JUDGMENT OF 28.9.1983 — CASE 148/82 RENAUD v COMMISSION

the same grade. Officials whom the Commission has decided to retire do not enjoy any preference in that respect over the other officials who qualify for consideration. They must however have an adequate opportunity properly to safeguard their interests.

THE COURT (Third Chamber) composed of: U. Everling, President of Chamber, Lord Mackenzie Stuart and Y. Galmot, Judges, Advocate General: G. F. Mancini Registrar: J. A. Pompe, Deputy Registrar

gives the present

JUDGMENT

Facts and Issues

I — Facts and written procedure

The applicant is an arts and law graduate and has a degree awarded by the Ecole Nationale d'Administration; he is on unpaid leave from the French administration. He took up his duties at the Commission on 1 September 1977 as an official in Grade A 2, as a chief adviser in the Directorate General for Energy (DG XVII). His duties related essentially to international energy problems and bilateral and multilateral negotiations.

The applicant was informed by the President of the Commission in a letter dated 4 May 1981 that it was intended to adopt a measure retiring him on the basis of Article 50 of the Staff Regulations. Within the framework of the guidelines laid down on 26 March 1980 on the basis of the Spierenburg and Ortoli reports, the Commission planned to dispense with certain posts of chief adviser. Upon being invited to submit his observations, the applicant mentioned the difficulties of securing readmission to the civil service from which he had been seconded and asked to be assigned to another post in his grade in the Commission. The President of the Commission replied by letter of 24 June 1981 confirming the commission's intention to retire him but assuring him that the Commission would give careful consideration to his observations and would consider the possibility of assigning him to another post in his grade. The Commission nevertheless decided on 8 July 1981 to apply Article 50 of the Staff Regulations. The applicant was retired in the interests of the service with effect from 1 November 1981. He was not assigned to another post in his category corresponding to his grade and he therefore received the benefits payable in such cases.

The applicant submitted an application for the post of director of Directorate D in Directorate General I for External Relations on 9 September 1981. His application for that post was unsuccessful. He lodged a complaint under Article 90 (2) of the Staff Regulations, seeking the annulment of the decision retiring him. The Commission did not reply to his complaint, and this was therefore deemed to constitute an implied decision rejecting it against which an action might be brought four months after the day on which the complaint was lodged. After the applicant brought the present action, the Commission decided at its meeting of 18 May 1982 upon the wording of a reply to the complaint, which was notified to the applicant by letter of 3 June 1982. The letter rejected the complaint.

The applicant brought the present action by application lodged at the Court Registry on 12 May 1982. The written procedure followed the normal course.

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

II — Conclusions of the parties

The applicant claims that the Court should:

A. Primarily:

1) Annul the defendant's decision of 8 July 1981 retiring the applicant;

2) Annul the implied decision rejecting the complaint which was lodged in that behalf on 14 October 1981;

B. In the alternative:

3) Annul the defendant's decision not to assign the applicant to another post in his category corresponding to his grade and, more particularly, not to assign him to the post of director of Directorate D in Directorate General I for External Relations;

4) Annul the defendant's decision whereby, after the applicant had been retired, the posts in his category corresponding to his grade were filled and, more particularly, the defendant's decision whereby the post of Director of Directorate D in Directorate General I for External Relations was filled;

5) Annul the implied decision rejecting the complaint lodged by the applicant on 14 October 1981;

6) Order the defendant to pay the costs.

The Commission claims that the Court should:

Dismiss the application;

Adjudicate as to costs in accordance with the relevant provisions.

III — Submissions and arguments of the parties

A — The decision to retire the applicant

According to the applicant, the decision retiring him does not state sufficiently, in the prescribed manner, the grounds on which it is based. The justification for the decision retiring him was worded as follows:, “The Commission has decided, as part of a general internal reorganization, to dispense with certain posts of chief adviser, including that held by Mr Renaud ...” That statement is entirely general and contains no specific details. The contested decision erroneously indicates that in its letter of 24 June 1981 the Commission told the applicant of the reasons for the envisaged measure. In that letter no details were given, only generalities once again. The applicant refers to the judgment of the Court of 11 May 1978 in Case 34/77 Oslizlok [1978] ECR 1099, paragraph 18 of the decision.

The applicant also accuses the defendant of misuse of powers. The contested decision was adopted within the framework of a generalized application of Article 50 of the Staff Regulations, the purpose of which is to create vacancies. The only reasons which can justify retirement pursuant to Article 50 of the Staff Regulations are those based on the objective requirements of the service or on an assessment of the individual qualities of officials in the light of those requirements. Article 50 of the Staff Regulations calls for a scrupulous examination of each individual case and cannot be relied upon for an operation akin to the American “spoils system”, where a change of the President entails a shuffle of the senior officials. It is contrary to the principles governing the European Civil Service, the career system and stability of employment, even though that stability may not be absolute for an official in Grade Al or A 2. If, in the applicant's case, there really was an objective requirement of the service justifying his retirement, the Commission could have abolished that post but appointed the applicant to one of the vacant posts of director (see under heading B below).

The Commission refers to the opinion of Mr Advocate General Warner in Case 34/77, Oslizlok, in which the Advocate General considered that decisions adopted pursuant to Article 50 are not required to state the grounds on which they are based. In its judgment in that case, the Court emphasized the considerable discretionary power vested in the Commission. The Commission is under an obligation scrupulously to examine the circumstances of. the case and to give the official a prior opportunity properly to defend his interests. Even if there was no formal requirement for the decision retiring him to state the grounds on which is was based, the applicant was nevertheless aware of the reasons which induced the Commission to consider retiring him. Those reasons are apparent from the letters of 4 May and 24 June 1981. If, as part of a general internal reorganization, the Commission arrives at the conclusion that certain posts of chief adviser no longer fulfil a genuine requirement of the service, it is entitled to abolish them by recourse, to the procedure under Article 50 of the Staff Regulations. The Commission considered that it was important to reorganize Directorate General XVIII in order to adapt it to the new requirements. At its meeting of 15 July 1981 the Commission confirmed the proposals of Messrs Davignon and O'Kennedy to create a new Directorate E for Energy Saving and Alternative Energy Sources, Electricity and Heat and, in view of the transfers to the new directorate with regard to alternative energy sources, to rename Directorate D as the Directorate for Nuclear Energy and to put in charge of it Mr Caccia Dominioni who would be transferred, with his post, from Directorate General XII to Directorate General XVII. As regards the post then occupied by the applicant, there was no longer any reason for his post as chief adviser to be maintained and the post would be transferred from Directorate General XVII to Directorate General XII when the applicant ceased his duties.

The Commission is not under any obligation to give more details and in particular is not required to explain why it decided to dispense with some posts of chief adviser and to retain certain other posts.

The Commission defends its right to adopt a series of individual measures retiring officials in the interests of the service, provided that none of such measures is in itself in any way vitiated. It does not dispute the fact that the individual measures in question were to some extent adopted in order to facilitate the recruitment of officials of Greek nationality but they were also adopted with a view to the reorganization along the lines recommended by the Spierenburg and Ortoli reports. In other words, the various individual measures were in each case adopted on the basis of objective requirements of the service or the individual qualities of the officials concerned, in the light of such requirements, or both of those factors. The Commission is entitled to dispense with the applicant's post of chief adviser without previously transferring him to another post as director.

The applicant refers to an information bulletin issued by the Staff Committee in Brussels and an extract from the Staff Courier which deal, in critical fashion, with the Commission's decisions adopted on the basis of Article 50 of the Staff Regulations.

The applicant points out that it is apparent from the defendant's own written submissions that the applicant was retired by decision of 8 July 1981, before the decision to dispense with the post was taken on 15 July 1981 and even before the communication of 10 July 1981 from Messrs Davignon and O'Kennedy on the reorganization of Directorate General XVII for Energy, the directorate to which the applicant belonged. The statement of the reasons on which the retiremend decision of 8 July 1981 was based is incorrect, to say the least, in so far as it states that the Commission had decided, within the framework of a general internal reorganization, to dispense with certain posts.

The allegations contained in the application regarding the generalized application of Article 50 of the Staff Regulations in order to create vacancies, the decision to dismiss officials on the pretext of retiring them and the lists of victims prepared on an a priori basis, without any consideration of specific situations and before recourse to the proper procedure, are substantiated.

In its rejoinder the Commission does not deny that the retirement measures may possibly have created a degree of uneasiness. All that is important in these proceedings is to determine whether or not the disputed measures are legal. The Commission draws a distinction between its decision of 8 July 1981 to retire the applicant and its decision of 15 July 1981 which does not relate to the abolition of the applicant's post, a matter which was already settled, but had a wholly different purpose: it was concerned with reorganization of the Directorate General for Energy. That reorganization was carried out on the basis of the posts still assigned to Directorate General XVII. The sequence of events was that the Commission examined certain posts of chief adviser and dispensed with certain posts which had become unnecessary. Those retirements were followed, at a second stage, by a redistribution amongst the directorates general of the Commission of the posts provided for in the budget which were thus made available, accompanied by organizational measures. The reorganization was the result of a long period of gestation and reflected the objective needs of the service which were much wider in scope. The reason for which the Commission was induced to dispense with the applicant's post rather than some other post is simple: the Commission considered that the post was unnecessary.

B — The decision not to assign the applicant to another post

The applicant objects to the fact that he was not assigned to another post corresponding to his grade even though he possessed all the necessary abilities for other vacant posts corresponding to his grade and the fact that the Commission failed to state its reasons for not so reassigning him. Nor did the Commission examine on its own initiative the possibilities of reassigning the applicant, an official deprived of his post, as it was obliged to do.

The applicant mentions the post of director of Directorate A in Directorate General XVII for Energy. The area of responsibility of that directorate relates to energy policy, analyses and forecasts, and the conclusion of contracts relating thereto. The applicant is necessarily qualified to take on the tasks allocated to that directorate which, moreover, took over part of his staff.

The applicant submitted his application for the post of director of Directorate D in Directorate General I for External Relations. His suitability for that post is unequivocally apparent from his application. That post as director was filled by promotion of an A 3 official. Even if it were admitted that that official had the same abilities as the applicant for the performance of the duties attaching to that post, preference should have been given to the applicant. The latter maintains that an official in Grade A 2 who is retired must be assigned to a vacant A 2 post for which he has the required capabilities in preference to an official in Grade A 3.

As regards the Commission's decision to fill a post in Directorate General I, the applicant criticizes the absence of any statement of the grounds on which it was based. As regards the post in Directorate General XVII, the applicant criticizes the fact that the Commission did not on its own initiative examine the possibilites of reassigning him.

The Commission states in reply that it is vested with a discretionary power regarding the reassignment of any official deprived of his post to another post corresponding to his grade. The person concerned must however have an opportunity properly to safeguard his interests. The applicant had that opportunity and was aware of the posts as director which had become vacant in Directorate General I and Directoarte General XVII and submitted an application on 9 September 1981 for the first of those two posts.

The decision not to reassign an official to another post in the same grade does not formally have to state the grounds upon which it is based. According to the Court's decision in Oslizlok, there are considerations specific to a decision not to reassign an official which are distinct from those giving rise to the decision to retire him. The advisory committee on appointments to Grades A 2 and A 3 considered that the applications of the applicant and of Messrs Beseler and Exintaris in particular should be considered. After undertaking a comparative examination of the merits of the candidates, the Commission decided to give preference to the application of Mr Beseler who was head of the division entitled “Instruments of Autonomous and Conventional Policy; Dumping, Countervailing Duties and Safeguard Measures; Article 115 of the EEC Treaty; and General Questions”, by reason of his profound and specific experience on the problems of Directorate D in Directorate General I. The Commission rejects the view that the applicant had a preferential right to be reassigned to that post and considers that it remained within the confines of its discretionary power by choosing in preference to the applicant an official of lower rank who, nevertheless, had greater specific experience of the problems of the directorate in question and particularly of the problems of dumping.

As regards the post of director in the new Directorate DGXVIIA, which brings together all the activities of a horizontal nature, such as energy policy, analyses and forecasts, management and follow-up of contracts, the applicant, doubtless considering that he did not possess the required qualifications, did not submit an application. The Commission filled that post after 1 November 1981 and appointed an external candidate who had all the required qualifications.

The applicant insists that he had all the required skills for the post of director of Directorate DGID and cites the opinion of the advisory committee on appointments to Grades A 2 and A 3 to that effect. He also insists on the priority which must be given to reemployment of an A 2 official who is retired. Even though that priority may not be apparent expressis verbis from the third paragraph of Article 50, it is inherent in the nature of things. Where there are two candidates for one post, who have the same qualifications, for one of them nonappointment involves dismissal whilst for the other the only consequence of nonappointment is that he is not promoted.

Equity logically requires that, as far as possible, reassignment of an official deprived of his post should be adopted as a priority criterion, at least where an official of a lower grade who is seeking promotion is involved. The principle of stability of employment for officials also requires that preferential right to be recognized. There is no formal statement of the reasons on which the decision not to reassign the applicant is based and the administrative file does not reveal the reasons. It is not sufficient to affirm that the merits and skills of the candidates were compared without giving even a summary indication of the reasons which led to the appointment of the official seeking promotion. Even though it may be stated in the defence that the choice of Mr Beseler derived from the fact that he had wider experience of the problems of dumping, that fact appears neither in the contested decision nor in the opinion of the advisory committee.

According to the Commission, the advisory committee makes a preliminary selection by rejecting all applications other than those of candidates who fulfil the minimum conditions required for appointment to the post. It puts forward a list of those candidates in alphabetical order. The choice as between them is the prerogative of the appointing authority. The Commission gives more extensive information on' the qualifications of Mr Beseler who is the author of a work on dumping. It considered that Mr Beseler was the best of the candidates who had submitted applications. The alleged preferential right, if such a right exists, would in any case only be conceivable for the purpose of choosing between two candidates ex cequo. The considerations based on equity and stability of employment cannot take precedence over the overriding interests of the service. Moreover, the Staff Regulations provide for special treatment for officials in Grades A 1 and A 2.

Scope of the action

The parties agree that the action must be understood as extending to the Comission's decision of 6 April 1982 whereby it decided to appoint Mr Beseler to the post of director of Directorate D in Directorate General I, against which the applicant lodged a complaint on 28 May 1982, seeking annulment of the decision on the part of the appointing authority not to appoint him arid consequently for annulment of the decision whereby that post was filled.

IV — Oral procedure

The parties presented oral argument at the sitting on 18 March 1983.

The Advocate General delivered his opinion on 30 June 1983.

Decision

1. By application lodged at the Court Registry on 12 May 1982, Mr Renaud, a former official in Grade A 2 of the Commission of the European Communities, brought an action for the annulment of the Commission's decision of 8 July 1981 retiring him and for annulment of the decision not to assign him to another post in his category corresponding to his grade and of the decisions whereby, after the applicant had been retired, the posts in his category corresponding to his grade were filled. The claims in the alternative refer in particular to the posts of director of Directorate D in Directorate General I for External Relations.

2. The applicant took up his duties at the Commission on 1 September 1977 as an official in grade A 2 assigned to the post of chief adviser in Directorate General XVII for Energy. His duties related essentially to international energy problems and bilateral and multilateral negotiations.

3. By letter of 4 May 1981 from the President of the Commission, the applicant was advised that the Commission was considering retiring him on the basis of Article 50 of the Staff Regulations of Officials. After taking note of the observations of the applicant, the Commission decided on 8 July 1981 to retire him in the interests of the service with effect from 1 November 1981. Since the applicant had not been assigned to another post in his category corresponding to his grade, he received the allowance payable in such cases.

4. In support of his application for annulment, Mr Renaud claims that the grounds of that decision were not adequately stated and that it was moreover vitiated by misuse of powers. The statement of grounds was excessively general and devoid of any specific details. The decision retiring the applicant was adopted within the framework of a generalized application of Article 50 of the Staff Regulations intended to facilitate the replacement of senior officials when certain members of the Commission were changed, as occurs under the American “spoils system” where every change of President involves replacement of the senior officials. In this case the decision was in fact taken at a time when members of the Commission had just been reappointed or new appointments had just been made.

5. It has been held by the Court (judgment of 11 May 1978 in case 34/77 Oslizlok v Commission [1978] ECR 1099) that the Commission has a wide discretionary power regarding decisions retiring officials in Grades Aland A 2 A power of that kind presupposes considerable freedom of decision regarding the objective requirements of the service and the assessment of the individual qualities of the officials concerned and also a scrupulous examination of the relevant information.

6. The Court has also had occasion to make it clear that the institutions are empowered to organize and reorganize their departments according to their requirements.

7. The grounds relied upon by the Commission in its letter of 4 May 1980 and in the contested decision refer to the guidelines adopted by the Commission at its meeting of 26 March 1980 primarily on the basis of the Spierenburg and Ortoli reports. According to the Commission the reorganization was to affect more particularly the senior posts and to involve the abolition ot certain posts of chief adviser, including the applicant's post.

8. It is apparent from the documents published by the Commission that, following discussions within the Commission in September 1978, a group of five independent leading figures, presided over by the Ambassador Dirk Spierenburg, former Vice-President of the High Authority of the European Coal and Steel Community and former Permanent Representative of the Netherlands, was set up in January 1979 to examine the organization and functioning of the Commission. The group presented its report on 24 September 1979. It was widely publicized and was debated in the European Parliament. The third part of the report recommended certain changes in the administrative policy and organization of the Commission, including a reduction of the number of basic administrative units. The Commission accepted the principle of that reduction at a meeting held in October 1979. That meeting was followed by a statement to the Press by the President of the Commission, Mr Jenkins. The Commission also set up a working group under the chairmanship of Mr Ortoli which reported in March 1980.

9. These facts show that the internal reorganization of the Commission was thoroughly discussed over a long period and cannot be ascribed exclusively to the fact that new members of the Commission had been appointed. The fact that a relatively high number of senior officials were thus retired at the same time as the applicant does not, in itself, constitute a misuse of powers. Therefore, in the absence of any other evidence to support the applicant's allegations, the accusation of misuse of powers must be rejected.

10. Finally it is to be noted that the applicant had an opportunity to safeguard his interests, in so far as he was advised of the Comission's intentions by a letter of 4 May 1981. In that letter the Commission stated that it considered the applicant's post no longer to be necessary. The applicant was thereby provided with a sufficient basis to enable him to draw attention to the advantages which might accrue to the Commission from the retention of a post of chief adviser with a view to the discharge of the duties attached to that post until that time.

11. The application for annulment of the decision to retire the applicant must therefore be rejected.

12. In the alternative the applicant criticizes the fact that he was not assigned to another post. He considers that he was suitable for the post of director of Directorate I in Directorate General XVII for Energy and also submitted an application for the post of director of Directorate D in Directorate General I for External Relations. His suitability for that post was clearly apparent from his application. However the post in that directorate was filled by means of the promotion of an official in Grade A 3. According to the applicant, an official in Grade A 2 who has been retired ought to be reassigned to a post for which he has the required skills in preference to an official in Grade A 3.

13. It should be noted in that connection that the Commission is vested with a wide discretionary power with regard to any decision to reassign officials to another post in the same grade. The officials whom the Commission has decided to retire do not enjoy any preference in that respect over the other officials who qualify for consideration. They must however have an adequate opportunity properly to safeguard their interests.

14. It is apparent from the documents before the Court that the Commission gave the applicant an adequate opportunity properly to safeguard his interests by bringing to his notice the existence of posts which become vacant, including that of director in Directorate General I and of director in Directorate General XVII, and that the applicant applied for the first of those two posts. In order to fill that post, the Commission considered and compared the various candidates and chose to appoint a person other than the applicant to the vacant post. That decision was therefore taken in accordance with the applicable rules of the Staff Regulations. As regards the post in Directorate General XVII, the applicant himself did not consider it appropriate to submit an application and therefore the Commission did not have to consider him.

15. Therefore, the applicant's alternative claim for annulment of the decision not to assign him to another post must also be rejected. For the same reason, there are no grounds for annulling the decisions of the Commission which have been adopted in the meantime in order to fill the vacant posts.

Costs

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

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

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

1 Dismisses the application;

2 Orders the parties to pay their own costs.

1 Bulletin of the European Communities 1980, No 3, point 2.3.3; Fourteenth General Report on the Activities of the Commission, point 29.