JUDGMENT OF THE COURT OF FIRST INSTANCE (Fourth Chamber)

7 December 1995

Joined Cases T-544/93 and T-566/93

Giovanni Battista Abello and Others and Gerhard Riesch

v

Commission of the European Communities

‛Officials — Pay slips — Weightings — Council Regulations Nos 3761/92, 3765/92 and 3766/92 — Plea of illegality’

Full text in Italian II-815

Application for:

— annulment of the applicants' pay slips for December 1992 and January 1993, in so far as they were drawn up in accordance with the weightings fixed by Council Regulations Nos 3761/92, 3765/92 and 3766/92 of 21 December 1992 and, by way of a preliminary plea, a declaration that the regulations in question are unlawful;

— compensation for the damage which the applicants claim to have suffered on account of the use of the weightings at issue.

Decision:

Application dismissed.

Abstract of the Judgment

On 21 December 1992 the Council adopted Regulations Nos 3765/92, 3766/92 and 3761/92 adjusting, with effect from 1 January 1991, 1 July 1991 and 1 July 1992 respectively, the remuneration and pensions of officials and other servants of the European Communities and the weightings applied thereto (OJ 1992 L 383, pp. 1, 9 and 11). Regulation No 3765/92, implementing the quinquennial review, is based on Council Decision 81/1061 of 15 December 1981 amending the method of adjusting the remuneration of officials and other servants of the Communities (OJ 1981 L 386, p. 6), whereas Regulations Nos 3761/92 and 3766/92 are based on Annex XI to the Staff Regulations of Officials of the European Communities (Staff Regulations). Those Council regulations fix inter alia a weighting for Italy of 111.5 with effect from 1 January 1991, 112.2 with effect from 1 July 1991 and 113.4 with effect from 1 July 1992, and a specific weighting for Varese of 104.3, 103.5 and 105.8, respectively, for the same dates.

In December 1992 the applicants received pay adjustments calculated on the basis of Regulations Nos 3765/92 and 3766/92 and, in January 1993, they received their pay slips for December 1992, drawn up on the basis of Regulation No 3761/92.

By memoranda of 18 March 1993, Gerhard Riesch, acting alone, and the other applicants, acting jointly, submitted complaints under Article 90(2) of the Staff Regulations, challenging the weightings fixed by Regulations Nos 3765/92, 3766/92 and 3761/92.

The claims for annulment of the applicants' pay slips, in so far as they were drawn up in accordance with the weightings fixed by Regulations Nos 3761/92, 3765/92 and 3766/92 and, by way of a preliminary plea, a declaration that the regulations in question are unlawful

1. The pleas in law alleging infringement of Articles 64 and 65 of the Staff Regulations and of the principle of equal treatment of officials

In their arguments in support of their first and second pleas, the applicants complain that the Commission made an erroneous assessment of the living conditions referred to in Article 64 of the Staff Regulations, used an inaccurate method of statistical analysis in determining the basic economic parity in respect of the cost of accommodation for owner-occupiers and miscalculated certain basic economic parities (paragraph 33).

(a) The assessment of the living conditions referred to in Article 64 of the Staff Regulations

The Court notes, first, that Article 64 of the Staff Regulations provides that an official's remuneration is to be weighted at a rate ‘depending on living conditions in the various places of employment’ and, secondly, that the primary puipose of the annual and quinquennial weighting reviews is to verify whether the ratios between weightings accurately reflect purchasing power equivalences between salaries paid to staff serving in the capitals of the Member States (paragraph 39).

Thus, for the puiposes of establishing and reviewing weightings, living conditions are to be understood in terms of the cost of living as indicated by the purchasing power of officials, the aim of the Staff Regulations being, as regards the remuneration of officials, to ensure that, in accordance with the principle of equal treatment, equivalent purchasing power is maintained for all officials irrespective of their place of employment. Purchasing power is the measure of the quantity of goods and services which may be procured by a unit of currency at a particular time and therefore has no meaning except in relation to expenditure liable to be incurred. Application of the rule of equivalence of purchasing power therefore requires that the weighting for a place of employment should be applied only to the amounts likely to be disbursed (paragraph 40).

See: 59/81 Commission v Council [1982] ECR 3329, para. 33; 158/79 Roumengous Carpentier v Commission [1982] ECR 4379, para. 23; T-47/91 Auzat v Commission [1992] ECR H-2535, para. 38

In that connection, the Court considers that the 173 basic parities vis-à-vis purchasing power, chosen by the Statistical Office in agreement with the national statistical departments, serve as suitable indicators to reflect, in a manner which is inevitably approximative, the cost of living and, accordingly, the living conditions of Community officials. They make it possible to calculate with the greatest possible accuracy the expenditure — allowing for different spending habits — borne by officials' salaries (paragraph 41).

(b) The statistical method used by the Commission in determining the basic parity in respect of the cost of accommodation for owner-occupiers

In view of the wording of Articles 64 and 65 of the Staff Regulations and of Annex XI thereto, and of the subject's complexity, the Council enjoys a broad discretion with regard to the question whether it is appropriate to adjust the remuneration of Community officials and, if so, which factors and elements are to be taken into account. In ensuring that the remuneration of the various Community officials commands equivalent purchasing power, Articles 64 and 65 embody the principle of equal treatment of officials. Furthermore, as regards the establishment or review of weightings, Annex XI to the Statute and Decision 81/1061 confer on the Statistical Office the responsibility of calculating the economic parities in agreement with the statistical departments of the Member States, and of verifying whether the ratios between weightings accurately reflect purchasing power equivalences (paragraphs 53, 54 and 55).

Appraisal by the Community judicature, in so far it concerns the definition and the choice of the basic data and statistical methods used by the Statistics Office for drawing up the report referred to in Article 9 of Annex XI to the Staff Regulations, must be confined to verifying that the principles laid down by the Staff Regulations have been complied with, that there is no manifest error of assessment of the facts on which the weightings are based and that there has been no misuse of powers (paragraph 56).

For the purposes of the 1990 quinquennial verification, and of the 1991 and 1992 reviews, the Statistical Office determined the cost of accommodation for officials who are owner-occupiers by reference to the notional rent, a method which involves attributing to the purchase of accommodation the same parity as that attributed to its rental, the information on rental figures being gathered through enquiries made of estate agents (paragraph 57).

On that point, the Court notes that the notional-rent method has been approved by national statistical departments and applied in all places of employment, and by other international organizations which are well known for the technical competence of their statistical departments and economic surveys. Moreover, the Staff Regulations are silent as to the choice of statistical method to be used by the Statistical Office in establishing the weightings. Even though the notional-rent method used by the Statistical Office for determining the cost of accommodation for owner-occupiers may, admittedly, prove to be unsatisfactory and open to improvement in certain respects, its shortcomings are not such as to weaken its general reliability to any significant extent. Furthermore, in the present case, the practice of making enquiries through estate agents - a method used by the Statistical Office in all places where officials are employed - enabled the accommodation costs of officials and other servants of the Commission employed at the Ispra Joint Research Centre to be ascertained in a manner which adequately reflects the special characteristics of the housing area in question and the standard of living of the staff affected (paragraphs 59, 60 and 64).

(c) The alleged miscalculation of certain basic parities

As regards the establishment and review of weightings, the Community judicature may only examine the question whether, having regard to the considerations which may have led the Council and the Commission to arrive at their assessments, the Community institutions have kept within reasonable parameters and have not exercised their powers in a manifestly erroneous manner (paragraph 76).

The Court finds that the applicants have failed to adduce any evidence to show that, as they claim, the data analysed were not comparable or representative or to establish that the basic parities criticized were calculated outside reasonable parameters or in a way which was manifestly erroneous (paragraphs 77, 78, 79 and 80).

2. The plea alleging misuse of powers

Demonstration of misuse of powers requires proof, based on persuasive and consistent evidence, that the contested decision was taken for puiposes other than those stated or that the administration has used its powers for a purpose other than that for which they were conferred upon it. In the present case, the contested weightings were determined in accordance with the Staff Regulations and using statistical methods approved by the national statistical departments, in order to ensure, so far as is possible, that the remuneration of the various Community officials commanded equivalent purchasing power (paragraph 86).

See: 817/79 Buy I and Others v Commission [1982] ECR 245; 69/83 Lux v Court of Auditors [1984] ECR 2447; T-108/89 Scheuer v Commission [1990] ECR II-411, paras 49 and 50

3. Tfie plea alleging lack of a statement of reasons

The statement of the reasons on which a regulation implementing Articles 64 and 65 of the Staff Regulations is based may be confined to indicating, on the one hand, the general situation which led to its adoption and, on the other, the general objectives which it is intended to attain, and need not refer to the technical aspects of the calculation methods used. In the present case, the regulations at issue contain a clear reference to the provisions of the Staff Regulations which have been applied and indicate that they are situated in the context of the annual and quinquennial verifications. Furthermore, it is clear from those regulations that the new weightings were introduced, first, on account of certain disparities observed between the weightings applicable in certain countries to which staff were assigned and those resulting from the verifications and, secondly, on account of the temporary nature of the economic parities fixed by Council Regulations No 3834/91 of 19 December 1991 (OJ 1991 L 361, p. 13) and No 2014/92 of 20 July 1992 (OJ 1992 L 205, p. 1) (paragraphs 89 and 90).

See: 3/83 Abrias and Others v Commission [1985] ECR 1995. paras 30 and 31; T-98/92 and T-99/92 Di Marzio and Lebedeţs Commission [1994] ECRSC II-541. para. 79

4. The plea alleging breach of the principle of the protection of legitimate expectations and acquired rights

An official is entitled to rely on the principle of the protection of legitimate expectations only where it appears that the Community administration has led him to entertain reasonable expectations by giving him precise assurances with regard to his situation. With regard to the establishment of weightings, the officials' situation cannot be regarded as one in which the administration led them to entertain reasonable expectations, since it never gave assurances as to the application of a particular statistical method or an automatic increase in remuneration in the context of the adjustment and review of weightings (paragraphs 94 and 95).

See: T-123/89 Chomel v Commission [1990] ECR II-131, paras 25 to 30

5. The plea alleging infringement of Article 11 of Annex XI to the Staff Regulations

It is clear from the documents before the Court that, first, the Statistical Office is constantly endeavouring to perfect statistical methods so as to gauge in the most appropriate manner possible the cost of living in the various places of employment of officials, in order to ensure, so far as is possible, that the remuneration of the various Community officials commands equivalent purchasing power and that, secondly, the criticized weightings were adopted in agreement with the national statistical departments on the basis of data which they had furnished in accordance with Annex XI to the Staff Regulations (paragraph 99).

The claim for compensation for the damage allegedly suffered by the applicants

According to established case-law, in order for applicants to be able to claim compensation, they must demonstrate that the institution has committed a fault, that a definite and quantifiable loss has occurred and that a causal link exists between the fault and the alleged loss. In the present case, the contested legislation adjusting the weightings was drawn up without any fault whatsoever on the part of the Commission having been established (paragraph 104).

See: T-16/89 Herkenrath and Others v Commission [1992] ECR II-275, para. 36

Operative part:

The application is dismissed.