JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber)

5 June 1996

Case T-92/94

Rodolfo Mąslias

v

European Parliament

‛Officials — Earned income of spouse exceeding upper limit laid down by the Staff Regulations — Retroactive withdrawal of entitlement to household allowance — Recovery of undue payment’

Full text in Greek II-713

Application for:

annulment of the decision withdrawing retroactively the applicant's entitlement to household allowance and reclaiming overpayments.

Decision:

Partial annulment; remainder of the application dismissed.

Abstract of the Judgment

Mr Mąslias had been a reviser and principal translator in Grade LA 4 at the Parliament since 1 January 1987. Mrs Mąslias was appointed as a temporary member of staff at the Parliament in Step 3 of Grade C 4 from 1 May 1982 to 29 February 1984 and moved to Step 2 of Grade C 5 on 1 March 1984 before being appointed as an official in Step 2 of Grade C 3 from 1 February 1988 to 31 July 1988. She was subsequently appointed to Step 1 of Grade B 5 on 1 August 1988 and promoted to Step 1 of Grade B 4 on 1 October 1989.

Until 1 May 1982 the Parliament paid household allowance to the applicant, on the basis that Mrs Maslias's earned income before deduction of tax did not exceed the upper limit laid down in Article 1(3) of Annex VII to the Staff Regulations, namely the amount of the basic annual salary of an official in Step 3 of Grade C 3.

The Parliament withdrew the applicant's entitlement to household allowance from 1 May 1982 and reclaimed overpayments on the ground that the conditions in Article 1(3) were no longer satisfied, then restored his entitlement from 1 March 1984 since the income of his spouse in Step 2 of Grade C 5 was again less than the upper limit laid down by the Staff Regulations.

After Mrs Mąslias had advanced to Step 2 of Grade B 4 on 1 October 1991, the Parliament withdrew by a decision of 29 July 1992 the applicant's entitlement to household allowance and from January 1993 recovered overpayments by making deductions from his salary.

The applicant lodged a complaint and then brought an action (Case T-42/93) which was subsequently removed from the register. The Parliament then established that the overpayments dated back not to 1 October 1991 but to 1 August 1988, when Mrs Mąslias was appointed to Step 1 of Grade B 5, and annulled the first decision reclaiming overpayments amounting to LFR 156240, replacing it with a new decision of 21 June 1993 which withdrew the applicant's entitlement to household allowance from 1 August 1988 and reclaimed overpayments amounting to LFR 676800.

Overpayments from 1 August 1988

The Court notes that the concept of earned income covers all income received on a regular basis in return for the performance of duties. To compare Mrs Maslias's total gross earned income with the basic annual salary of an official in Step 3 of Grade C 3 it is sufficient, therefore, to add the components of her pay, that is to say the basic salary and the expatriation allowance that she received with effect from 1 August 1988 following her appointment to Step 1 of Grade B 5, and to deduct the social security contributions, taking no account of tax. The result shows that Mrs Maslias's earned income in Step 1 of Grade B 5 exceeds the upper income limit laid down in the Staff Regulations (paragraphs 25 and 26).

See: T-107/92 White v Commission [1994] ECRSC II-143. paras 19 and 42

Lawfulness of withdrawing entitlement to household allowance

The Court rejects as unfounded the plea that Article 1(3) of Annex VII to the Staff Regulations infringes the principle of equal treatment at work for men and women and, therefore, the plea that the principle of good administration was infringed (paragraphs 34 and 42).

Since household allowance was paid to the applicant as the spouse with the higher basic salary within the meaning of Article 1(4) of Annex VII, he cannot rely on the Court of Justice's case-law relating to indirect discrimination on the ground of sex. Moreover, he received household allowance not on his own account but in the interests of his household (paragraphs 35 and 36).

The Court also holds that if withdrawing entitlement to the allowance might have deterred Mrs Mąslias in her efforts to gain promotion, that could have been to her detriment only and she alone had a legal interest in bringing proceedings. Moreover, Mrs Mąslias's advancement to Category B, which led to the retroactive withdrawal of household allowance, opened up new career prospects for her superior to those in Category C. She therefore cannot be regarded as having being hindered in her efforts to gain promotion (paragraphs 37 and 38).

Lawfulness of reclaiming overpayments

Lawfulness of reclaiming the total sum ofLFR 676800

As the dispute falls within the second alternative provided for by Article 85 of the Staff Regulations, the Court will examine the circumstances in which the payment was made to determine whether the fact of overpayment to the applicant was patently such that he could not have been unaware of it (paragraph 59).

See: 71/72 KM v Council [1973] ECR 705, para. 11

Far from being exempted from the need to make any effort to reflect or check, officials are required to effect repayment where the error is one which does not escape the notice of an official exercising ordinary care, who is deemed to know the rules governing his salary. Account is taken in that regard of his ability to make the necessary checks. The factors taken into consideration for this purpose by the Court concern the official's level of responsibility, grade and seniority, the degree of clarity of the provisions of the Staff Regulations setting out the conditions for grant of the benefit at issue and the significance of the changes in his personal or family circumstances where payment of the sum in issue is linked to an assessment of such circumstances by the administrative authority (paragraphs 60 and 61).

See: 252/78 Broe v Commission [1979] ECR 2393, para. 13; 310/87 Stempels v Commission [1989] ECR 43, para. 11; T-34/89 and T-67/89 Costacurta v Commission [1990] ECR II-93, para. 39; T-124/89 Kormeier v Commission [1991] ECR II-125. para. 18;T-38/93 Stahlschmidt v Parliament [1994] ECRSC II-227. paras 19 and 21 ; T-545/93 Kschwenrit v Commission [1995] ECRSC II-565, para. 104

The income that Mrs Mąslias in fact received in Step 1 of Grade B 5 until 30 November 1989 is not very markedly different from the upper income limit laid down by the Staff Regulations, so that the condition relating to whether the ovetpayment was obvious is not satisfied up to that date (paragraphs 62 and 63).

On the other hand, the Court finds that during the period commencing on 1 December 1989 the applicant did not exercise the ordinary care to be expected from an official of his seniority and level of responsibility. Mrs Maslias's promotion on 1 October 1989, her exceeding more markedly from 1 December 1989 the upper income limit laid down in the Staff Regulations when she obtained the salary pertaining to Step 2 of Grade B 5, and the precedent from 1982 should, taken together, have prompted the applicant to regard his entitlement to household allowance as having become, at best, doubtful from 1 December 1989 (paragraphs 64 and 67).

Even if the applicant could not establish from that date the precise extent of the error committed, it was nevertheless for him to refer the matter to the administrative authority so that the appropriate checks could be made (paragraph 68).

See: White v Commission, cited above, para. 42

The applicant's argument that the relevant provisions are ambiguous must be rejected, since the Community judicature has accepted on several occasions that those provisions are sufficiently clear and unquestionable to enable a servant exercising ordinary care to realise that household allowance has been unduly paid (paragraph 69).

See: Broe v Commission, cited above; T-93/92 Burck v Commission [1994] II-201

Nor can the Court accept the argument that the applicant had forgotten the precedent from 1982, since he had been fully informed at that time, by a duly reasoned decision, of the withdrawal of entitlement to household allowance and the recovery of sums that had been unduly paid (paragraph 70).

The administrative authority's negligence and mistakes do not affect the application of Article 85 of the Staff Regulations, which in fact presupposes misconduct by that authority. In that regard it should be noted that it is not a question of whether or not the error was patent to the administrative authority, but whether it should have been so to the recipient. Also, the situation of an administrative authority responsible for the payment of thousands of salaries and allowances of all kinds cannot, even if it uses modern management methods, be compared to that of an official who has a personal interest in checking the payments made to him each month (paragraphs 71 and 72).

See: Broe v Commission, cited above, para. 11; Stahlschmidt v Parliament, cited above, para. 23

The applicant's argument as to his good faith must be rejected as invalid, since the phrase ‘patently such’ in Article 85 of the Staff Regulations means that recovery is due where the error is one which does not escape the notice of an official exercising ordinary care (paragraph 73).

See: Stempels v Commission, cited above, para. 10

The Court therefore rejects the plea alleging breach of Article 85 in so far as the contested decision requires recovery of undue payments in respect of the period subsequent to 30 November 1989 (paragraph 75).

Lawfulness of reclaiming the additional overpayments amounting to LFR 520560

The Court rejects the plea based on abuse of power and infringement of the rule that penalties cannot be increased, on the ground that officials are entitled to their pay only in accordance with the conditions laid down by the Staff Regulations and, by virtue of the principle of legality, the Parliament was required in principle to recover undue payments from the date on which they had first been made (paragraphs 82 and 83).

The Court finds that the applicant is unable to claim that the decision of 29 July 1992 should be upheld for the further reason that in Case T-42/93, an action he brought against that decision, he himself raised the question why the Parliament had applied Article 1(3) of Annex VII only when his spouse reached Step 2 of Grade B 4 and not earlier although the salaries corresponding to Step 1 of Grade B 5 and Step 1 of Grade B 4 were both higher than the salary of an official in Step 3 of Grade C 3 (paragraphs 85 and 86).

Operative part:

The decision of the Parliament of 21 June 1993 is annulled in so far as it requires recovery of sums unduly paid by way of household allowance in respect of the period from 1 August 1988 to 30 November 1989.

The remainder of the application is dismissed.