Judgment of the Court of 9 June 1992. - Jean Lestelle v Commission of the European Communities. - Appeal - Official - Pensions - Termination of service allowance - Compulsory or optional nature of the pension scheme contribution. - Case C-30/91 P.



European Court reports 1992 Page I-03755



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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1. Officials ° Departure from the service ° Termination of service ° Contribution to the pension scheme

(ECSC Staff Regulations, Art. 34; Council Regulation No 3518/85, Arts 4(7) and 5(1))

2. Appeal ° Pleas ° Grounds of a judgment vitiated by an infringement of Community law ° Operative part well founded on other legal grounds ° Dismissal

Summary

1. Under the principle of equal treatment, all officials who are receiving a salary or an allowance payable by the European Communities and who are not yet in receipt of a pension must contribute in the same manner to the pension scheme.

In providing for specific financial arrangements in the case of officials who have had a measure terminating their service applied to them and who were recruited under the ECSC Staff Regulations, the Community legislation sought not to derogate from the system of contributing to the pension scheme but to prevent such officials from finding themselves financially in a less favourable position than if they had left the service before the entry into force of the measures on termination of service.

Accordingly, the Court of First Instance was entitled to interpret Article 4(7) of Regulation No 3518/85 introducing special measures to terminate the service of officials of the European Communities as a result of the accession of Spain and Portugal as meaning that that provision made no derogation from the obligation to contribute to the pension scheme imposed on the recipient of an allowance granted in accordance with the provisions of Article 34 of the ECSC Staff Regulations.

2. If the grounds of a judgment of the Court of First Instance reveal an infringement of Community law but the operative part appears well founded on other legal grounds, the appeal must be dismissed.

Parties

In Case C-30/91 P,

Jean Lestelle, represented by Jean-Noël Louis, of the Brussels Bar, with an address for service in Luxembourg at the office of Fiduciaire Myson SARL, 1 rue Glesener,

appellant,

supported by

Union syndicale, Brussels, represented by Thierry Demaseure, of the Brussels Bar, with an address for service in Luxembourg at the office of Fiduciaire Myson SARL, 1 rue Glesener,

intervener,

APPEAL against the judgment of the Court of First Instance of 22 November 1990 in Case T-4/90 between Jean Lestelle and the Commission of the European Communities seeking to have that judgment set aside,

the other party to the proceedings being:

Commission of the European Communities, represented by Joseph Griesmar, Legal Adviser, acting as Agent, with an address for service in Luxembourg, at the office of Roberto Hayder, of the Legal Service, Wagner Centre, Kirchberg, whose main contention is that the action should be dismissed as unfounded and, in the alternative, should the contested judgment be set aside, that the form of order sought by the applicant should be dismissed,

THE COURT,

composed of: O. Due, President, R. Joliet, F.A. Schockweiler and F. Grévisse, (Presidents of Chambers), G.F. Mancini, J.C. Moitinho de Almeida, G.C. Rodríguez Iglesias, M. Zuleeg and J.L. Murray, Judges,

Advocate General: G. Tesauro,

Registrar: D. Triantafyllou, Administrator,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 6 February 1992 at which the Commission was represented by D. Pardès, of the Brussels Bar,

after hearing the Opinion of the Advocate General at the sitting on 13 March 1992,

gives the following

Judgment

Grounds

1 By application lodged at the Court Registry on 26 January 1991, Mr Lestelle brought an appeal under Article 49 of the Protocol on the Statute of the Court of Justice of the EEC and the corresponding provisions of the ECSC and EAEC Statutes of the Court of Justice against the judgment of 22 November 1990 in Case T-4/90 Lestelle v Commission [1990] ECR II-689 in which the Court of First Instance dismissed his application and ordered the parties to bear their own costs.

2 It is clear from the findings made by the Court of First Instance in its judgment (paragraphs 1 to 10) that Mr Lestelle, who was born on 9 October 1925, entered the service of the High Authority of the ECSC on 1 June 1956 as an official.

3 By a memorandum of 30 June 1988, Mr Lestelle requested the application of a measure terminating his service under Council Regulation (ECSC, EEC, Euratom) No 3518/85 of 12 December 1985 introducing special measures to terminate the service of officials of the European Communities as a result of the accession of Spain and Portugal (OJ 1985 L 335, p. 56). His request was granted and his service was terminated on 1 November 1988. As from that date he received the monthly allowance provided for under the relevant provisions of the regulation until 31 October 1990, at which time, having reached the age of 65 years, the appellant became entitled to an old-age pension.

4 Article 4 of the regulation provides that an official to whom a measure terminating his service has been applied is to be entitled to a monthly allowance equal to 70% of the basic salary for the grade and step which he held at the time of departure. Article 4(7) adds that:

"During the period for which he is entitled to receive the allowance, the former official shall continue to acquire further rights to retirement pension based on the salary attaching to his grade and step, provided that the contribution provided for in the Staff Regulations ... is paid during that period ...".

5 However, Article 5(1) provides that certain officials who began their career in the service of the ECSC, like Mr Lestelle, "shall be entitled to ask for their pecuniary claims to be settled in accordance with Article 34 of the Staff Regulations of the European Coal and Steel Community and Article 50 of the Rules and Regulations of the European Coal and Steel Community". Article 5(2), however, states that "Article 4(3) and (5) to (9) of this regulation shall continue to apply to the officials referred to in this article ...".

6 Article 34 of the Staff Regulations of the ECSC, to which reference is made in the aforesaid article, concerned the placing of officials on non-active status. It provided that they were to receive for two years a monthly allowance corresponding to their remuneration and, subsequently, also for two years, an allowance equal to one-half of that remuneration. Those Staff Regulations were repealed with effect from 1 January 1962.

7 By a memorandum of 25 January 1989, the Commission' s pensions department informed Mr Lestelle that, on the basis of Article 5(1) mentioned above, his termination of service allowance would be equal to his full salary, but subject to deduction of the contribution intended to finance the pension scheme of the European Communities.

8 By letter of 22 March 1989, Mr Lestelle requested the department to cease making those deductions. He stated that he did not wish to increase his pension rights beyond the level at which they were established on 1 November 1988. In that connection, he inferred from Article 4(7) of the regulation that the contribution in question was optional. By decision of 24 October 1989, which was notified to the applicant in a letter of 30 October 1989, the Commission rejected that complaint on the ground, inter alia, that the period during which the termination of service allowance is paid is considered to be a period of service and thus entails payment of pension contributions.

9 By an application lodged at the registry of the Court of First Instance on 29 January 1990, Mr Lestelle sought in substance the annulment of the Commission' s decision to continue, after 22 March 1989, to deduct pension scheme contributions from the termination of service allowance. He also requested the Court of First Instance to declare that under Article 4(7) of the regulation, payment of the contribution to the pension scheme is an option and not an obligation as regards former officials to whom the regulation has been applied.

10 In its judgment the Court of First Instance points out that, in support of its application for annulment, Mr Lestelle relies on two pleas in law, the first alleging infringement of Article 4(7) of the regulation and the second alleging a factual error on the part of the administration.

11 After dismissing an objection of inadmissibility raised by the Commission (paragraph 30 of the contested judgment), the Court of First Instance analysed the arguments of the parties concerning those two pleas.

12 On the first plea, the Court of First Instance considered, at paragraphs 32 to 40 of its judgment, that the payment of contributions to the pension scheme was an obligation incumbent on Mr Lestelle under Article 95 of the Rules and Regulations of the ECSC. The Court of First Instance went on to point out that the provisions of Articles 4(7) and 5(1) of Regulation No 3518/85 are analogous, on the one hand, to the provisions of Article 5(7) and Article 7(1) of Council Regulation (EEC, Euratom, ECSC) No 259/68 of 29 February 1968 laying down the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Communities and instituting special measures temporarily applicable to officials of the Commission (OJ, English Special Edition 1968 (I), p. 30) and, on the other, to the provisions of Article 3(7) and Article 5(1) of Council Regulation (Euratom, ECSC, EEC) No 2530/72 of 4 December 1972 introducing special and temporary measures applicable to the recruitment of officials of the European Communities in consequence of the accession of new Member States, and for the termination of service of officials of those Communities (OJ, English Special Edition 1972 (1 ° 8 December) p. 11), adopted on the accession of Denmark, Ireland and the United Kingdom. While those regulations were in force, payment of contributions was necessarily obligatory, since at the time no official of the Communities had completed the requisite number of years of service conferring entitlement to the maximum amount of the retirement pension.

13 On the second plea in law, the Court of First Instance observed, at paragraphs 41 to 44 of its judgment, that the administration admittedly erred in considering that Mr Lestelle had not acquired the maximum pension rights possible for him, but that the error did not affect the outcome of the dispute since the payment of contributions to the pension scheme is in any event obligatory.

14 Accordingly, the Court of First Instance concluded that the application had to be dismissed.

15 In seeking to have that judgment set aside, Mr Lestelle first relies on an initial plea alleging infringement of Article 4(7) of Regulation No 3518/85. In the first part of his plea, he maintains that the Court of First Instance based its decision on the Staff Regulations of the ECSC which are no longer in force. He argues, in the second part, that the Court of First Instance did not take account of the fact that Regulation No 3518/85 temporarily introduced a system derogating from the ordinary provisions of law and that it was wrong to reason by analogy in comparing that regulation to earlier regulations.

16 Mr Lestelle then raises a second plea alleging infringement of the principle that judgments must be supported by reasoning. In that connection, he claims that the judgment of the Court of First Instance does not contain an adequate reply to the submissions put forward by him in both the written and the oral procedure.

17 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the procedure and the pleas and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

The plea alleging infringement of Article 4(7) of Regulation No 3518/85

18 At the outset it should be recalled that, as the first recital in the preamble to Regulation No 3518/85 indicates, the Council adopted that regulation because the accession of Spain and Portugal necessitated adjustments to the make-up of the Community civil service.

19 As was the case, in particular, on the accession of Denmark, Ireland and the United Kingdom under Regulation No 2530/72, Article 5 of Regulation No 3518/85 provides that certain officials who began their career in the service of the ECSC may request that their pecuniary rights be determined in the same manner as if they had been placed on non-active status under the relevant provision of the Staff Regulations of the ECSC.

20 Article 34 of those Staff Regulations laid down arrangements for non-active status which, in certain cases, were more advantageous for officials than the compensatory system introduced by Regulation No 3518/85. It entailed the payment of full remuneration for a period of two years and one-half of such remuneration for the next two years, whilst Regulation No 3518/85 limited the monthly payments to 70% of the basic salary. In total, during the first four years, payments in respect of non-active status were therefore higher than the termination of service allowances.

21 As the Court acknowledged in the context of the regulation adopted on the accession of Denmark, Ireland and the United Kingdom (judgment in Case 28/74 Gillet v Commission [1975] ECR 463, paragraph 6), the reason why the Community legislature provided for specific financial arrangements in the case of officials who had been recruited under the Staff Regulations of the ECSC was to prevent them from finding themselves financially in a less favourable position than if they had left the service before the entry into force of the new system.

22 It follows, moreover, from Article 83(2) of the Staff Regulations that officials must contribute to the financing of the pension scheme. Article 36 of Annex VIII to those Staff Regulations states that salaries are in all cases subject to deduction of that contribution. Article 37 of that annex adds that an official on secondment is to continue to pay the contribution referred to in the preceding article. That also applies, up to a maximum of five years, to officials receiving the allowance provided for in respect of non-active status and cessation of employment in the interests of the service and to officials on leave of absence for personal reasons continuing to acquire further pension rights.

23 Those rules reflect the principle of equal treatment whereby all officials who are receiving a salary or an allowance payable by the European Communities and who are not yet in receipt of a pension must contribute in the same manner to the pension scheme.

24 Accordingly, in pursuance of that principle from which Regulation No 3518/85 makes no derogation, the termination of service allowance is in any event subject to payment of contributions to the pension scheme.

25 It is in the light of that statement that the first plea raised by the applicant must be assessed.

26 In the first place, Mr Lestelle alleges that the Court of First Instance founded the obligation to pay contributions on Article 95 of the Rules and Regulations of the ECSC, which were repealed on 1 January 1962.

27 Even if the Court of First Instance was wrong to found the obligation to pay contributions on a repealed provision, that obligation nevertheless remains legally justified on the basis of the considerations set out above.

28 In that connection, it should be emphasized that if the grounds of a judgment of the Court of First Instance reveal an infringement of Community law but the operative part appears well founded on other legal grounds, the appeal must be dismissed.

29 Consequently, the first part of the first plea raised by the applicant must be rejected.

30 Mr Lestelle further submits, in the second part of the first plea, that the Court of First Instance did not take into account the fact that Regulation No 3518/85 temporarily introduced a system derogating from the ordinary provisions of law and that it was wrong to reason by analogy in comparing that regulation to earlier regulations.

31 As stated above, the Community legislature did not seek, in the context of specific measures concerning officials who commenced their career under the Staff Regulations of the ECSC, to derogate from the system of contributions to the pension scheme, which is founded on the principle of equal treatment as between officials.

32 The second part of the first plea must therefore likewise be rejected.

The plea alleging infringement of the principle that judgments must be supported by a statement of reasons

33 Mr Lestelle goes on to criticize the Court of First Instance for not having clarified the meaning of the proviso concerning contributions to the pension scheme in Article 4(7) of Regulation No 3518/85.

34 In that connection, it should be noted that the Court of First Instance considered that Article 4(7) of Regulation No 3518/85 made no derogation from the obligation to contribute to the pension scheme imposed on the recipient of an allowance granted in accordance with the provisions of Article 34 of the Staff Regulations of the ECSC. The Court of First Instance thus recognized clearly and unequivocally that the Council had not sought in that provision to grant to certain officials a mere option to pay contributions, according to whether or not they wished to continue to acquire fresh pension rights.

35 The second plea is therefore unfounded.

36 It follows from all the foregoing considerations that the appeal brought by the applicant must be dismissed.

Decision on costs

Costs

37 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs, if they have been asked for in the other party' s pleadings. Under Article 69(4) of those Rules, the Court may order an intervener other than the Member States and institutions to bear his own costs. Under Article 70, in proceedings between the Communities and their servants the institutions are to bear their own costs. However, under Article 122, Article 70 does not apply to an appeal brought by an official or other servant of the institutions.

38 In the present case, the Commission has requested the Court to make an appropriate order as to costs. That request cannot be construed as a claim for costs to be awarded against the appellant. Therefore, the parties, including the intervener, should be ordered to bear their own costs.

Operative part

On those grounds,

THE COURT

hereby:

1. Dismisses the appeal;

2. Orders the parties, including the intervener, to bear their own costs.