JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber)

15 September 1998

Case T-3/96

Roland Haas and Others

v

Commission of the European Communities

‛Officials — Proportion of remuneration transferred — Weighting — Adjustment of capital sum — Retroactive effect’

Full text in French II-1395

Application for:

an order directing the Commission to pay the additional remuneration resulting from applying, to the part of the applicants' remuneration transferred in German marks during the period from 1 October 1990 to 31 December 1994, a weighting for Germany calculated on the basis of the cost of living in Berlin, together with default interest at the rate of 10% per annum and, in so far as is necessary, annulment of the Commission decision of 9 March 1995 rejecting the applicants' claim for that additional remuneration.

Decision:

Application dismissed.

Abstract of the Judgment

Pursuant to Artide 17 of Annex VII to the Staff Regulations, the applicants, who are Commission officials employed in Luxembourg, had part of their remuneration transferred to Germany in German marks over various periods falling between 1 October 1990 and 31 December 1994. By virtue of Article 17(3), amounts to be transferred are multiplied ‘by a coefficient [reflecting] the difference between [the weighting for the country in whose currency the amount is transferred and] the weighting for the country in which the official is employed’. The third paragraph of Article 6 of the Rules laying down the procedure for the transfer of part of an official's emoluments (the Rules governing transfers) provides:

‘A backdated increase in remuneration may not be used to backdate an alteration in the amounts transferred. Changes in exchange rates or weightings as referred to in Article 17(3) of Annex VII to the Staff Regulations shall not have retroactive effect on the exchange value of the amounts transferred. ’

Under Annex XI to the Staff Regulations, national weightings are established on the basis of the cost of living in the capital of the Member State concerned. In the wake of reunification, Berlin became Germany's capital in October 1990.

In Case T-536/93 Bender v Commission [1994] ECR-SC II-777 and Case T-64/92 Chavane de Dalmassy and Others v Commission [1994] ECR-SC II-723, the Court of First Instance declared that two provisions were unlawful in so far as they fixed a provisional weighting for Germany calculated on the basis of the cost of living in Bonn. The provisions in question were Article 6(2) of Council Regulation (EEC, Euratom, ECSC) No 3761/92 of 21 December 1992 (OJ 1992 L 383, p. 1) and Article 6(2) of Council Regulation (ECSC, EEC, Euratom) No 3834/91 of 19 December 1991 (OJ 1991 L 361, p. 13; rectification published in OJ 1992 L 10, p. 56), adjusting with effect, respectively, from 1 July 1992 and 1 July 1991 the remuneration and pensions of officials and other servants of the European Communities and the weightings applied thereto. In the Court's view, they constituted an unlawful departure from the principle stated in Annex XI to the Staff Regulations that the weighting for each Member State should be fixed by reference to the cost of living in its capital.

In December 1994, following those judgments, the Commission submitted to the Council two proposals for regulations: one concerned the annual adjustment of remuneration, while the other sought to replace, with retroactive effect, the provisional weightings for Germany in force since 1990.

The Council did not adopt any regulation, on the basis of the latter proposal, adjusting the weighting for Germany with retroactive effect from October 1990.

On 19 December 1994, however, the Council adopted — on the basis of the first proposal — Regulation (ECSC, EEC, Euratom) No 3161/94 (OJ 1994 L 335, p. 1), Article 6( 1 ) of which fixed a weighting for Germany calculated on the basis of the cost of living in Berlin.

When establishing the applicants' December 1994 pay slips, relating to the period between 1 July 1994 and 31 December 1994, the Commission applied Regulation No 3161/94.

The applicants maintain, however, that the Commission should have applied to the amounts transferred in German marks the weighting calculated on the basis of the cost of living in Berlin with effect from October 1990. Between 3 February 1995 and 20 February 1995, they submitted requests to the appointing authority claiming that the Commission should revise its calculations on the basis of that weighting and pay them the difference. Those requests were rejected, as were the related complaints submitted subsequently.

Substance

The plea, that the third paragraph of Article 6 of the Rules governing transfers is inapplicable

By virtue of the principle of the hierarchy of legal rules, the annual regulations adjusting remuneration, pensions and weightings cannot depart from the Rules governing transfers, which are an integral part of the Staff Regulations. In so far as those annual regulations concern transfers of remuneration, they merely implement the general rules in the Staff Regulations laying down detailed arrangements for transfers.

Since the third paragraph of Article 6 of those Rules wholly precludes the backdating of alterations in the amounts transferred as a result of retroactive changes in weightings, the fact that the weightings fixed by the regulations preceding Regulation No 3161/94 are provisional is irrelevant (paragraphs 39 and 40).

See: Chavane de Dalmassy and Others v Commission, cited above, para. 52

That plea must therefore be rejected (paragraph 41).

The three pleas alleging in essence that Regulation No 3161/94 is unlawful

The third paragraph of Article 6 of the Rules governing transfers wholly precludes the backdating of alterations in the amounts transferred. Accordingly, even supposing that the Council had made Regulation No 3161/94 retroactively effective from 1 January 1990, that could not bring about the backdated alteration of the amounts transferred by the applicants (paragraph 43).

Consequently, the first three pleas in law are ineffective (paragraph 44).

The plea alleging breach of the duty to have due regard for the interests of officials and to provide assistance

The duty to have due regard for the welfare of officials entails that, in all assessments concerning one or more of its officials, the institution concerned must take into account not only the interests of the service but also those of the officials concerned (paragraph 52).

See: T-80/92 Turnerv Commission [1993] ECR II-1465, para. 77; C-298/93 P Klinke v Court of Justice [1994] ECR I-3009, para. 38; T-44/93 Saby v Commission [1995] ECR-SC II-541, para. 47

However, in view of the broad discretion enjoyed by the institutions in evaluating the interests of the service, review by the Community judicature must be confined to determining whether the institution concerned exercised its discretion in a manifestly incorrect manner (paragraph 53).

See: T-39/93 and T-553/93 Baltsavias v Commission [1995] ECR-SC II-695, para. 59

In the present case, the applicants failed to show that the Commission committed a manifest error of assessment (paragraph 55).

As regards the argument that, by not bringing before the Community judicature the issue of the legality of Regulation No 3161/94 and the question of the Council's decision not to act on the second amendment proposal, the Commission failed in its duty to have due regard for the welfare of officials and to provide them with assistance, it should be noted that the adoption of a regulation adjusting the weighting for Germany with retroactive effect from 1 January 1990 could not have brought about any alteration in amounts already transferred. The argument cannot therefore be sustained (paragraph 56).

In any event, having regard to the broad discretion enjoyed by the Community institutions in their choice of measures and means to discharge their duty to have due regard for the welfare of officials and to provide them with assistance, an individual cannot require the Commission to bring an action for failure to act or proceedings for annulment. If it were otherwise, the Commission's discretion would be compromised (paragraph 57).

See: T-575/93 Koelman v Commission [1996] ECR II-1, para. 71; C-59/96P Koelman v Commission [1997] ECR I-4809

The plea in law must therefore be rejected (paragraph 59).

Operative part:

The application is dismissed.