JUDGMENT OF THE CIVIL SERVICE TRIBUNAL

(First Chamber)

23 April 2008

Case F-103/05

**Stephen Pickering**

**v**

**Commission of the European Communities**

(Civil service – Officials – Remuneration – Correction coefficients – Transfer of part of remuneration out of the country of employment – Pensions – Default procedure – Temporal application of the Tribunal’s Rules of Procedure – Pay slips – Plea of illegality – Equal treatment of officials – Principle of protection of legitimate expectations, acquired rights and the duty to have regard for the interests of officials
– Obligation to state reasons)

**Application:**brought under Articles 236 EC and 152 EA, in which Mr Pickering seeks annulment of his pay slips for the months of December
2004 and January and February 2005, and of all subsequent pay slips, in so far as they apply the allegedly unlawful provisions
of Council Regulation (EC, Euratom) No 723/2004 of 22 March 2004 amending the Staff Regulations of Officials of the European
Communities and the Conditions of Employment of Other Servants of the European Communities (OJ L 124, p. 1), of Council Regulation
(EC, Euratom) No 856/2004 of 29 April 2004 fixing from 1 May 2004 the correction coefficients applying to the pensions of
officials and other servants of the European Communities (OJ L 161, p. 6), and of Council Regulation (EC, Euratom) No 31/2005
of 20 December 2004 adjusting, with effect from 1 July 2004, the transfers and pensions of officials and other servants of
the European Communities and the correction coefficients applied thereto (OJ 2005 L 8, p. 1), since those provisions, first,
reduce the part of the remuneration that may be transferred outside the country of employment and the correction coefficients
applicable to the transfer, second, reduce the correction coefficients applicable to pension rights acquired prior to 1 May
2004, introduce a new residence requirement for the application of those reduced correction coefficients and abolish the correction
coefficients for pension rights acquired from 1 May 2004; furthermore, the applicant seeks, in so far as is necessary, annulment
of the appointing authority’s decision of 4 July 2005 rejecting the complaint he had lodged against his pay slips.

**Held:**The action is dismissed. The parties are ordered to bear their own costs.

**Summary**

1.      *Procedure – Time-limits – Defence submitted out of time – Plea of inadmissibility submitted properly and in good time – Admissibility
– Default procedure not applied – Comments on the substance of the case submitted on the day of the hearing – Inadmissible*

*(Rules of Procedure of the Court of First Instance, Arts 48(2) and 122)*

2.      *Officials – Actions – Act adversely affecting an official – Definition – Salary statement*

*(Staff Regulations, Arts 90(2) and 91(1))*

3.      *Officials – Actions – Prior administrative complaint – Time-limits — Point at which they start to run*

*(Staff Regulations, Arts 90 and 91)*

4.      *Officials – Actions – Plea of illegality – Incidental nature*

*(Art. 241 EC; Council Regulations Nos 723/2004,  856/2004 and 31/2005)*

5.      *Officials – Actions – Interest in bringing proceedings*

6.      *Officials – Remuneration – Correction coefficients – Regular transfers outside country of employment*

*(Staff Regulations, Annex VII, Art. 17)*

7.      *Officials – Remuneration – Regular transfers outside country of employment – Correction coefficients*

*(Staff Regulations, Annex XIII, Art. 17)*

1.      Where a defendant submits a plea of inadmissibility properly and in good time, the fact that the defence was not lodged within
the time-limit prescribed for that purpose does not provide grounds for the application of the default procedure provided
for in Article 122 of the Rules of Procedure of the Court of First Instance. By virtue of submitting the plea of inadmissibility
the defendant cannot be regarded as having failed to respond to the application in the proper form and within the time prescribed.

However, comments on the substance of the action submitted by a defendant on the day of the hearing are not admissible. Where
no defence has been lodged during the written procedure within the time prescribed, the defendant’s oral submissions on the
substance of the action are tantamount to the submission of new pleas, which is prohibited by Article 48(2) of the Rules of
Procedure of the Court of First Instance; allowing an a contrario interpretation would amount to accepting that the defendant,
having raised a plea of inadmissibility by separate document, is not subsequently bound by the time-limit which the Court
sets for the lodging of his defence.

However, an intervener is fully entitled to submit arguments on the substance of the action in the course of both the written
and oral procedures. In the particular case of an application relying on the unlawfulness of regulations adopted by the intervener,
it would be contrary to the principles of the rights of the defence and of proper administration of justice if, for reasons
beyond its control and for which the defendant is responsible, the intervener, whose claims seek exactly the same outcome
as those of the defendant in his plea of inadmissibility, namely the dismissal of the action, were not allowed to submit arguments
on the substance of the action, and in particular observations intended to defend the lawfulness of the disputed regulations.

(see paras 49, 53-55)

See:

C-34/04 *Commission* v *Netherlands* [2007] ECR I‐1387, para. 49

T‐125/96 and T‐152/96 *Boehringer* v *Council and Commission* [1999] ECR II‐3427, para. 183

2.      A pay slip, by its nature and purpose, does not have the characteristics of an act adversely affecting an official within
the meaning of Articles 90(2) and 91(1) of the Staff Regulations, since it merely expresses in financial terms the effect
of earlier legal decisions concerning the official’s situation. Thus, while it is true that pay slips are commonly regarded
as acts adversely affecting an official in so far as they show that his financial rights have been adversely affected, in
reality the act which actually adversely affects the official is the decision by the appointing authority to reduce or abolish
a payment which the official received hitherto and which was shown on his pay slips.

Nevertheless, the pay slip remains very important for determining the official’s procedural rights as laid down in the Staff
Regulations. In particular, the forwarding to the official of his pay slip fulfils a dual function, one informing him of the
decision taken and one relating to time-limits, so that, provided the slip clearly shows the existence and scope of the decision
taken, its communication sets the time-limit running for challenging that decision.

(see paras 72, 75)

See:

262/80 *Andersen and Others* v *Parliament* [1984] ECR 195, para. 4

T-536/93 *Benzler* v *Commission* [1994] ECR-SC I‐A‐245 and II‐777, para. 15

F‐101/05 *Grünheid* v *Commission* [2006] ECR-SC I‐A‐1‐55 and II‐A‐1‐199, para. 33 and the case-law cited therein, and para. 42; F‐27/06 and F‐75/06 *Lofaro* v *Commission* [2007] ECR-SC I-A-1-0000 and II-A-1-0000, currently the subject of an appeal before the Court of First Instance, T‐293/07 P

3.      In cases where the adverse effect on the disputed financial entitlement takes the form of the abolition of a payment or a
reduction in its amount, applied every month and shown in all pay slips subsequent to the first in which that abolition or
reduction was shown, it is the receipt by the official of the first pay slip showing that abolition or reduction which alone
sets the time-limit for complaint running.

Where a number of pension statements or pay slips drawn up for successive periods are unlawful in the same way, an initial
complaint lodged only against the first disputed statement or slip and raising the relevant plea of illegality should normally
be enough to ensure that the applicant, if successful in the action he brings following the rejection of that complaint, also
receives financial satisfaction for the periods following that covered by the disputed statement or slip. That should, *a fortiori*, be the case if the applicant makes clear that he is not contesting the pension statement or pay slip as such, but the decision
affecting his rights, expressed in the statement or slip in question by the abolition of a payment or a reduction in its amount.

(see paras 76, 89)

See:

C-82/98 P *Kögler* v *Court of Justice* [2000] ECR I‐3855, para. 49

T-160/96 *Kögler* v *Court of Justice* [1998] ECR-SC I‐A‐15 and II‐35, para. 39

4.      Article 241 EC gives expression to a general principle conferring upon a party which is not entitled under Article 230 EC
to institute direct proceedings against an act of general application the right to challenge, for the purpose of obtaining
the annulment of a decision of direct and individual concern to it, the validity of acts of general application by which it
is affected without having been able to seek their annulment. However, Article 241 EC does not create an entitlement to take
action independently and may be relied on only as an incidental plea in an admissible action, rather than constituting the
subject of an action.

A plea of illegality raised in the course of an inadmissible action is thus inadmissible.

(see paras 94, 97)

See:

92/78 *Simmenthal* v *Commission* [1979] ECR 777, para. 39

T‐35/05, T‐61/05, T‐107/05, T‐108/05 and T‐139/05 *Agne-Dapper and Others* v *Commission and Others* [2006] ECR-SC II‐A‐2‐1497, para. 42 and the case-law cited therein

5.      An official who is still in active employment cannot establish a present, vested interest in obtaining a decision on the weighting
to be applied to his future retirement pension, for by reason of the condition concerning the choice of country of residence,
which can be determined only upon the cessation of the employment of the person concerned, the weighting cannot be fixed by
a decision taken in advance which immediately and directly affects the legal situation of the person concerned. Such a finding
also applies to a case where the complaints relate not to the weightings fixed, but to the weightings system itself.

(see para. 101)

See:

T-6/91 *Pfloeschner* v *Commission* [1992] ECR II‐141, para. 27

6.      In so far as an official receives his remuneration and de facto incurs the majority of his expenditure, on accommodation,
food and leisure in particular, in his country of employment, while simply transferring part of his remuneration to his Member
State of origin, that official may not be regarded as being in a comparable situation to that of an official posted to that
Member State, who receives his salary with the weighting for that Member State.

(see para. 109)

7.      The Community legislature is at liberty at any time to make such amendments to the Staff Regulations as it considers to be
consistent with the interests of the service and to adopt, for the future, staff regulations which are less favourable for
the officials concerned, provided that it fixes a sufficient transition period, and officials do not have any right to maintenance
of the Staff Regulations as they existed at the moment of their recruitment. Thus, while it is true that the new system for
transferring part of the remuneration is financially less favourable for officials than the system which existed before the
Staff Regulations were reformed, the fact remains that the legislature, which adopted transitional provisions set out in Article
17 of Annex XIII to the Staff Regulations covering the period from 1 May 2004 to 31 December 2008, was at liberty to amend
the Staff Regulations and to adopt provisions on the transfer of part of the remuneration which were less favourable for officials
than those under the previous version of the Staff Regulations.

(see paras 115-116)

See:

T-135/05 *Campoli* v *Commission* [2006] ECR-SC II‐A‐2‐1527, para. 85 and the case-law cited therein