JUDGMENT OF 5.7.1984 — CASE 115/83 OOMS v COMMISSION
In Case 115/83
THE COURT (Third Chamber) composed of: Y. Galmot, President of Chamber, U. Everling and C. Kakouris, Judges, Advocate general: G. F. Mancini Registrar: H. A. Rühi, Principal Administrator
gives the following
JUDGMENT
Facts and Issues
The facts of the case, the course of the procedure and the conclusions, submissions and arguments of the parties may be summarized as follows:
I — Facts and procedure
A — Legal background to the dispute
1. Provisions regarding special reimbursement of medical expenses
Article 72 (1) of the Staff Regulations provides that subject to rules to be drawn up by agreement between the institutions of the Communities, officials and their dependants “are insured against sickness” up to 80% of the expenditure incurred — a rate which is raised to 100% in the case of the serious illnesses set out in that provision and other illnesses recognized by the appointing authority as being of comparable seriousness.
According to Article 72 (3) :
“Where the total expenditure not reimbursed for any period of 12 months exceeds half the official's basic monthly salary or pension special reimbursement shall be allowed by the appointing authority, account being taken of the familiy circumstances of the person concerned, in the manner provided for in the rules referred to in paragraph (1).”
Article 8 of the Rules on Sickness Insurance supplements the foregoing provisions as follows:
“(1) When the expenses incurred are for treatment of the member or of a person covered by his insurance in a country where the cost of medical treatment is particularly high and the portion of expenses not reimbursed by the scheme places a heavy financial burden on the member, special reimbursement may be granted, on the basis of the opinion of the medical officer of the office responsible for settling claims, who shall assess the cost of the medical treatment, either by decision of the appointing authority of the institution to which the member belongs or by decision of that office if the requisite powers have been delegated to it by the said authority. (2) When the non-reimbursed portion of the expenses ... which are incurred by a member... exceeds during any 12-month period half the average basic monthly salary or pension or ... half the average allowance received during the said period, the special reimbursement provided for in Article 71 (3) of the Staff Regulations shall be determined as follows : The non-reimbursed portion of the actual expenses which is in excess of half the average basic monthly salary, pension or allowance shall be reimbursed at the following rates : 90% in the case of a member by. whose insurance no other person is covered; 100% in other cases. The office responsible for settling claims shall deliver an opinion on the application for special reimbursement on the basis of general criteria for determining whether the expenses incurred are excessive adopted by the Management Committee after consulting the Medical Council. The appointing authority shall take its decision in the light of the opinion of the office responsible for settling claims.”
2. Provisions of the Staff Regulations regarding remuneration and weighting
According to the third paragraph of Article 62, remuneration comprises basic salary, family allowances and other allowances.
Article 63 : “Officials' remuneration shall be expressed in Belgian francs. It shall be paid in the currency of the country in which the official performs his duties”
Article 64 : “An official's remuneration expressed in Belgian francs shall, after the compulsory deductions set out in the Staff Regulations or in any implementing regulations have been made, be weighted at a rate above, below or equal to 100%, depending on living conditions in the various places of employment.”
B — Origin and development of the dispute
Mr Ooms, a Netherlands national and an official of the Commission since 1967, occupies a B 2 post at Ispra.
On 27 May 1982, he sought special reimbursement, pursuant to Article 72 (3) of the Staff Regulations and Article 8 (2) of the Rules on Sickness Insurance, for the period from March 1980 to February 1981 and asked that any special reimbursement to which he might be entitled be calculated on the basis that the “basic monthly salary” referred to in Article 72 (3), which is used to determine the amount of that reimbursement, be understood as having to be adjusted by the weighting in force at the time, as provided for in Article 64 of the Staff Regulations.
By a letter addressed to Mr Ooms on 11 June 1982, the office responsible for settling claims at Ispra refused to take account of the weighting on the ground that Article 72 (3) of the Staff Regulations and the relevant rules refer exclusively to the official's “basic salary”. The applicant received the statement of settlement of his claim, calculated on 21 July according to the procedure set out above.
On 21 September 1982, Mr Ooms submitted a complaint pursuant to Article 90 (2) of the Staff Regulations, which was registered by the Commission on 28 September.
The Management Committee for the joint sickness insurance scheme, which had been consulted by the Commission, approved, on 1 December 1982, the decision of the office responsible for settling claims at Ispra. The Commission accepted that opinion and informed Mr Ooms by a letter of 9 March 1983, received by him on 15 March, that his complaint was rejected.
On 14 June 1983, Mr Ooms brought this action which was lodged at the Court Registry on 21 June 1983. The applicant requested that the language of the case be German.
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:
1) Declare unlawful and annul the defendant's decision contained in the letter of 25 June 1982 from the office responsible for settling claims at Ispra in conjunction with the statement of 21 July 1982 and the decision of 9 March 1983 in reply to the applicant's complaint, in so far as the decision did not use the weighting as the basis for the calculation of the special reimbursement under Article 72 (3) of the Staff Regulations in conjunction with Article 8 of the Rules on Sickness Insurance for Officials of the European Communities;
2) Declare that the applicant is entitled to a special reimbursement under Article 8 of the Rules on Sickness Insurance for Officials of the European Communities and that for the calculation thereof the weighting referred to in Article 64 of the Staff Regulations must be applied to his basic salary;
3) Declare that the defendant must adjust the applicant's account pursuant to the decision to be adopted under 2. above;
4) Order the defendant to pay the arrears owing on the basis of the fresh calculation;
5) Order the defendant to pay the costs.
The defendant contends that the Court should:
1) Dismiss the application as unfounded;
2) Order the applicant to pay the costs.
III — Submissions and arguments of the parties
The applicant relies on two submissions namely, infringement of the provisions of Article 71 (3) of the Staff Regulations and of Article 8 (2) of the Rules on Sickness Insurance, and breach of the principle of equality of treatment of officials.
First submission alleging infringement of the provisions of Article 72 (3) of the Staff Regulations and Article 8 (2) of the Rules on Sickness Insurance
In the applicants view, whilst Article 71 (3) of the Staff Regulations makes no express reference to weighting, it must be emphasized that the concept of “basic monthly salary” mentioned in that provision is a purely theoretical one, modified in practice for all officials by the weighting. In that connection, the applicant contends that in its judgment of 13 July 1978 (Case 114/77 Jacquemart v Commission [1978] ECR 1697), the Court declared, on the one hand, that the Commission's practice of applying a weighting rather than periodically adjusting the table of basic salaries must not adversely affect the pecuniary rights of officials and, on the other hand, that the weightings do not constitute an additional element of remuneration but rather a method of calculating salary and of giving geographical weighting to it depending on living conditions in the place of employment.
In the applicant's view, the provisions of the Staff Regulations and of the Rules on Sickness Insurance should be interpreted in the light of their purpose.
The applicant thus observes that in so far as reimbursements are, by virtue of those provisions, subject to an upper limit according to the type of care received and consequently, in so far as officials bear that portion of the expenses not covered by the insurance scheme, the purpose of the provisions at issue is to define the upper limit of the sacrifices likely to be imposed on each official. The applicant considers that the sickness insurance scheme is insurance against a loss of purchasing power due to medical expenses and that its purpose is to ensure that such losses remain limited. Thus, reimbursement of special expenses should be based upon the real income of each official, that is, the basic salary modified by the weighting referred to in Article 64 of the Staff Regulations. The real salary so obtained corresponds to the actual cost of living in the place of employment.
In reply to the Commission's contention that the expenses which officials must bear depend not on their own circumstances but on the amount of medical expenses incurred, the applicant observes that the upper limit of the amount to be borne varies for each individual not merely in accordance with the amount of the expenses incurred but also with the official's step, since the contributions paid vary in reality in accordance with salary.
The Commission's argument that the applicant's contention would require a considerable administrative effort is incorrect because the number of applications for special reimbursement is small and because the same weighting applies to all basic salaries paid in any given place of employment. Contrary to the Commission's contention, it is not the entire purchasing power of the official which must be taken into account but solely the basic salary, as weighted.
The applicant states in this connection that the expatriation allowance and the education allowance are compensation for expenses incurred and not remuneration. The same is true of family allowances, whose amount is determined in accordance with the social group to which the official belongs whereas the remuneration is proper to each individual.
Thus, the Commission's argument that the sickness insurance scheme, which provides for the payment of contributions without reference to the weightings, requires that only the basic salary within the meaning of Article 71 (3) be taken into account, is irrelevant. That argument can only lead to a doubling, by virtue of the special reimbursement scheme, of the discrimination between officials created by the system of contributions.
The Commission, in contrast to the teleological interpretation proposed by the applicant, suggests that the provisions concerning the sickness insurance scheme and special reimbursement be literally and systematically interpreted according to the so-called method of effectiveness, without any reference to the scale of remuneration of officials.
The Commission observes that neither Article 72 (3) of the Staff Regulations nor Article 8 (2) of the Rules on Sickness Insurance provides for weighting and both provisions refer exclusively to the concept of “basic monthly salary” set out in respect of each grade and step in the table contained in Article 66 of the Staff Regulations. The Commission emphasizes that, contrary to the applicant's contention, that amount is not, as such, affected by the weighting referred to in Article 64 of the Staff Regulations since the latter is applied to the official's remuneration which, according to Article 62 of the Staff Regulations, consists not only of the basic monthly salary but also of the family allowances and other allowances, including the expatriation allowance.
The Commission states that the sickness insurance scheme is based on the Belgian franc and functions in the same way regardless of the official's place of employment. The contributions of the institutions and the members are calculated, in accordance with Article 72 (1) of the Staff Regulations and Article 23 (2) of the Rules on Sickness Insurance, as a proportion of the basic salary provided for in Article 66 of the Staff Regulations and collected without any account being taken of the weighting. That is quite clear from the first paragraph of Article 64 of the Staff Regulations which provides that the weighting is to be applied only after deduction from the remuneration expressed in Belgian francs of inter alia the contribution to the sickness insurance scheme.
Unlike the weighting system, the sickness insurance scheme is intended to guarantee, not the equality of purchasing power of officials, regard being had to living conditions in the various places of employment, but rather the reimbursement of expenses actually incurred. Thus, the financial burden which officials are called upon to bear as a result of the upper limit placed on the reimbursement of medical expenses is exclusively but simultaneously dependent on the amount of the expenses incurred and the amount paid in contributions.
Thus the provisions at issue are not intended to define an upper limit for officials but rather to supplement structurally the amount to be reimbursed in respect of medical expenses actually incurred beyond the limits resulting from the maximum rates and upper limits provided for in the rules on sickness insurance.
The Commission considers that the Jacquemart judgment (Case 114/77, cited above), relied on by the applicant, bears no relation to this case. That case involved both pecuniary rights connected with the resignation of an official and dependent on his remuneration and the application of the weighting provided for in Article 65 (1) of the Staff Regulations which is intended to fix the level of the various components of the remuneration of officials allocated to the provisional seats of the institutions. This case on the other hand involves the possible application of the geographical weightings referred to in Article 64 of the Staff Regulations.
In the Commission's view, if the purpose of the rules was, as the applicant contends, to establish an upper limit, the sickness insurance scheme would take account not only of the basic monthly salary but also of the whole of the remuneration representing the official's purchasing power, which would be contrary to the existing provisions and machinery. The Commission considers that if the Community legislature had wished to take account of living conditions in the places of employment, it should have organized the entire system of maximum rates and upper limits in that way. However, the application of weighting to the upper limits in respect of reimbursement of medical expenses would be unfavourable to officials at Ispra, where the weighting applied is low, whilst medical expenses are high.
The Commission adds that where an official working in a country with a low weighting receives treatment in a country where the level of medical expenses is higher than in the place of employment (the level to which the upper limit of payment will, under the system proposed by the applicant, be adapted), he will have to bear a larger portion of the expenses than if he had received treatment in the place of employment. Thus the applicant's argument would lead to a restriction in the free choice of a doctor.
The Commission considers that the application of weighting in the context of Article 72 (3) of the Staff Regulations would presuppose a reform of the sickness insurance scheme and cannot result from an interpretation of the provisions at issue in the light of the principle of equality.
Second submission alleging breach of the principle of equality amongst officials
The applicant, relying on the judgment of 31 May 1979 (Case 156/78 Newth v Commission [1979] ECR 1941) in which the Court, in interpreting the provisions of the Staff Regulations, took account of the principle of equality amongst officials, considers that the exclusive reference to the basic salary in the context of Article 72 (3) amounts to recreating, in terms of net purchasing power, the inequality between officials, according to their place of employment, which it is the very purpose of Article 64 of the Staff Regulations to avoid.
The discrimination results from the fact that the Commission does not treat all officials in the same way as regards net purchasing power in the sense that the upper limit on reimbursement applies to all Community officials whilst the amounts which the officials themselves must pay vary according to their place of employment and the real cost of living.
The applicant emphasizes in this regard that, in the light of the weighting applicable in Italy, officials working in that country always suffer loss in comparison to officials based in Brussels.
The applicant emphasizes that it is precisely the fact that the special reimbursement is the same whilst salaries differ according to the place of employment which breaches the principle of equal treatment.
The Commission considers that the rules regarding reimbursement of medical expenses take account of the principle of equality of treatment in the sense that all officials of the same grade and step are entitled, in all the places of work of the Community, to a special reimbursement of the same amount in respect of the same amount of medical expenses. If, as a consequence, the portion of those expenses borne by the official reduces the remuneration of an official assigned to a country with a low weighting to a greater extent than in the case of an official working in Brussels, that is no more than the consequence of general and objective rules intended to avoid a situation in which officials are reimbursed, in respect of a given amount in medical expenses, amounts which vary from one place of employment to another.
In the Commission's view, the application of geographical weighting to the special reimbursement referred to in Article 72 (3) of the Staff Regulations would give rise to a double discrimination amongst officials.
In the first place, discrimination would result from the fact that reimbursement of medical expenses would depend on purchasing power only in the case of the special reimbursement and not in cases of general reimbursement of medical expenses whose size did not justify reimbursement pursuant to Article 71 (3) of the Staff Regulations. It was to eliminate that risk that the applicant proposed applying weighting to the upper limits of the general reimbursement scheme. The Commission emphasizes once again however that such a reform of the sickness insurance scheme cannot result from a mere interpretation of the provisions in force in the light of higher principles of law.
Secondly, the system proposed by the applicant would give rise to discrimination between officials receiving reimbursement pursuant to Article 72 (3) of the Staff Regulations. Supporting its arguments with numerical examples, the Commission states that to take the geographical weightings into account would mean that officials of the same grade, having incurred the same amount of medical expenses, would receive different amounts by way of reimbursement according to their place of employment. In the Commission's view, such inequalities are unjustified and contrary to the purpose of the joint sickness insurance scheme, which is intended to establish a uniform scheme amongst all officials and other employees and so to function that they receive the same amount in reimbursement in respect of the same amount of medical expenses regardless of their place of employment.
IV — Oral procedure
At the sitting on 12 April 1984, oral argument was presented by H.-J. Rüber, Rechtsanwalt, Cologne, on behalf of Marinus C. Ooms, and by Jörn Pipkom, acting as Agent, on behalf of the Commission of the European Communities.
The Advocate General delivered his opinion at the sitting on 30 May 1984.
Decision
1. By application lodged at the Court Registry on 14 June 1983, Mr Ooms, an official of the Joint Research Centre at Ispra, in Grade B 2, brought an action seeking: Annulment of the decisions of 25 June and 21 July 1982, confirmed by the Commission on 9 March 1983, by which the office responsible for settling claims at Ispra made a special reimbursement on the basis of Article 72 (3) of the Staff Regulations and Article 8 (2) of the Rules on Sickness Insurance of medical expenses incurred by the applicant but did not take account of the geographical weighting referred to in Article 64 of the Staff Regulations; An order to the Commission to pay the arrears owing to the applicant on the basis of the revised calculation of the special reimbursement.
2. It appears from the documents before the Court that the office responsible for settling claims at Ispra decided, on 25 June 1982, to calculate the special reimbursement of medical expenses sought by the applicant without applying to the “basic monthly salary”, which serves as a basis for that calculation pursuant to Article 71 (3) of the Staff Regulations, the weighting referred to in Article 64 thereof.
3. In a letter of 9 March 1983, the Commission rejected the complaint submitted by the applicant on 21 September 1982 and endorsed the opinion, dated 1 December 1982, of the Management Committee of the joint sickness insurance scheme, which the Commission had consulted and which had approved the decisions of the office responsible for settling claims at Ispra.
4. According to Article 72 (1) of the Staff Regulations, an official and his dependants “are insured against sickness” for up to 80% of the expenditure incurred subject to rules drawn up by agreement between the institutions of the Communities. The rate of 80% is raised to 100% in the cases of severe illness set out in that provision or recognized by the appointing authority as of comparable seriousness.
5. According to Article 72 (3) of the Staff Regulations :
“Where the total expenditure not reimbursed for any period of 12 months exceeds half the official's basic monthly salary or pension special reimbursement shall be allowed by the appointing authority, account being taken of the family circumstances of the person concerned, in the manner provided for in the rules referred to in paragraph (1).”
6. The abovementioned provisions were supplemented by the Rules on Sickness Insurance. Article 8 (2) of those rules provides that:
“When the non-reimbursed portion of the expenses ... which are incurred by a member ... exceeds during any 12-month period half the average basic monthly salary or pension or ... half the average allowance received during the said period, the special reimbursement provided for in Article 72 (3) of the Staff Regulations shall be determined as follows: The non-reimbursed portion of the actual expenses which is in excess of half the average basic monthly salary, pension or allowance shall be reimbursed at the following rates: 90% in the case of a member by whose insurance no other person is covered; 100% in other cases.”
7. Pursuant to the third paragraph of Article 62 of the Staff Regulations, on the other hand, remuneration comprises basic salary, family allowances and other allowances. According to Article 64 of the Staff Regulations :
“An official's remuneration expressed in Belgian francs shall, after the compulsory deductions set out in these Staff Regulations or in any implementing regulations have been made, be weighted at a rate above below or equal to 100%, depending on living conditions in the various places or employment.”
8. In support of his conclusions, the applicant contends that the fact that only the basic salary is taken into account, without any reference to the weighting provided for in Article 64 of the Staff Regulations, leads to a : failure to observe the provisions at issue, whose purpose is to define the upper limit of the burden which each official may have to bear and, consequently, to take account of his real purchasing power. That practice also breaches the principle of equality of treatment which it is the very purpose of Articles 64 and 65 of the Staff Regulations to uphold.
9. In the Commission's view, the fact that neither Article 72 (3) of the Staff Regulations nor Article 8 (2) of.the Rules.on Sickness Insurance provides for weighting may be explained by the fact that, unlike the system of weightings the sickness insurance scheme is intended to guarantee, not the equality of purchasing power of officials, regard being had to living conditions in the various places of employment, but rather the reimbursement of expenditure actually incurred. The principle of equality of treatment is upheld inasmuch as a Community officials in the same category, grade and step are entitled, in all the places of work of the Community, to a special reimbursement of the same amount in respect of the same amount of medical expenditure incurred.
10. The Commission points out that the contributions to the joint sickness insurance scheme are not subject to the weighting provided for in Article 64 of the Staff Regulations. Article 23 of the Rules on Sickness Insurance provides that the amount of those contributions is fixed at a certain proportion of the basic salaries set out in Article 66 of the Staff Regulations, which excludes any possibility of taking account, in calculating them, oi the weightings provided for in Article 64.
11. Consistent as it may seem at first sight, that scheme can none the less not be isolated from the purpose of the provisions of the Staff Regulations in which it is contained.
12. In that connection, the particular characteristics of the special reimbursements provided for in Article 71 (3) of the Staff Regulations, which distinguish them from the ordinary reimbursements referred to in Article /2 (1), must be emphasized.
13. Whilst, in the context of Article 71 (1), all medical expenditure incurred by the member entitles him to reimbursement of an amount determined by the application of the rates and upper limits fixed by the Staff Regulations, a special reimbursement under Article 71 (3) is granted only when that part oí the medical expenditure which is not reimbursed exceeds a certain proportion of the official's salary.
14. It is clear from the aforementioned provisions that the ordinary reimbursements provided for in Article 71 (1) are based on objective circumstances and in particular on the application of upper limits and rates o reimbursement fixed by the Staff Regulations and identical for all Community officials, whilst special reimbursement is based on circumstances which are peculiar to the official's own situation and which are related to the fact, according to the circumstances provided for in Article 8 of the Rules on Sickness Insurance, that the portion of expenses not reimbursed places a “heavy financial burden” on him.
15. It follows from the foregoing that to assess correctly the extent of the financial burden placed on an official who is seeking a special reimbursement, the living conditions of the place of his employment must be taken into account and consequently the special reimbursement provided tor in Article 71 (3) of the Staff Regulations must be calculated, not solely in accordance with the salary referred to in Article 66, but on the basis of the real salary adjusted by the weighting provided for in Article 64 whose purpose is precisely to take account of the living conditions in the place ot employment.
16. The Commission contends, however, that if the Community legislature had wished to take account of the living conditions in the various places of employment, it would have made arrangements accordingly in respect of the entire system of maximum rates and upper limits of reimbursement applicable to reimbursement under Article 72 (1).
17. That argument cannot be accepted in so far as it does not take account of the specific characteristics of the special reimbursements provided for in Article 72 (3) as compared to reimbursements under Article 72 (1).
18. Regard being had to the purpose and structure of the aforementioned provisions, the contested decision determining the amount of the special reimbursement due to Mr Ooms must be annulled, and there is no need to consider the other submission put forward. The Commission must therefore be ordered to pay the difference between the amount already remitted and that of the special reimbursement calculated on the basis of the basic monthly salary weighted in accordance with Article 64 of the Staff Regulations.
Costs
19. Under Article 69 (2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs. As the Commission has failed in its submissions it must be ordered to pay the costs.
On those grounds, THE COURT (Third Chamber) hereby:
1 Annuls the contested decision;
2 Orders the Commission to pay the difference between the amount already remitted and that of the special reimbursement calculated on the basis of the basic monthly salary weighted in accordance with Article 64 of the Staff Regulations;
3 Orders the Commission to pay the costs.