Report for the Hearing delivered in Case 211/87
I — Facts and procedure
1. Legal background to the dispute
Under Article 4 (1) (a) of Annex VII to the Staff Regulations, an expatriation allowance is to be paid to officials who are not and have never been nationals of the State in whose territory the place where they are employed is situated, and who during the five years ending six months before they entered the service did not habitually reside or carry on their main occupation within the European territory of that State. For the purposes of that provision, circumstances arising from work done for another State or for an international organization are not be taken into account.
Article 5 (1) of the said Annex VII provides that an installation allowance is to be paid to an official who qualifies for expatriation allowance or who furnishes evidence of having been obliged to change his residence in order to comply with Article 20 of the Staff Regulations (residence at place of employment). Under Article 5 (3) the installation allowance is to be paid on production of documents establishing the fact that the official has settled at the place where he is employed.
2. Background to the dispute
Vicente Nunez, who was born in Spain in 1953 and is a Spanish national, has lived in Belgium since 1961. He received both his secondary education (1967 to 1973) and his higher education (1977 to 1982) in Brussels. From August 1973 to February 1976 he worked as an executive secretary for an employer in Brussels. On 23 February 1976 he was taken on by the Spanish Embassy in Belgium under an employment contract. In September 1980 he was appointed as an Official for life' on secondment to the Embassy in Belgium. Since 1 October 1986 he has worked as an official at the Commission in Brussels.
By letter of 16 December 1986 the Head of the Commission's Division for Administrative Rights and Remuneration notified Mr Nunez that he was not entitled to expatriation allowance or, as a result, to an installation allowance. The Head of Division considered in particular that the reference period referred to in Article 4 (1) of Annex VII to the Staff Regulations should go back to 23 February 1971, that is to say five years before he was taken into the employment of the Spanish Embassy. Mr Nunez had lived in the State of the place where he was employed within the meaning of Article 4 (1) during that period, and indeed well before February 1971 and therefore did not satisfy the conditions laid down in that article.
Mr Nuñez lodged a complaint against that decision, which the Commission rejected on 21 May 1987. The decision rejecting the complaint was notified to Mr Nuñez by letter dated 5 June 1987. On 9 July 1987 he brought this action.
3. Procedure
The application was received at the Court Registry on 9 July 1987.
Upon hearing the Report of the Judge-Rapporteur and the views of the Advocate General the Court (Fourth Chamber) decided to open the oral procedure without any preparatory inquiry.
II — Conclusions of the parties
The applicant, Vicente Nuñez, claims that the Court should:
Declare the application to be admissible and well founded;
Annul the Commission decision notified by memorandum of 16 December 1986 refusing to grant the applicant expatriation allowance and an installation allowance;
Annul the Commission decision notified by letter of 5 June 1987 rejecting the applicant's complaint lodged on 4 February 1987;
Declare that the applicant is entitled to expatriation allowance in Brussels and to an installation allowance;
Order the Commission to pay the outstanding monthly instalments of the expatriation allowance, less the monthly instalments paid in respect of foreign residence allowance, together with default interest on the outstanding payments at the rate of 8% per annum calculated from each due date until the date of payment;
Order the Commission to pay installation allowance together with default interest at the rate of 8% per annum calculated from 4 February 1987 until the date of payment;
Order the Commission to pay the costs.
The Commission claims that the Court should:
Dismiss the application as unfounded;
Make an appropriate order as to costs.
III — Submission and arguments of the parties
1. Expatriation allowance
The applicant argues that the Commission decisions infringe Articles 62 and 69 of the Staff Regulations and, in particular, Article 4 (1) of Annex VII to the Staff Regulations.
In essence, he maintains that Article 4 (1) (a) of Annex VII is unequivocal; the reference period is five years ending six months before the official entered the service. In his case, the period was from 1 April 1981 to 31 March 1986. Although he was in Brussels working for the Spanish Embassy during that period, his residence in Brussels during the reference period should be regarded as non-residence by virtue of the said Article 4 (1) (a), the last sentence of which provides that circumstances arising from work done for another State or for an international organization are not to be taken into account. Consequently, the applicant considers himself to be entitled to expatriation allowance.
The applicant further argues that the last sentence of Article 4 (1) (a) is specifically intended to take account of the fact that circumstances arising from work done for another State or for an international organization are not such as to create a lasting tie with the State of the place of employment. He points out that when he was working at the Spanish Embassy in Brussels he might have been recalled to Spain or transferred elsewhere at any time; he received the expatration allowance paid by the Spanish State; the Belgian authorities granted him all the privileges and immunities enjoyed by accredited diplomats in a foreign country; and his official residence was Madrid. Consequently, he had severed his previous tie with the country of employment and was effectively expatriated during the period when he was employed at the Embassy.
Lastly, the applicant points out that if the reference period taken were to be from 23 February 1971 to 22 February 1976 a large part of it would consist of time when he was a minor and could therefore not be regarded as voluntarily residing in Belgium.
The Commission argues that the exception set out in the last sentence of Article 4 (1) (a) must be interpreted as meaning that a period in the employment of another State or of an international organization is ‘neutralized’ or, in other words, that it cannot be taken into account. In this case the reference period — the five relevant years — should be shifted back in time. If it turns out that the official lived in that period in the country of the place where he is employed he cannot be regarded as expatriated. That was precisely the case here.
In addition, the Commission contends that the exception provided for in Article 4 presupposes that simply working for another State or for an international organization does not create a lasting tie with one's country of employment. However, it would be paradoxical to take the view that working for another State or for an international organization severed a tie previously formed with the country of employment.
2. Installation allowance
The applicant maintains that according to Article 5 (1) of Annex VII a person who qualifies for expatriation allowance is automatically entitled to an installation allowance. He claims that he so qualifies and is therefore entitled to an installation allowance.
The Commission argues that even if the applicant qualified for expatriation allowance he would not be entitled to claim an installation allowance. He incurred no installation expenses when he took up his post since he has lived at the same address in Brussels since 1978.
T. Koopmans
Judge-Rapporteur
1 Language of the Case: French.