JUDGMENT OF THE CIVIL SERVICE TRIBUNAL

(First Chamber)

13 April 2011

Case F-38/10

Ioannis Vakalis

v

European Commission

(Civil service — Officials — Pension — Transfer of pension rights acquired in Greece to the pension scheme for officials of the European Union — Calculation of additional seniority — Objection of illegality of the general provisions implementing Articles 11 and 12 of Annex VIII to the Staff Regulations — Principle of equal treatment — Principle of neutrality of the Euro)

Application: brought under Article 270 TFEU, applicable to the EAEC Treaty under Article 106a thereof, whereby Mr Vakalis seeks annulment of the Commission’s decision of 19 August 2009 fixing the additional seniority of Community pension annuities resulting from the transfer of the pension rights which he had acquired before entering the service of the Commission and of the decision of 22 February 2010 rejecting his preliminary complaint.

Held: The action is dismissed, as inadmissible in part and unfounded in part. The Commission is ordered, in addition to bearing its own costs, to pay half of the applicant’s costs. The applicant is ordered to bear half of his own costs.

Summary

1. Officials — Actions — Plea alleging breach of the scope of the law’s application — Finding made by the Tribunal of its own motion

(Rules of Procedure of the Civil Service Tribunal, Art. 77)

2. Officials — Pensions — Pension rights acquired before entering the service of the European Union — Transfer to the European Union scheme — Transitional provisions of Regulation No 723/2004

(Staff Regulations, Annex XIII, Art. 26(1))

3. Officials — Pensions — Pension rights acquired before entering the service of the European Union — Transfer to the European Union scheme — Additional years of pensionable service

(Staff Regulations of Officials, Annex VIII, Art. 11(2))

4. Officials — Pensions — Pension rights acquired before entering the service of the European Union — Transfer to the European Union scheme — Additional years of pensionable service

(Staff Regulations, Annex VIII, Art. 11(2); Council Regulation No 1103/97, Art. 3)

5. Officials — Pensions — Pension rights acquired before entering the service of the European Union — Transfer to the European Union scheme — Additional years of pensionable service

(Staff Regulations of Officials, Annex VIII, Art. 11(2))

6. Procedure — Costs — Burden — Taking into account of the requirements of fairness — Order that the successful party is to pay part of the costs

(Rules of Procedure of the Civil Service Tribunal, Art. 44(2))

1. The European Union judicature has the power and, where appropriate, the duty to raise certain pleas of substantive legality of its own motion. That is so where a public policy plea alleges that a decision breaches the scope of the law’s application. The Civil Service Tribunal would be neglecting its function as the arbiter of legality if, even in the absence of a challenge by the parties in that regard, it failed to make a finding that the contested decision before it had been adopted on the basis of a rule that was not applicable to the circumstances of the case and if, as a consequence, it was led to adjudicate on the dispute before it by itself applying such a rule.

In raising a plea of substantive legality of its own motion the Tribunal does not interfere with the adversarial nature of the proceedings or breach the principle of respect for the rights of the defence. Article 77 of the Rules of Procedure provides that the Tribunal may, of its own motion, decide that there exists an absolute bar to proceeding with an action, on condition that the parties have first been heard. If that condition adequately safeguards the principle audi alteram partem and respects the rights of the defence where the Tribunal decides of its own motion that there exists an absolute bar to proceeding with an action, there is no reason to suppose that the same does not apply where a plea of public policy is raised of the Tribunal’s own motion, whether it relates to substantive or formal legality.

(see paras 28, 29, 38, 39)

See:

15 July 1994, T-576/93 to T-582/93 Browet and Others v Commission, para. 35

21 February 2008, F-31/07 Putterie-De-Beukelaer v Commission, not contradicted on this point by the General Court of the European Union in judgment of 8 July 2010, T-160/08 P Commission v Putterie-De-Beukelaer

2. The transitional provisions of Article 26(1) of Article XIII to the Staff Regulations, in the version resulting from Regulation No 723/2004 amending the Staff Regulations of Officials of the European Communities and the Conditions of employment of other servants of the European Communities, and the transitional provisions of Article 11 of the general provisions implementing Articles 11 and 12 of Annex VIII to the Staff Regulations adopted by the Commission must be interpreted as meaning that they apply only to requests to transfer pension rights submitted by established officials.

The purpose of those provisions, in accordance with the principle of legal certainty, is to protect acquired rights. In fact, a probationary official has no acquired right to the transfer of his pension rights. While it is permissible for the institution concerned to register a request of a probationary official, so that he is not required to lodge a fresh request after being established, that request is none the less premature.

(see paras 42, 44, 46)

3. The operation of converting the funds transferred into European Union years of pensionable service is the responsibility of the administrative authorities of the European Union. However, the fact that it is for the institution concerned, and not for the national authorities, when determining the number of years of service, to take account, where appropriate, of currency fluctuations does not necessarily mean that the abolition, by the general provisions implementing Articles 11 and 12 of Annex VII to the Staff Regulations adopted by the Commission, of the average exchange rate mechanism is unlawful.

In effect, while the institution must take account of exchange rates in order to determine the number of years of service taken into account for the European Union pension scheme, it none the less retains a certain freedom to determine whether it is appropriate to correct, where necessary, the effects of currency fluctuations. The competence of the institution in that respect has the sole consequence that the European Union judicature will review the possibility for that institution no longer to maintain the average exchange rate mechanism.

(see paras 53, 55-57)

See:

15 December 1998, T-233/97 Bang-Hansen v Commission,, para. 38; 18 March 2004, T-67/02 Radauer v Council, paras 28 to 31

4. The abolition by the general provisions implementing Articles 11 and 12 of Annex VIII to the Staff Regulations adopted by the Commission of the average exchange rate mechanism for the purpose of determining the number of years of pensionable service in the context of the transfer of pension rights is not contrary to the principle of the neutrality of the euro and to Article 3 of Regulation No 1103/97 on certain provisions relating to the introduction of the euro. The principle of the neutrality of the euro laid down in that regulation does not by definition prohibit an institution from amending the applicable legislation. The decision to abolish the average exchange rate mechanism was the consequence of budgetary considerations and a political decision no longer to apply that mechanism, which was advantageous to officials who had acquired rights in certain Member States, but it is not the consequence of the introduction of the euro. That mechanism, moreover, was also abolished for the enhancement of pension rights acquired in Member States that did not adopt the euro.

(see paras 64, 65)

See:

11 December 2007, F-117/07 Kolountzios v Commission, paras 32 to 35

5. As regards the transfer of pension rights, the European Union legislature is free to add at any time to the rules of the Staff Regulations the amendments which it deems consistent with the interest of the service and to adopt, for the future, Staff Regulations provisions which are more unfavourable for the officials or other servants concerned, provided, however, that a transitional period is fixed of sufficient duration to prevent the procedures for the liquidation of pensions acquired being altered in an unexpected manner, that the rights properly acquired by officials or servants are protected and that the persons specifically affected by the new rules are treated in the same way. The same applies to the general implementing provisions adopted by the institutions, on condition that they do not derogate from provisions of a higher rank.

In staff policy matters, the European Union judicature confines itself to ascertaining, with respect to the principle of equality and also to the principle of non-discrimination, that the institution concerned did not differentiate unfairly or in a way that was manifestly inappropriate by reference to the objective pursued. In the application of the formulae for the conversion of pension rights, the European Union has a wide discretion when it defines the elements of the system for the conversion of the funds transferred into European Union years of pensionable service.

(see paras 70, 71)

See:

19 March 1975, 28/74 Gillet v Commission, paras 5 and 6; 11 September 2007, C-227/04 P Lindorfer v Council, para. 78

29 November 2006, T-135/05 Campoli v Commission, para. 85; 20 November 2007, T-308/04 Ianniello v Commission, para. 38

11 December 2007, F-60/07 Martin Bermejo v Commission, paras 55 and 56; 24 April 2008, F-61/05 Dalmasso v Commission, para. 78; 30 November 2009, F-3/09 Ridolfi v Commission, paras 53 and 54

6. In a situation in which, as two of the grounds on which an official’s complaint was rejected contained errors of law, the official could believe that he was entitled to bring an action against the decision in issue, the circumstances of the case are such that, in application of Article 87(2) and Article 88 of the Rules of Procedure of the Civil Service Tribunal, the institution, the defendant, should be ordered to pay half the costs incurred by the applicant.

(see para. 81)