scheme, annexed to the Director of Personnel's note of 17 April 1980, was not withdrawn and replaced by another proposal.

3. In his reply, the applicant contends that the defendant mistakenly presents the application of the Staff Regulations to an official occupying a post as a discretionary appointment. Article 102 of the Staff Regulations clearly sets members of the temporary and auxiliary staff apart from servants occupying a permanent post. It provides that the latter “may” be established in the grade and at the step of the Staff Regulations corresponding to the grade and step previously allocated to him. The term “may” lacks altogether the optional nature which the defendant seeks to attribute to it. An official occupying a post may be denied the benefit of retaining his status, grade and step only following an unfavourable report by an independent establishment board called upon to take a decision in accordance with specific adverse criteria. In the absence of an unfavourable report, a servant occupying a permanent post must be “established” in his grade and at his step. The applicant, like the vast majority of his colleagues occupying a permanent post, was thus retained since there were no unfavourable reports. The waiver by an official of the terms of his contract cannot have any bearing on the elements inherent in the status of official and incorporated in the Staff Regulations, namely assignment to a permanent post, continuation of the duties performed and retention of the grade and step, but can only affect the specific elements of the former contract not included in the Staff Regulations. The defendant has failed to mention a vital statement contained in the waiver: “The official retains however the seniority acquired since his entry into the service of the Communities. Such seniority shall be taken into consideration in particular in calculating his pension rights. However, waiver does not preclude payment in respect of the rights relating to the period preceding the application of the Staff Regulations to the official.” Article 11 (2) of Annex VIII to the Staff Regulations forms part of Chapter II of that annex relating to the calculation of the retirement pension. Even assuming, as the defendant his given to understand, that Article 48 of Annex VIII constitutes an exception and that the precise point at issue is not concerned with the “calculation” of the pension none the less the reference to that “calculation” has an illustrative character (use of the expression “in particular”) and the applicant may not be deprived of the benefit of the exemption clause which quite obviously covers the official's retirement pension rights in their entirety. The defendant's argument to the effect that Article 11 (2) constitutes an advantage which, though not previously provided for by the Staff Regulations, was introduced by the latter is untenable. The institutions were under an obligation to ensure the application of a transferable insurance system (Regulations Nos 3 and 4, now repealed) or to establish a system for the repayment or transfer or pension rights. The applicant's intention to join the European institutions' system of social security is all the more evident from the fact that he failed to exercise the option of remaining affiliated to his original insurance scheme by paying the appropriate contributions deducted from those payable under the provisional system of social security for Community officials. Article 11 of Annex VIII is a fundamental provision of the Staff Regulations and of the pension scheme. No one is better able to describe the scope of that provision than the Commission itself which, in its action of 4 June 1980 against the Kingdom of Belgium (Case 137/80 Commission v Belgium [1981] ECR 2393) recalled that it is “an essential provision of the Staff Regulations of Officials inasmuch as it is intended to guarantee officials a pension scheme which takes account of all the service completed in the course of their national or international careers as well as their careers with the European Communities.” Since the applicant's affiliation to the Luxembourg Fund ceased when he entered the service of the Communities as an official, it follows necessarily, according to the Commission itself, that the actuarial equivalent must be calculated by reference to the time when he took up his duties. It would be wrong to assimilate the probationary period provided for by the Staff Regulations to the period preceding the entry into force of those regulations. The duration of the probationary period as laid down by the Staff Regulations is uniform and mandatory. The period preceding the entry into force of the Staff Regulations was based on decisions taken by the institutions. Since the adoption of the Staff Regulations, the only time which may be taken into account is the date of a person's engagement as an established official. In the case of officials engaged before the Staff Regulations entered into force, and in the absence of specific provisions governing the probationary period, the date of commencement can only be that on which they took up their duties in a permanent post in the service. Moreover, during the probationary period, there can be no advancement in a career if, in the period before the Staff Regulations came into force, changes occurred in the duties performed and promotions took place, as in the case of the applicant. The defendant's reasoning therefore leads to a situation in which an official engaged before the Staff Regulations entered into force loses part of the benefit resulting from any promotions which he may have been accorded. In connection with the ancillary problem raised by him, the applicant does not challenge the appointing authority's interpretation of his note of 23 April 1980 but requests, in return, that the Commission should treat it and the text of 7 May 1980 on an equal footing. The text of 7 May is binding on the institution in that it bears the signature of the competent official, authenticated by the official stamp of the institution. However, there cannot be the slightest doubt concerning the scope of the question raised, namely the date of establishment, in view of the fact that the latter constituted the very subject-matter of the “complaint” of 23 April 1980. Finally, the form was attached to the “complaint” of 23 April 1980 but with an explanation to the effect that the applicant had carefully refrained from completing that part of the questionnaire leaving it entirely to the Commission to provide, with a full knowledge of all the circumstances, a comprehensive answer to the question raised. It follows from the foregoing that the appointing authority's decision of 18 December 1980 reverses a favourable decision in response to a request and therefore abolishes a vested right. The applicant takes the view that he was entitled to believe at the time that his right had been recognized. Even assuming that his note of 23 April 1980 constituted a “complaint” he could not reasonably be expected to interpret the administration's silence for four months as a rejection. It therefore came as a complete surprise to the applicant when he was notified of the appointing authority's decision expressly rejecting his complaint six months and 25 days later, that is to say five days before the final date for lodging an appeal against an implied rejection. The fact that the Commission waited until then before replying shows that it had no intention of giving a clear-cut answer by interpreting the Staff Regulations reliably and unequivocally but that after considerable hesitation it reversed its position in extremis.

4. In its rejoinder, the Commission considers that the applicant exaggerates unduly the significance of the term “official” in the notice concerning the taking up of his duties. To begin with, that word is not used either in the letter of engagement of 25 October 1958 or in that of 3 December 1958 laying down the conditions governing his engagement. In addition, it should not be forgotten that at the time it was standard practice to refer to the terminology of the Staff Regulations of the European Coal and Steel Community according to which servants recruited on a temporary basis under contracts for an initial duration of one year renewable for a further year were described as “temporary officials”. Last, and most important, there is the established case-law of the Court which has already been cited. In the defendant's opinion, there is no doubt that the applicant was engaged under contract on a provisional basis. It is common ground that the entry into force of the Staff Regulations transformed the legal position of servants previously employed by one of the Community institutions. Only since that date has it been possible for servants under contract occupying a permanent post in one of the Community institutions on 1 January 1962 to become established and thus acquire the status of an official. However, establishment does not have the effect of retroactively conferring the status of an official on the persons concerned. If that had been the case, Article 102 of the Staff Regulations would have been drafted in different terms and “confirmation” would have been used instead of “establishment.” The fact that a servant employed on a contractual basis by an administrative authority has, before being appointed as an official by the latter, performed tasks which may be considered as satisfying a permanent need of the service and has de facto enjoyed security of employment is not capable of conferring upon him ab initio the status of an official, still less that of an established official. Servants occupying a permanent post in one of the Community institutions before the entry into force of the Staff Regulations had no vested right to be appointed as officials. The favourable treatment constituted by establishing them was effected, case by case, by an express decision of the appointing authority. The only servants who could benefit from this treatment were those who fulfilled all the conditions laid down and in particular that of not being the subject of an unfavourable report by the Establishment Board. Although it is true that it has thus been possible to establish the majority of servants occupying permanent posts, none the less, in a large number of cases, the Establishment Board made an unfavourable report and the contracts of the servants concerned were terminated. The indications to which the applicant attributes such great importance, set out at the foot of his written waiver, were added pursuant to two special provisions of the Staff Regulations, Articles 103 and 104 (both repealed). Seniority is not relevant in connection with the application of Article 11 of Annex VIII to the Staff Regulations. If a number of additional years of pensionable service in respect of services rendered in the private or public sector before an official's entry into the service of one of the Community institutions is to be taken into account under its own pension scheme by the institution, the official is required to submit an application at the time of his establishment and the number of years of pensionable service is determined having regard to the grade on establishment. Thus it is the concept of establishment which is decisive in this context. No specific provision is recognized by the Staff Regulations in favour of established officials who, on becoming established, exercise their new option to pay to the Community the actuarial equivalent of the retirement pension rights previously acquired in the private or public sector or the sums repaid, whereupon the institution credits them with an additional number of years of pensionable service. The additional years of pensionable service with which they are thus cedited are determined having regard to their grade on establishment. The Commission's statement, in connection with another case, of the importance of Article 11 of Annex VIII to the Staff Regulations in that its purpose is to guarantee officials a pension scheme which takes account of all the service completed in the course of their career does not impose an obligation on the Commission to determine the additional number of years of pensionable service otherwise than by reference to the grade on establishment. In this case, the Commission takes account of all the periods of service completed by the applicant in the course of his career including both those spent in the service of the Commission prior to his “establishment” and those performed earlier. Therefore there is no hiatus in the applicant's career. It is wrong to claim that the effect of the defendant's reasoning is to deprive its servants of part of the benefit which results from the promotions (more precisely, from the relocation on the salary scale) accorded to them during the period in question. In fact the reverse is true. The method of calculation advocated by the applicant consists in taking into account his lowest salary, in other words that corresponding to Grade A 6, thus disregarding his “promotions” over the same period which preceded the entry into force of the Staff Regulations. Furthermore, the defendant emphasizes that if that method had to be adopted, the applicant would benefit from it unduly. To be more precise, before the entry into force of the Staff Regulations, basic salaries were paid net of tax and excluded the local allowance of 15% with the result that to take that salary into account would be to credit the applicant with more years of pensionable service than would be the case if recourse were had to the concept of salary contained in the Staff Regulations. With regard to the argument put forward by him in the alternative, the applicant cannot be unaware that under Article 90 (2) of the Staff Regulations, only the appointing authority is competent to take a decision on a complaint and that if an express decision is taken, it must be notified to the complainant together with a statement of the reasons on which it is based. Accordingly he cannot claim that the preprinted certificate of establishment and application to transfer his contributions, completed on 7 May 1980 by the competent official, is a decision of the appointing authority, particularly since that official informed the applicant repeatedly that in his own opinion the applicant's argument was totally misconceived. The defendant considers it useful to add that the form in question is one drawn up in advance by the Luxembourg Fund in which the term “establishment” does not have the same scope as that of the same term as used in the Staff Regulations, but also applies to public servants of international organizations such as the United Nations Organization (UNO), the Organization for Economic Cooperation and Development (OECD) and the European Investment Bank, where the concept of established official is unknown: in any event, even assuming that the mention of the date 1 October 1958 on the abovementioned certificate may be considered as a decision of the appointing authority on the applicant's complaint, that decision is unlawful on the ground that it is contrary to Article 11 (2) of Annex VIII to the Staff Regulations, with the result that the appointing authority was entitled to withdraw it within a reasonable period. The period is, in this case, a reasonable one since the certificate is dated 7 May 1980 and the express decision to reject the complaint was taken on 18 November of the same year.

5. In reply to a question put by the Court, the Commission stated that it had dealt with approximately 50 cases similar to that of the applicant. In each case, it had taken 1 January 1962 as the date of establishment for the purpose of applying Article 11 (2) of Annex VIII to the Staff Regulations. So far, the applicant was the only official to have criticized the Commission's modus operandi.

IV — Oral procedure

At the sitting on 8 October 1981, oral argument was presented by the parties.

The Advocate General delivered his opinion at the sitting on 29 October 1981.

Decision

1. By application received at the Court Registry on 17 February 1981, Mr Étinee an official of the Commission of the European Communities, brought an action, pursuant to Article 179 of the EEC Treaty, for the annulment of the Commission's decision of 18 November 1980 rejecting his complaint of 23 April 1980 concerning the interpretation of the term “grade on establishment” which appears in Article 11 (2) of Annex VIII to the Staff Regulations of Officials.

2. The applicant was appointed by the Commission of the European Communities, at its meeting on 14 October 1958, to perform, in the Directorate-General for the Internal Market, the duties of a member of the Industrial Affairs Division. He took up his duties on 26 October 1958. By letter of 3 December 1958, he was informed that the Commission had placed him in Grade A 6, Step 3. In the same letter his attention was drawn “to the fact that at the present stage of the organization of the Community, this engagement can be only provisional in nature.”

3. On 12 April 1960, the applicant was appointed Deputy Chef de Cabinet to a Member of the Commission, in Grade A 3, Step 1 as from 1 May 1960.

4. Pursuant to Article 102 of the Staff Regulations, which entered into force on 1 January 1962, he was appointed, by decision of the Commission of 14 December 1962, an official of the European Economic Community as from 1 January 1962, established in Grade A 3, Step 1, and assigned to a post in the Commission's Secretariat.

5. Article 11 (2) of Annex VIII to the Staff Regulations provides that an official who enters the service of the Communities after leaving the service of a government administration or of a national or international organization or of an undertaking has the right, on becoming established, to pay to it either: the actuarial equivalent of retirement pension rights acquired by him in the government administration, national or international organization or under- taking; or the sums repaid to him from the pension fund of the government administration, organization or undertaking at the date of his leaving its service. In such a case, the institution in which the official serves must, taking into account his grade on establishment, determine the number of years of pensionable service with which he is to be credited under its own pension scheme on the basis of the amount of the actuarial equivalent or sums repaid.

6. Before he entered the service of the Commission, the applicant was affiliated to the contributory pension scheme of the Grand Duchy of Luxembourg. The transfer of pension rights acquired under that scheme became possible only at the beginning of 1980.

7. In June 1980, the Luxembourg Caisse de Pension des Employés Privés [Pension Fund for Private Employees] (hereinafter referred to as “the Luxembourg Fund”) agreed to transfer to the Commission the sum of LFR 129757 representing the contributions paid by the applicant in respect of the period from June 1954 to October 1958, together with interest.

8. Having regard to the applicant's grade on the date of his establishment and of the amount transferred by the Luxembourg Fund, the Commission calculated in April 1980 that the period of pensionable service with which he was to be credited amounted to 10 months and 29 days.

9. By letter of 23 April 1980 addressed to the Commission's Directorate of Personnel, the applicant challenged the Commission's interpretation of the expression “grade on establishment” used in Article 11 (2) of Annex VIII to the Staff Regulations. He contended primarily that the concept of “grade on establishment”, within the meaning of Article 34 of the Staff Regulations, had not formally come into existence at the time of his engagement as an official, that is to say, in October 1958, and deduced from this that since the intention behind Article 34 of the Staff Regulations was that reference should be made to the commencement of the career, it was necessary to take the date of his engagement and not that on which he became subject to the Staff Regulations, adopted in 1962, for the purpose of calculating his rights.

10. Since the Commission rejected his request by letter of 18 November 1980, the applicant brought this action. He maintains that he was engaged as “an official” and not as an auxiliary, temporary or other servant. That emerges from the Commission's letter of 25 October 1958 appointing him to perform the “duties” of a member of the Industrial Affairs Division, from the notice of 19 November 1958 concerning the taking up of his duties and from the letter of 3 December 1958 placing him in Grade A 6, Step 3. In his opinion, the statement contained in the letter to the effect that “at the present stage of the organization of the Community, this engagement can be only provisional in nature and may be terminated by either party at any time by one month's notice” constitutes merely a formal clause linked exclusively to the right of dismissal but unrelated to the other characteristics of the public service.

11. The applicant ceased to be affiliated in any way to the scheme of the Luxembourg Fund when he joined the Communities' pension scheme in October 1958. It would, in his view, be arbitrary to take as the reference period for the purpose of calculating the actuarial equivalent a career level attained by him more than three years after he discontinued his affiliation to the Luxembourg Fund and joined the scheme of the Communities. Such an interpretation would lead to discrimination between officials established under Article 102 of the Staff Regulations and officials newly recruited on the basis of those regulations.

12. Furthermore, he contends that the Commission itself agreed to that interpretation in a certificate of establishment and application for the transfer of contributions, dated 7 May 1980, addressed to the Luxembourg Fund and specifying that the applicant “has become established as an international public official with effect from 1 October 1958 and has been covered by the pension scheme for international public officials since 1 October 1958.”

13. In the alternative, the applicant argues that the Commission was precluded from rejecting the complaint on 18 November 1980 after the applicant's request of 23 April 1980 had evoked a favourable response, namely the issue of the aforesaid certificate of establishment.

14. The applicant's argument cannot be accepted. Article 212 of the Treaty provided that the Council was to lay down the Staff Regulations of officials, whilst Article 246 (3) of the Treaty provides that “until the Staff Regulations of Officials ... have been laid down, each institution shall recruit the staff it needs and to this end conclude contracts of limited duration.” The Court has on several occasions refuted the proposition that members of the staff engaged under contract, even for an indefinite period, may legitimately expect to have the Staff Regulations applied to them in respect of the period preceding the entry into force of those regulations. Moreover, such contracts could not give rise in law to an inference that there was a common intention to create a permanent employment relationship, in view of the fact that such an intention would have been manifestly contrary to the principle contained in Article 246 (3) of the Treaty.

15. Article 102 of the Staff Regulations contains the provisions governing the establishment under the Staff Regulations of servants occupying a permanent post when those regulations entered into force. It states, in particular, that there must be no unfavourable report on the servant by the Establishment Board, which shows that the servant's establishment may not be regarded as an inevitable consequence of his previous engagement. Article 48 of Annex VIII to the Staff Regulations contains provisions enabling an official to whom the Staff Regulations are applied pursuant to the transitional provisions to enjoy his pension rights “computed from the date of his joining the temporary joint providence scheme of the institutions of the Communities.” It follows from all those provisions that an official may not claim to have become established before the Staff Regulations entered into force.

16. With regard to the alleged discrimination in relation to a newly recruited official, it must be observed that the two situations are not comparable. An official who begins a probationary period may not be established in a grade corresponding to a career bracket which is higher than that in which he was recruited when he began his probationary period. Accordingly, it cannot be said that an official recruited under the system embodied in the Staff Regulations benefits from a situation comparable to that of the applicant who, following his establishment in Grade A 3, claims to rely, for certain purposes, on Grade A 6 in which he was placed more than three years prior to his establishment.

17. The applicant deduces his final argument from the fact that a Commission , official, after receiving the applicant's letter of 23 April 1980, drew up the certificate of establishment addressed to the Luxembourg Fund and that the certificate specifies 1 October 1958 as the “date of establishment.” Consequently, the Commission accepted by implication the argument put forward by the applicant and is thus no longer in a position to challenge its validity.

18. That argument is untenable. It is to be observed that the certificate in question was made out on a form drawn up in advance by the Luxembourg Fund on the basis of the Law of 14 March 1979 and, in particular, of Article 7 thereof. The scope of the term “establishment” contained in that law differs from the scope of the same term as used in the Staff Regulations. It applies not only to officials of the European Communities established within the meaning of the Staff Regulations but also to officials of international organizations where the concept of established officials is unknown. The applicant is therefore mistaken in drawing from the use of the word “establishment” in that certificate the conclusion that the Commission, by virtue of that fact alone, recognized his establishment within the meaning of the Staff Regulations as from October 1958. Furthermore, the Commission has stated in the course of the oral proceedings that the Commission official who completed that form gave the applicant to understand, both before and after its completion, that he considered the applicant's argument, according to which he became established within the meaning of the Staff Regulations before they entered into force, to be mistaken. It follows that the applicant himself knew that the certificate did not have the scope which he now attributes to it before the Court.

19. It is apparent from an examination of the arguments put forward by the applicant that the application must be dismissed as unfounded.

Costs

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

21. However, under Article 70 of the Rules of Procedure, the costs incurred by the institutions in actions by employees of the Communities are to be borne by those institutions.

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

1 Dismisses the application as unfounded;

2 Orders the parties to bear their own costs.