Report for the Hearing delivered in Case C-137/88
I — Summary of the facts and procedure
1. The applicants, who are Commission officials, contributed to a Belgian pension fund for employees and/or self-employed persons before entering the service of the Commission.
2. Under Article 11(2) of Annex VIII to the Staff Regulations of Officials of the European Communities:
‘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:
i) the actuarial equivalent of retirement pension rights acquired by him in the government administration, national or international organization or undertaking; or
ii) 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.’
3. By judgment of 20 October 1981 in Case 137/80 Commission v Belgium [1981] ECR 2393, the Court held that ‘the Kingdom of Belgium, by refusing to adopt the measures necessary for the transfer to the Community pension scheme of sums due to be repaid under the Belgian pension scheme or the actuarial equivalent of retirement pension rights acquired thereunder, as provided for by Article 11(2) of Annex VIII to the Staff Regulations of Officials of the European Communities, has failed to fulfil its obligations under the EEC Treaty’.
4. Faced with a refusal on the part of the Belgian authorities to give effect to the judgment in Case 137/80, the Commission brought a further action before the Court (Case 383/85) for a declaration that Belgium had not implemented that judgment and had thus failed to fulfil its obligations under Article 171 of the EEC Treaty.
5. A former official of the Court of Auditors, Mr Michel, brought an action before the national courts against the Belgian State in order to settle the matter of the transfer of his pension rights acquired under the national scheme. The Commission granted financial and technical assistance to that former official.
6. The Belgian State persisted in its failure to fulfil its obligations and more than 800 officials and pensioners submitted a request under Article 90(1) of the Staff Regulations at the beginning of 1987 with a view to obtaining from the Commission ‘financial and technical assistance to bring such proceedings before the Belgian courts and tribunals and, if necessary, before the Court of Justice of the European Communities, as are appropriate to settle the question of the transfer of pension rights ... acquired under a Belgian pension scheme’.
7. By decision of 13 July 1987, notified individually to each person concerned, the appointing authority rejected those requests. On 14 October 1987, the applicants submitted a complaint under Article 90(2) of the Staff Regulations against that rejection. The Commission rejected those complaints by express decision notified to the applicants on 4 May 1988.
8. In those circumstances, the applicants brought the present action against the decision of 13 July 1987 and the express decision of 4 May 1988.
II — Written procedure and conclusions of the parties
1. The application lodged by Mrs Schneemann and others was received at the Court Registry on 17 May 1988.
2. During the course of the procedure, 66 applicants discontinued their actions. The Court (Second Chamber), by order of 14 February 1989, removed the names of those applicants from the list of applicants in Case C-137/88.
3. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court (Second Chamber) decided to open the oral procedure without any preparatory inquiry. It also put a number of questions to the Commission and to the Kingdom of Belgium. The answers were received within the period prescribed.
4. The applicants claim that the Court should: (a) declare the action admissible and well founded; (b) consequently: (i) annul the administration's decision rejecting the applicants' request under Article 90(1) of the Staff Regulations that the Commission provide them with financial and technical assistance in the legal proceedings brought by them against the Belgian State in respect of the transfer of pension rights acquired under a Belgian retirement pension scheme; (ii) in so far as is necessary, annul the implied decision rejecting the complaint through official channels which the applicants lodged individually under Article 90(2) of the Staff Regulations; (c) order the defendant to provide the applicants with the financial and technical assistance sought in order to bring such proceedings before the Belgian courts and tribunals and if necessary before the Court of Justice as are appropriate to settle the question of the transfer of their pension rights from the Belgian scheme to the Community scheme; (d) order the defendant to pay the costs either under Article 69(2) of the Rules of Procedure or under the second subparagraph of Article 69(3) thereof, as well as the expenses necessarily incurred in connection with the proceedings and, in particular, the costs relating to the address for service, travel and subsistence expenses and the remuneration of a lawyer under Article 73(b) of those rules.
5. The Commission, the defendant, claims that the Court should: (a) declare the action unfounded; (b) make an appropriate order as to costs.
III — Submissions and arguments of the parties
The applicants make the following two submissions in support of their action:
i) breach by the Commission of its duty to assist officials as provided for in Article 24 of the Staff Regulations;
ii) breach by the Commission of the general principle of equality of treatment as between officials.
The first submission: infringement of Article 24 of the Staff Regulations
1. The applicants claim that the conditions for the application of Article 24 of the Staff Regulations are satisfied. They have suffered ‘by reason of [their] position or duties’ a flagrant breach by the Belgian State of the rights conferred on them by Article 11(2) of Annex VIII to the Staff Regulations. They refer to the grounds of the judgment of the Court in Case 137/80, cited above, which upholds the existence of subjective rights vested in officials by virtue of that provision and the corresponding obligation of all Member States to take the necessary measures to give effect thereto. The flagrant infringement of which they are the victims is sufficient to establish their direct and immediate interest in ensuring that the Belgian State complies with the requirements of the Staff Regulations.
2. The applicants maintain that the Belgian State's persistent failure to fulfil its obligations — despite a first judgment against it on 20 October 1981 and the commencement of fresh proceedings against it under Article 169 of the EEC Treaty in view of its failure to comply with that judgment, and notwithstanding all the approaches made by the Commission out of court — shows that only an enforceable decision obtained from the national courts will be capable of bringing about the transfer of pension rights, thus restoring legality. The action undertaken by the Commission over a period of more than 19 years (since the adoption of the general implementing provisions for Article 11(2) of Annex VIII to the Staff Regulations) has proved wholly ineffective. The commencement of proceedings before a Belgian court will enable the applicants to enforce their rights.
3. Relying on the theory of direct effect, the applicants argue that it is the power and the duty of the Belgian courts to apply the Staff Regulations. The Belgian courts, hearing an action for the application of Article 11(2) of Annex VIII to the Staff Regulations, could not be frustrated in the discharge of their duties by inaction on the part of the legislature. In support of their argument, the applicants emphasized the powers enjoyed by the courts over the various national authorities called upon to assist in implementing that provision. In the first place, the Belgian courts are under an obligation to order the national pensions authorities concerned to pay to the Communities either the actuarial equivalent of their pension rights or the sums due to be repaid from the Belgian scheme, if necessary giving effect to that order by the imposition of a periodic penalty payment. Failure on the part of the agents of the national pension authorities to comply with the Community rules causes them to incur personal liability which may be enforced against their property. Moreover, as private persons those agents enjoy no immunity from prosecution. In the second place, in so far as the authorities' inaction hindering the implementation of the Community provision is attributable to the legislature, the applicants refer to the judgment of 15 January 1976 (De Wilde v État belge, reported in the Journal des tribunaux, 1978, p. 328) in which the Brussels tribunal de première instance held that the legislature was guilty of perpetuating a situation which was contrary to international law (the Human Rights Convention). That the legislature is responsible for complying with the Community provisions has been confirmed by the judgment of 20 October 1981, cited above. Finally, the applicants allege essentially that because of the process by which laws are prepared in Belgium the State's infringement is not attributable exclusively to the legislature but also derives from inaction on the part of the regulatory authorities and the administration. Under Belgian law it is possible for the administration to be ordered to repair the damage caused, and to have periodical penalty payments imposed on it. As regards the obstacle of the Belgian State's immunity from prosecution, the juge des saisies, Brussels, has acknowledged on several occasions that garnishee orders may be made in order to obtain payment from the State, and the Court of Justice held by implication, in its order of 17 June 1987, that a garnishee order served on the Commission to obtain a payment from the Belgian State was lawful (Case 1/87 SA Universe Tanksbip v Commission [1987] ECR 2807).
4. The applicants also claim that they have an interest in immediately bringing an action before the Belgian courts, to ensure that their rights do not become time-barred. In that connection they refer to the judgment of 2 February 1988 in Case 24/86 Blaizot [1988] ECR 379.
5. The applicants maintain that the immediacy of their interest does not depend on the proximity of the official retirement age, as is apparent from Articles 9, 10 and 11(1) of Annex VIII to the Staff Regulations.
6. The defendant states by way of preliminary that the nature and scope of the duty to assist officials are such that it constitutes an obligation to use all due diligence, not an obligation to achieve a specific result. In the present case the desired result, namely the adoption of a formal law transferring previously acquired pension rights to the European Communities, is clearly not within the powers of the Commission. The defendant distinguishes the concept of assistance from the civil law concept of solidarity and concludes that the obligation incumbent upon the Commission cannot be equivalent to that incumbent upon Belgium. Moreover, the choice of the ‘appropriate’ measures to take in order to discharge its duty towards officials is a matter entirely in the discretion of the Commission, as the Court has consistently held (judgments of 18 October 1976 in Case 128/75 M. N. v Commission [1976] ECR 1567, and of 11 July 1974 in Case 53/72 Guillot v Commission [1974] ECR 791).
7. The Commission then lists the action it has taken vis-à-vis the Belgian authorities — principally on the basis of Article 169 of the EEC Treaty — and, pursuant to Article 24 of the Staff Regulations, in the form of technical and financial assistance in relation to an individual action brought by a former official before the Belgian courts. Despite the persistent inaction of the Belgian State, those efforts have not been in vain, as is evidenced by the text of a draft bill ‘organisant le transfert des droits à pension en faveur des fonctionnaires en service auprès d'une institution de droit international public’ (laying down arrangements for the transfer of pension rights of officials in service in an institution set up under public international law). That bill takes account of the Commission's observations concerning a first draft. Moreover, the Commission observes that it has, at the same time, pursued its mission as ‘guardian of the Treaties’ under Article 155 of the EEC Treaty.
8. The Commission denies that the mere obtaining of an enforceable order from the national courts is capable of legalizing the position by allowing pension rights acquired under the national scheme to be transferred to the Communities. In that regard, the Commission refers in the first place to the ‘reasonable limits’ set upon its duty towards officials in previous decisions of the Court (for example, judgments of 16 March 1978 in Case 115/76 Leonardini v Commission [1978] ECR 735, and of 9 November 1978 in Case 140/77 Verhaff v Commission [1978] ECR 2117) and contends that in this case it was reasonable for it to take the view that it was unnecessary to give its backing for new individual actions — particularly in view of the fact that the administration had already provided assistance for the action brought by Mr Michel. The Commission then states that the Belgian State is required as of now, by virtue of Article 171 of the EEC Treaty, to take the measures necessary to expunge the infringement established in the judgment in Case 137/80, cited above.
9. Even if, as the Court has stated, a judgment establishing an infringement of the Treaty may provide the basis for liability on the part of a Member State under its own system, in particular towards individuals (judgment of 7 February 1973 in Case 39/72 Commission v Italy [1973] ECR 101), there are grounds for doubting the efficacy of a finding under Belgian law that the Belgian authorities are guilty of inaction. The directly applicable provisions of the Staff Regulations are not ‘self-sufficient’, for which reason it is necessary to adopt implementing measures and it is impossible for the pension authorities and the administration to take the place of the legislature, the only authority with powers to lay down the measures necessary for the transfer of pension rights. Moreover, as regards the liability of the legislature, the judgment of 15 January 1976, cited by the applicants, remains the only one of its kind. The Belgian courts' powers to issue mandatory and prohibitory injunctions to the Belgian authorities, backed if necessary by a penalty, does not apply to the legislature. Furthermore, a judicial decision addressed to a public authority cannot be enforced cocrcively.
10. The defendant then rejects the argument based on the judgment of 2 February 1988 in Case 24/86 Blaizot, cited above, pointing out that the judgment of 20 October 1981 in Case 137/80 Commission v Belgium, cited above, determines a legal situation ab origine which is wholly retroactive as regards the Belgian State.
11. Finally, the Commission contends that it is necessary, in the event of the Court's nevertheless upholding the action, to verify the existence of specific damage of a substantial nature, having regard to the age of the applicants.
The second allegation: infringement of the principle of equality as between officials
1. The applicants consider that the Commission would be in breach of the general principle of equality of treatment as between officials if it did not grant them the assistance which it granted to Mr Michel for his action before the Belgian courts.
2. The Commission contends that Mr Michel's situation in 1985, when he applied for assistance, was different from that of the applicants in 1987. The fact that the administration is already giving financial assistance to a former official for an action against the Belgian State before the Belgian courts is attributable to the desire to increase the pressure brought to bear on the national authorities. That fact makes the institution by other officials of fresh proceedings having the same subject-matter entirely otiose. This difference between Mr Michel's situation and that of the applicants accounts for the Commission's refusal to accede to the applicants' request.
IV — Replies to the questions put by the Court
1. The Court (Second Chamber) put the following question to the Kingdom of Belgium and the Commission:
‘Can the calculation methods laid down in Belgium for the transfer of rights from one Belgian pension scheme to another Belgian pension scheme be applied — pending the entry into force of the legislation now in preparation — to the transfer of pension rights to the Communities, either by the pension authorities or by the courts which could thus calculate the amounts to be paid on the basis of that of the acquired rights?’
2. The Kingdom of Belgium replied as follows:
‘In view of the staggering of transfers of pension rights and the considerable difference between the total amount thus due and that provided for by the Belgian laws and regulations now in force, the latter cannot be applied by the various pension authorities. The Belgian Government cannot express a view as to what attitude would be taken by the Belgian courts regarding this problem.’
3. The Commission replied as follows:
‘To the Commission's knowledge, there is, under Belgian legislation, only one case of the transfer of pension rights acquired under one scheme to another national scheme, namely that governed by the Law of 5 August 1968 establishing certain relations between pension schemes in the public sector and those in the private sector (Moniteur belge, 5 August 1968).
In general,
i) in the case of the transfer to the civil service of a worker previously affiliated to the general scheme for employees, the institutions which manage the latter scheme are obliged to pay to the institution which manages survivorship pensions in the public sector the mathematical reserves of the pensions and dues and the contributions referred to in Article 1 of the said law;
ii) conversely, when a former civil servant loses his rights to a retirement pension, he is deemed to have been subject to the pension scheme for employees “throughout the duration of his paid service qualifying for retirement pension purposes in the scheme by which he was covered”.
No transfer of pension rights is provided for in the event of a change of employment within the private sector: machinery exists for coordination, within the general pension scheme applicable to employees, of the rules for calculating pensions, which may vary according to whether the worker was a clerk, a seaman or a miner, (see Royal Decree No 50 of 24 October 1967, in particular Article 10), but there is no provision for any transfer of rights. Moreover, in the case of completion of insurance periods under the employees' scheme and under the self-employed workers' scheme, pension rights will be acquired and paid under each of the schemes without any transfer of rights.
For the reasons set out in the Commission's submissions (defence, pp. 9 and 10, rejoinder, p. 4), it cannot be considered with any certainty whatsoever that a Belgian court could, in the stead of the legislature, take specific measures to ensure the exercise of the option granted to officials to have the rights acquired under the national scheme transferred to the Community pension scheme by analogous application of the Law of 5 August 1968.
Furthermore, a simple comparison of the latter provisions and those contained in the draft bill laying down procedures for transferring rights, annexed to the Commission's rejoinder, shows that it is impossible to find a basis in the 1968 Law for the effective transfer of rights.’
4. The Court (Second Chamber) then made the following request to the Kingdom of Belgium:
‘The Kingdom of Belgium is requested to inform the Court as to the state of advancement of the legislative process with respect to the text of the draft law laying down arrangements for the transfer of pension rights for the benefit of officials serving in an institution governed by public international law.’
5. The Kingdom of Belgium replied as follows:
‘The legislation in course of preparation which is to govern the transfer of Belgian pension rights to the Communities will be applicable:
1) to retirement and survivors' pensions payable out of central funds or by any of the authorities or bodies to which the Law of 14 April 1965 establishing certain relations between the various pension schemes in the public sector is applicable;
2) to retirement pensions granted to persons who, in respect of their occupational activity, have been subject to a pension scheme of a public body not mentioned in paragraph 1, and to survivors' pensions granted to the beneficiaries of such persons;
3) to retirement and survivors' pensions payable by the pension scheme for employed persons;
4) to old-age and widows' pensions granted under Chapter 1 of the Law of 28 May 1971 unifying and harmonizing capitalization schemes set up under laws relating to old-age insurance and insurance against premature death;
5) to retirement and survivors' benefits provided for by law paid by the Office de sécurité sociale d'outre-mer.
The said pension schemes differ fundamentally from each other regarding the constitution, determination and financing of rights and regarding possibilities of transferring rights under one Belgian pension scheme to another Belgian pension scheme. Depending on the specific features of each of those schemes, such transfer relates either to the mathematical reserves of the benefits or to the amount of the employees' and employers' contributions to the scheme concerned.
Those particularities represented a considerable obstacle in drawing up the draft bill, on the one hand because they are incompatible with Article 11 of Annex VIII to the Staff Regulations of Officials of the European Communities and, on the other, because the Commission asked that the Belgian legislation should provide for a single and uniform system for the transfer of rights from all the Belgian schemes concerned.
For that reason it was agreed to transfer periodically the arrears of benefits calculated according to the number of periods qualifying for that purpose.
Several meetings between officials representing the Commission and representatives of the Belgian Minister for Pensions have been devoted to consideration of the problems and definition of the principles on the basis of which a new draft law should be drawn up.
The said draft bill, a single bill for all the Belgian pension schemes concerned, has been examined by the competent Belgian administrative authorities.
On the basis of the remarks and suggestions made by those authorities, it proved necessary to abandon the idea of a single text applicable to all the schemes and instead to draft special provisions for each of them, in order to avoid differences of interpretation resulting from the use of terminology not consonant with the terminology of the applicable Belgian legislation.
The adaptation of those legislative texts, which of course will not depart from the principle of a single transfer system, is at present under way.
It is envisaged that the system will come into operation on 1 January 1990.’
6. The Court (Second Chamber) also put the following question to the Commission:
‘What progress has been made in Mr Michel's action against the Belgian authorities concerning the transfer to the Communities of retirement pension rights acquired under national law?’
7. The Commission replied as follows: ‘According to information obtained from Mr J.-N. Louis, Counsel for the applicants and also for Mr Michel, the parties to the latter action are waiting for a hearing to be set down.’
G. F. Mancini
Judge-Rapporteur
1 Language of the case: French.