JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber)

12 December 1996

Case T-33/95

Maria Lidia Lozano Palacios

v

Commission of the European Communities

‛Officials — Former national expert on secondment — Daily subsistence allowance — Installation allowance — Reimbursement of removal expenses — Place of recruitment’

Full text in French II-1535

Application for:

annulment of the Commission's decision of 12 April 1994 determining the applicant's place of recruitment as Brussels and refusing to grant her the installation allowance, reimbursement of her removal expenses and the daily subsistence allowance; and for an order that the Commission should pay those allowances.

Decision:

Partial annulment.

Abstract of the Judgment

The applicant, formerly an official at the Spanish Ministry of Social Affairs on secondment to the Commission in Brussels as a national expert, was appointed as a probationary official at the Commission and posted to Brussels.

While on secondment the applicant continued to be paid by her employer and to discharge her fiscal obligations in Spain. Pursuant to the rules applicable to national experts on secondment, she was required to reside at her place of employment or at no greater distance therefrom than was compatible with the proper performance of her duties.

While on secondment the applicant lived in Brussels. She placed the flat in which she lived in Madrid at the disposal of a colleague, but reserved the right to use it whenever she returned there. The lease on the flat expired before she was recruited as an official. Her parents live in Albacete, in Spain.

By decision of 12 April 1994 the Commission determined the applicant's place of recruitment and place of origin as Brussels and refused to pay her the installation allowance, to reimburse her removal expenses or to pay the daily subsistence allowance. She was granted the expatriation allowance.

The applicant lodged a complaint against that decision.

By decision of 11 November 1994 the Commission rejected that complaint, although it subsequently determined the applicant's place of origin as Albacete.

Substance

Daily subsistence allowance

In order to determine whether an official had to ‘change his place of residence’ within the meaning of Article 10 of Annex VII to the Staff Regulations of Officials of the European Communities (Annex VII and Staff Regulations), the place of residence to be taken into account is the one where the official concerned has his centre of interests. To be entitled to the daily subsistence allowance, it is sufficient that he should be unable to continue to live at that former place of residence. That interpretation is dictated by the fact that the purpose of the daily subsistence allowance is to make up for the inconvenience resulting from the precarious nature of the employment relationship of the person concerned (paragraph 47).

See: C-43/94 P Parliament v Vienne [1995] ECR I-2441, para. 21

In order to determine the place where the official concerned has established, with the intention that it should be of a lasting character, the permanent or habitual centre of his interests, it is necessary to take account of all the circumstances which constitute that centre of interests. The place to be taken into account is therefore not necessarily the one in which the official resided immediately prior to being appointed (paragraph 48).

See: C-452/93 P Magdalena Fernández v Commission [1994] ECR I-4295, paras 22 and 23; Opinion of Advocate General Léger in Parliament v Vienne, cited above, at I-2443, para. 25

When she was recruited as a probationary official the applicant had no residence in Madrid. Although her situation prior to being appointed as a probationary official was precarious, she has not established the existence of a residence other than her Brussels residence. The applicant was therefore not required to change her place of residence when she was appointed (paragraphs 51 to 53).

The fact that the applicant maintained a number of links with Spain, in particular the fact that she remained in the employment of her ministry of origin and discharged her civic and fiscal obligations in Spain, is not sufficient to establish that she had to change her place of residence (paragraph 54).

That analysis is consistent with the purpose of Article 10 of Annex VII, which is intended to make up for the expense and inconvenience occasioned to an official by his precarious situation, in particular where he is required to establish provisional residence at his place of employment while maintaining, also on a provisional basis, his previous residence (paragraph 55).

See: 280/85 Mouzourakis v Parliament [1987] BCR 589, para. 9; T-63/91 Benzler v Commission [1992] ECR II-2095, para. 20

Justification for granting the daily subsistence allowance is therefore lacking (paragraph 55).

See: Benzler v Commission, cited above, para. 21

Installation allowance

The first subparagraph of Article 5(1) of Annex VII provides that to be entitled to an installation allowance an official must meet one of the two alternative conditions set out therein, that is to say he must qualify for the expatriation allowance or he must furnish evidence of having been obliged to change his place of residence in order to comply with Article 20 of the Staff Regulations (paragraphs 57 and 58).

The applicant receives the expatriation allowance, which was granted by a decision of the Commission which has become final. She is therefore entitled to the installation allowance (paragraphs 60 and 61).

In order to be so entitled an official is not additionally required to show that he has had to change his residence (paragraph 61).

Nor is the official concerned required to show the existence of actual expenses (paragraph 62).

See: 140/77 Verhaaf v Commission [1978] ECR 2117; Opinion of Advocate General Sir Gordon Slynn in 90/81 Burg v Court of Justice [1982] ECR 983, at 995; T-42/89 Yorck von Wartenburg v Parliament [1990] ECR II-31, paras 21 to 23

The installation allowance is awarded to an established official but not to a probationary official. It follows that, in the most frequently occurring case, that of a probationary official who is subsequently established, that official is already ‘installed’, at least on a provisional basis, at his place of employment in order to comply with Article 20 of the Staff Regulations. The installation allowance is intended to make up for the expenses associated with the situation of a duly established official who passes from a precarious status to a permanent status and must therefore enable himself to live in and become integrated into his place of employment in a permanent and lasting manner for an indeterminate but substantial period of time. It is reasonable to assume that an official who is thus required to establish stable residence in such circumstances will incur certain additional expenditure, in particular in arranging appropriate accommodation for a long-term stay, which he did not have to incur while his situation remained precarious (paragraph 63).

See: Verhaaf v Commission, cited above, para. 18

The applicant's situation corresponds to the purpose of Article 5(1) of Annex VII, since she was required to establish stable residence at her place of employment (paragraph 64).

Lastly, Article 5(3) of Annex VII merely requires proof that the official and, where appropriate, his family have settled at his place of employment, that is that they are living there (paragraph 65).

The contested decision is annulled in so far as it refuses to grant the applicant the installation allowance (paragraph 66).

Reimbursement of removal expenses

The purpose of Article 9(1) of Annex VII is to enable an official to bear the costs of moving from his former place of residence to his place of employment. That provision only allows for reimbursement of the costs actually incurred, in accordance with an estimate approved in advance (paragraph 69).

In order to determine whether the applicant was required to change her place of residence to comply with Article 20 of the Staff Regulations, it is appropriate to employ by analogy the approach adopted by the Court of Justice in paragraph 21 of the judgment in Parliament v Vienne to the meaning of the expression ‘must change his place of residence’ in the context of the daily subsistence allowance provided for in Article 10 of Annex VII (paragraph 70).

See: Parliament v Vienne, cited above, para. 21

The applicant was not required to change her place of residence, since she had not maintained a physical residence in her place of origin. She is therefore not entitled to reimbursement of removal expenses (paragraph 71).

See: T-132/95 Gammeltoft v Commission [1996] ECRSC II-1631

Place of recruitment

At the time of her recruitment the applicant had no residence other than her residence in Brussels. That residence must therefore be regarded as her habitual residence. Although that residence was provisional, the applicant has not adduced evidence to show the existence of another residence having the features which would enable it to be regarded as her habitual residence at the time of her recruitment as a probationary official. The Commission was correct in determining that Brussels was her place of recruitment (paragraphs 76 and 77).

Operative part:

The Commission's decision of 12 April 1994 is annulled, in so far as it refuses to grant to the applicant the daily subsistence allowance provided for in Article 5(1) of Annex VII to the Staff Regulations.

The Commission is ordered to pay the said allowance to the applicant, together with default interest at the rate of 8% per annum from the date on which it became payable pursuant to Annex VII to the Staff Regulations.

The remainder of the application is dismissed.