JUDGMENT OF THE EUROPEAN UNION CIVIL SERVICE TRIBUNAL

(Second Chamber)

11 December 2013

Carlos Andres and Others

v

European Central Bank (ECB)

‛Civil service — ECB staff — Reform of pension arrangements — Freezing of the retirement plan — Introduction of the pension scheme — Consultation of the Oversight Committee — Consultation of the Staff Committee — Consultation of the General Council — Consultation of the Governing Council — Triennial assessment of the retirement plan — Infringement of the Conditions of Employment — Manifest error of assessment — Principle of proportionality — Acquired rights — Principle of legal certainty and foreseeability — Duty to provide information’

Application:

under Article 36.2 of the Protocol on the Statute of the European System of Central Banks and of the European Central Bank, annexed to the EU Treaty and the FEU Treaty, in which Mr Andres and 168 other applicants seek in essence, first, annulment of their payslips for June 2009 in so far as those payslips constitute the initial implementation with regard to them of the reform of the pension arrangements of the European Central Bank (ECB) decided upon on 4 May 2009 and annulment of all subsequent payslips and all future pension statements and, secondly, an order that the ECB must pay the difference between the salary or pension that they would have received under the previous pension arrangements and the salary or pension resulting from the new pension arrangements, and payment of damages for the loss they claim to have suffered by reason of the reduction in their purchasing power.

Held:

The action is dismissed. Mr Andres and the 168 other applicants whose names are set out in the annex are to bear their own costs and are ordered to pay the costs incurred by the European Central Bank.

Summary

Officials — European Central Bank staff — Pensions — Replacement of the retirement plan by a pension scheme — Removal of the right to an early pension, without incurring reductions, from age 60 — Application of new provisions to staff who have not reached that age at the date of entry into force of the reform — Breach of the principle of the protection of acquired rights — None — Existence of a right that the former pension conversion factors be maintained — None

Officials — European Central Bank staff — Pensions — Financing of the pension scheme — Rules for maintaining the actuarial balance of the Bank’s pension arrangements — Fixing — Discretion of the Governing Council — Judicial review — Limits — Reform of the pension arrangements entailing differing consequences, in terms of contributions, for members of staff and for the Bank — Breach of the principle of proportionality — None

Since the tasks of the Oversight Committee of the European Central Bank relate only to the operation of the retirement plan and not its design, that committee may only issue opinions in relation to aspects concerning the general operation of the retirement plan and it has no power to issue opinions on amendments to the pension arrangements in general envisaged by the European Central Bank. Therefore, the powers of the Oversight Committee are not infringed if consultation of the committee is limited to that part of the reform concerning the freezing of the retirement plan. In that regard, although there is a duty on the European Central Bank to have regard for the welfare of officials when it adopts a measure of general application as regards its staff, that duty does not compel the administration to infringe the scope of the relevant provisions. Thus, although neither the former Annex III to the Conditions of Employment for Staff nor the terms of reference of the Oversight Committee expressly preclude consultation of that committee on the amendments envisaged in the context of reform of the pension arrangements, none the less, first, those provisions lay down no obligation to carry out such consultation and, secondly, the Oversight Committee is entitled to issue opinions only on matters relating to the general operation of the retirement plan. In those circumstances the Bank cannot be criticised for failing to take into consideration the interests of the staff in deciding not to consult the Oversight Committee on the introduction of the pension scheme. (see paras 141, 143, 146, 147) See: 15 December 2010, F‑66/09 Saracco v ECB, para. 106; 29 September 2011, F‑9/07 Angé Serrano v Parliament, para. 89

The obligation to consult incumbent on the European Central Bank in the context of reform of its pension arrangements means that it must supply the Oversight Committee for the retirement plan with the relevant information throughout the consultation procedure, the objective being to enable the committee to participate in the consultation process as fully and effectively as possible. In order to do so, all new relevant information must be supplied to it by the Bank up until the last moment of that process. Excluded from that obligation are internal preparatory documents, access to which the Bank may in principle refuse to bodies other than its own decision-making bodies. The same applies in respect of preparatory documents for meetings held by the Governing Council, the Executive Board and the General Council, and on-screen presentations given at such meetings. Moreover, regarding the minutes of meetings held by the Governing Council, the Executive Board and the General Council, under Article 10.4 of the Protocol on the Statute of the European System of Central Banks and of the European Central Bank and Article 23.1 of the Rules of Procedure of the Bank, meetings of the Bank’s decision-making bodies are to be confidential unless the Governing Council authorises the President of the Bank to make the outcome of their deliberations public. In those circumstances, the Bank is not required to disclose them, on its own initiative, to the Oversight Committee. (see paras 153, 154, 157, 164, 220) See: 10 September 2009, C‑44/08 Akavan Erityisalojen Keskusliitto AEK and Others, para. 53

Consultation of the Staff Committee comprises merely the right to be heard. Even though prior consultation of that committee constitutes an essential element of social dialogue, in that it enables the committee to participate effectively, in certain matters concerning the interests of the staff, in the decision-making process, it is none the less a modest form of participation in a decision-making process, in so far as it does not involve any obligation for the administration to act upon the observations made by the Staff Committee during the consultation. That being so, unless it is to undermine the effectiveness of the obligation to consult that committee, the administration must comply strictly with that obligation whenever consultation of the Staff Committee is liable to have an influence on the substance of the measure to be adopted. Therefore, the right of the Staff Committee of the European Central Bank to be consulted does not provide an assurance that it can influence the decision-making process, since the Bank is not required to follow the views expressed by the body consulted. In that regard, the answer to the question whether or not the consultation procedure lacked effectiveness does not therefore depend on the number or content of the amendments made by the Bank, at the Staff Committee’s request, to its initial proposal for reform, but on the genuine opportunities that were given that committee to comment meaningfully on the Bank’s proposals and examine other possible solutions. (see paras 191, 192) See: 20 November 2003, T‑63/02 Cerafogli and Poloni v ECB, para. 23 and the case-law cited

The President of the European Central Bank is not required to take any measures, including convening a meeting of the Executive Board of the Bank, in order that a letter from the Staff Committee may be submitted to the members of the Executive Board and the members of the Governing Council. Although under Article 6 of the Rules of Procedure of the Bank, the President of the Bank may convene meetings of the Executive Board whenever he deems it necessary, and Article 4 of the Rules of Procedure of the Executive Board provides an opportunity for the Executive Board to take decisions by means of teleconferencing, it is still for the President to assess the need to convene such a meeting of the Executive Board or to organise a teleconference. (see para. 241)

In line with the principle of sound financial management, the European Central Bank is responsible for adopting the measures which it considers appropriate in order to make up the structural deficit in its retirement plan. However, although Article 6.3 of the former Annex III to the Conditions of Employment of the Bank provides that the Bank is to pay out of its general assets any such supplementary contributions as the Governing Council, acting on actuarial advice, may deem to be appropriate, if that council considers that it is not appropriate to maintain in future the obligation on the Bank to pay supplementary contributions to the plan the Bank is not required to make such payments. Similarly, it cannot validly be claimed that the European Central Bank should have restored the financial equilibrium of the plan by increasing its regular contributions, under Article 6.6 of the former Annex III to the Conditions of Employment. It is apparent from the very wording of that provision that such a decision falls entirely to the discretion of the Governing Council. Moreover, the Governing Council is at any moment entitled to terminate the Bank’s contributions to the retirement plan itself, under Article 5.1 and Article 6.6 of the former Annex III to the Conditions of Employment. A fortiori it is also entitled to take far less drastic decisions such as refusal to pay supplementary contributions or adjusted regular contributions. (see paras 268, 269, 271, 272)

The actuarial balance of the pension scheme of officials of the European Union, the detailed rules for which are laid down in Annex XII to the Staff Regulations, requires the taking into account, in the long term, of economic developments and financial variables, and requires complex statistical calculations to be made. That is why the EU legislature enjoys a wide discretion in adopting the detailed rules to ensure the actuarial balance of that pension scheme. The same must apply with regard to the system of rules introduced by the Governing Council of the European Central Bank, which also has broad discretion to ensure the actuarial balance of the pension arrangements applying for members of staff of the Bank. However, in an area in which the legislature has a broad discretion, the review of proportionality must be confined solely to examining whether the measure at issue is manifestly inappropriate having regard to the objective which the competent institution is required to pursue. In that regard, the mere fact that the consequences of the reform are different, in terms of contributions, for members of staff and for the Bank in its capacity as employer, is not in itself sufficient to establish infringement of the principle of proportionality, since the former Annex III to the Conditions of Employment does not by any means require the Bank automatically to pay supplementary contributions in order to make up any deficit in the retirement plan, such payment, moreover, being conditional on the approval of the Governing Council, which took the view that it was necessary to freeze the plan and replace it by the pension scheme. (see paras 315-318, 321) See: 11 July 2007, F‑105/05 Wils v Parliament, paras 70, 72 and 73

Although employment relationships between the Bank and its staff are of a contractual nature, it is also apparent from Article 9(a) of those Conditions of Employment that those relationships are governed by contracts of employment concluded in accordance with those Conditions of Employment. It follows that the terms of those Conditions of Employment, and of the former Annex III concerning the Bank’s retirement plan, form part of the contracts of employment of the staff. In that regard, the Conditions of Employment cannot be regarded as collective agreements for the purposes of Article 2(2)(j)(i) of Directive 91/533 on an employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship, since they were adopted unilaterally by the Governing Council alone, exercising the regulatory power devolved to it by Article 36.1 of the Protocol on the Statute of the European System of Central Banks and of the European Central Bank and did not form the subject of negotiations between staff members and the institution. Thus, since employment contracts are issued in conjunction with the Conditions of Employment, under Article 9(a) thereof, it follows that, by countersigning the letter of appointment provided for by Article 10(a) of the Conditions of Employment, staff agree to be bound by those conditions without being able to negotiate individually any of their terms. Consent is thus to an extent limited to acceptance of the rights and obligations laid down by the Conditions of Employment. Those contracts of employment are mainly governed by public service regulations and, from the time they are concluded, the contractual autonomy of future staff members is very limited. It is true that the contracts may contain other terms agreed to by the member of staff concerned following discussion, relating, for example, to the essential features of the tasks entrusted to him. However, the existence of such terms does not in itself preclude the exercise by the Bank’s management bodies of their discretion to implement the measures entailed by the public interest obligations deriving from the particular responsibilities entrusted to the Bank. Those bodies may, for instance be compelled, in order to meet such requirements of the service, and in particular to enable it to adapt to new needs, to take unilateral decisions or measures liable to alter inter alia the implementing conditions of employment contracts. It follows that, in exercising that discretion, the Bank’s management bodies are not in any different position from that in which the management bodies of other bodies and institutions of the European Union find themselves in their relations with their staff. Consequently, the provisions of the Conditions of Employment for Staff of the European Central Bank, and those of the former Annex III concerning the retirement plan, cannot be regarded as being intangible conditions of the employment relationship between the Bank and its staff, such that the European Central Bank would not be legally entitled to amend them without the consent of its staff, and that if it did take such action the Bank would infringe the basic conditions of their employment contracts. (see paras 373-375, 377-380) See: 14 October 2004, C‑409/02 P Pflugradt v ECB, paras 34 to 37, 49 and 53 18 October 2001, T‑333/99 X v ECB, para. 61

An official cannot claim an acquired right unless the facts giving rise to his right arose under public service rules in force prior to the amendment made to those rules which he contests by his action. As regards a reform of the Conditions of Employment for the Staff of the European Central Bank comprising amendment of the former Annex III to those conditions, freezing the Bank’s retirement plan and replacing that plan with new pension arrangements, namely the pension scheme, so far as concerns the acquired right of a member of the staff to retire from age 60 without any reduction in benefits under Articles 11.1 and 11.5 of the former Annex III, it is clear from those provisions that it is the fact that a member has reached the age of 60 that constitutes the event giving rise to the right to the pension and enables him to request immediate payment of a pension and payment of his benefits without incurring any reduction. Consequently, a member of staff of the Bank who had not reached that age on the date on which the reform entered into force had only a right conferring prospective entitlement and not an acquired right to payment of his pension entitlement without any reduction in benefits. Moreover, since a clear distinction exists between the determination of pension rights and the payment of the ensuing benefits, acquired rights in terms of determination of a pension are not infringed where the changes which took place in the amounts actually paid were due to the effect of conversion factors, changes which do not have the effect of encroaching upon the pension rights as such. Pension conversion factors do not form part of pension rights as such, but constitute an instrument which ensures that pension benefits are calculated on the basis of updated mortality tables. Since conversion factors are based, inter alia, on mortality tables, regular updating is essential in order to reflect life expectancy forecasts. Consequently, a member of the Bank’s staff cannot have an acquired right that the same pension conversion factors will be applied as were in force before the entry into force of the reform, or that, when the time comes, his pension rights in respect of periods completed under the plan that has been frozen will be paid, inter alia, in accordance with those factors. (see paras 385-387, 389, 390) See: 11 March 1982, 127/80 Grogan v Commission, paras 14 and 15 29 November 2006, T‑135/05 Campoli v Commission, paras 78 and 80; 11 July 2007, T‑58/05 Centeno Mediavilla and Others v Commission, para. 58 and the case-law cited