JUDGMENT OF THE EUROPEAN UNION CIVIL SERVICE TRIBUNAL (Third Chamber)

10 September 2014 ( *1 ) ( i )

(Civil service — Temporary staff — Non-renewal of a fixed-term contract — Agency staff — Reduction of staff — ERA multi-annual financial framework — Abolition of two posts from the establishment plan — Compliance with essential formalities — Right to be heard — Internal guidelines — Interests of the service)

In Case F‑120/13,

ACTION brought under Article 270 TFEU,

KE, a former member of the temporary staff of the European Railway Agency, residing in Brussels (Belgium), represented by S.A. Pappas, lawyer,

applicant,

v

The European Railway Agency (ERA), represented by G. Stärkle, acting as Agent, and B. Wägenbaur, lawyer,

defendant,

THE CIVIL SERVICE TRIBUNAL (Third Chamber)

composed of S. Van Raepenbusch, President, E. Perillo and J. Svenningsen (Rapporteur), Judges,

Registrar: X. Lopez Bancalari, Administrator,

having regard to the written procedure and further to the hearing on 18 June 2014,

gives the following

Judgment

1 By application lodged at the Registry of the Tribunal on 12 December 2013, KE seeks the annulment of a decision of the executive director of the European Railway Agency (the ‘ERA’ or the ‘Agency’), of 22 March 2013, addressed to her and confirming that her contract as a member of the temporary staff would expire on the date fixed by the contract, namely 30 September 2014.

Legal context

The conditions of employment of other servants of the European Union

2 Under Article 2(a) of the conditions of employment of other servants of the European Union, in the version applicable to these proceedings (‘the Conditions of Employment’), ‘staff engaged to fill a post which is included in the list of posts appended to the section of the budget relating to each institution and which the budgetary authorities have classified as temporary’ are considered to be temporary staff within the meaning of the Conditions of Employment.

3 The first paragraph of Article 8 of the Conditions of Employment provides: ‘Temporary staff to whom Article 2(a) applies may be engaged for a fixed or indefinite period. The contracts of such staff who are engaged for a fixed period may be renewed not more than once for a fixed period. Any further renewal shall be for an indefinite period.’

4 In the chapter relating to ‘termination of employment’, Article 47(b)(i) of the Conditions of Employment provides that, apart from cessation on death, the employment of a member of the temporary staff is to cease, ‘where the contract is for a fixed period ... on the date stated in the contract’.

Regulation No 881/2004

5 Under Article 22 of Regulation (EC) No 881/2004 of the European Parliament and of the Council of 29 April 2004 establishing a European railway agency (OJ 2004 L 164, p. 1), as amended by Regulation (EC) No 1335/2008 of the European Parliament and of the Council of 16 December 2008, the ERA is a body of the European Union which has legal personality and is represented by its executive director.

6 Article 24 of Regulation No 881/2004, headed ‘Staff’, provides: ‘1. The Staff Regulations of officials of the European [Union], the Conditions of Employment... and the rules adopted jointly by the institutions of the European [Union] for purposes of the application of those Staff Regulations and Conditions of Employment shall apply to the staff of the Agency. 2. Without prejudice to Article 26, the powers conferred on the appointing authority and on the contracting authority by the said Staff Regulations and Conditions of Employment shall be exercised by the Agency in respect of its own staff. 3. Without prejudice to Article 26(1), the Agency’s staff shall consist of: ... — other servants, as defined in the Conditions of Employment..., to carry out implementing or secretarial tasks. …’

The ERA’s decision of 2 October 2008

7 On 2 October 2008, the executive director of the ERA adopted decision 150/09.08 on renewal of temporary agents’ contracts at the Agency (the ‘decision of 2 October 2008’). The recitals in the preamble to that decision refer in particular to the first paragraph of Article 8 of the Conditions of Employment, the Multi-Annual Staff Policy Plan adopted by the Administrative Board of the Agency, and Article 24(3) of Regulation No 881/2004.

8 Article 1 of the decision of 2 October 2008 provides amongst other things that ‘[t]he duration of contract renewal for temporary agents as defined in Article 24(3) of Regulation … 881/2004 is... for long-term posts two years in the case of a first renewal. In the case of a second renewal the contract will be for an indefinite period’.

9 Under Article 2 of the decision of 2 October 2008, ‘[i]n cases where a contract can be prolonged the staff member will be informed by the Executive Director whether his/her contract will be prolonged or not, in principle, six months before the end of his/her contract’.

The guidelines on the prolongation of contracts

10 On 26 November 2008, the head of the ERA’s ‘Administration’ unit adopted guidelines on the prolongation of contracts (the ‘guidelines’). These state that, under the decision of 2 October 2008, in principle, staff members are to be given 6 months’ notice as to whether their contract will be prolonged or not. The purpose of the guidelines is to clarify the procedure to be followed in this regard.

11 Accordingly, the guidelines indicate that the human resources department of the ‘Administration’ unit (the ‘HR department’) is to inform the head of the relevant unit no later than 8 months before the expiry of the contract of the member of staff in question, using a form attached to the guidelines as appendix 1. The head of unit is then to remind the member of staff of the expiry date of the contract and offer him the possibility of a dialogue involving the reporting officer responsible for drawing up his career development report (the ‘CDR’), within 5 working days of being so informed.

12 The head of unit is then to draft a file note, using a form attached to the guidelines as appendix 2, containing an evaluation of the evolution of the post itself and the tasks related to it, and, amongst other things, an opinion on whether the job holder is suited to continue to occupy the post, based in particular on the latest available CDR.

13 On the basis of that information, the head of unit is also to fill in a proposal, using a form annexed to appendix 1, on the prolongation or non-prolongation of the contract. The head of unit is then to submit the proposal and accompanying file note to the HR department, no later than 7 months before the end of the contract. The HR department may add any comments to the file note (appendix 2), particularly as to the budgetary implications of the proposal and its consistency with existing practices on prolongation of contracts within the Agency.

14 The HR department is to submit the proposal, accompanied by the 2 forms, to the executive director for approval. The executive director is then to inform the HR department of his or her decision by completing the annex to appendix 1. Upon receipt of the executive director’s decision, where this recommends the termination of the contract, the HR department is to prepare a letter to be signed by the executive director, reminding the member of the temporary staff of the expiry date of the contract.

15 Finally, the guidelines stipulate that the time-limits are to be calculated only from the time the person concerned has been notified, or at the latest from the date when that person, acting as a diligent staff member, can be expected to have been aware of the contents of whatever document has been sent to him.

The budget documents

16 By decision of 27 November 2012, the Administrative Board of the ERA adopted the budget and establishment plan of the Agency for 2013. The establishment plan for 2013 indicates that, as at 31 December 2011, within the assistants’ function group (AST), the ERA employed 10 members of the temporary staff in grade AST 1, that the EU budget authorised only 7 posts in that grade, and that the Agency had decided to reduce the number to 4.

17 It is apparent from the Multi-Annual Staff Policy Plan for the period 2014-2016, adopted by the Administrative Board of the ERA on 20 March 2013 (the ‘Multi-Annual Staff Policy Plan 2014-2016 for the European Railway Agency’), that the number of posts in the AST function group occupied by members of the temporary staff as at 31 December 2012 was 42, that the number of posts in that function group according to the approved budget of the EU for financial year 2013 was 40, that the number in the draft EU budget for the financial year 2014 was 39, and that, for 2015 and 2016, the numbers envisaged were 37 and 36 respectively.

Background to the dispute

18 The applicant had been employed as an assistant in grade AST 3 under a contract for a period of four years, from 1 September 2007 to 31 August 2011. It is apparent from a letter of 7 May 2007, sent to her by the executive director of the Agency in his capacity as authority empowered to conclude contracts of employment (‘AECCE’), that this contract was offered to her pursuant to Article 2(a) and Articles 8 to 50 of the Conditions of Employment.

19 On 5 May 2011, that contract had been extended until 30 September 2013 by means of an amendment signed by the ERA and the applicant.

20 At the applicant’s own request, she was reassigned from the ‘Finance’ department of the ‘Administration’ unit to the ‘Executive Director’s Office’, within the ‘Communication’ department of the ERA, where she carried out communication tasks, amongst other things. That reassignment took effect on 16 February 2012 and involved the applicant’s employment being transferred to the Directorate of the Agency. It was also stated in the reassignment decision of that date that the reassignment was being effected in the interest of the service, and that the head of the applicant’s unit, as her new direct superior, was to update the post description so as to reflect the functions and tasks for which she would thereafter be responsible.

The procedure which led to the adoption of the contested decision

21 On 22 February 2013, the head of the HR department sent a note to the applicant’s head of unit asking him, in accordance with the decision of 2 October 2008, to provide his opinion on the relevant part of the form (which was attached, entitled ‘Note for the File’), by 15 March 2013 at the latest, for the information of those concerned as to whether the applicant’s contract, which was due to expire on 30 September 2013, should be renewed.

22 At an interview held on 14 March 2013, the applicant was informed orally by her head of unit of his intention not to propose the renewal of her contract. According to the applicant, the head of unit explained to her that she had been reassigned, along with her post, to the Directorate of the Agency solely to carry out communication tasks, but that it had become clear that she did not have the training or the technical abilities to continue in that post, now attached to the Directorate of the Agency. Thus, according to the applicant, the head of unit did not make any reference to budgetary imperatives requiring her post to be abolished, as a justification for the non-renewal of her contract.

23 In her response to a measure of organisation of the procedure, the applicant stated that during this meeting, said to have lasted about 20 minutes, she pointed out that following her transfer to the Directorate of the Agency, her post description was supposed to have been amended by her head of unit, but this had not been done. The applicant therefore stated in her response that ‘she did not understand ... why she was now being criticised for not having the abilities required for a communication post, when she occupied a financial and administrative support post’. In the same response, she complained that her head of unit had not involved her sufficiently in financial issues relating to the departments of the Directorate of the Agency.

24 At the hearing, the Agency stated that the issue of renewal of the contract was initially supposed to have been discussed at a meeting scheduled for 13 March 2013, but that this meeting did not ultimately take place, owing to the applicant’s absence. During the morning of 14 March 2013, the applicant and the head of unit were then said to have met in order to discuss this issue, to have agreed to discuss it further during the day, and to have done so in the evening, at a meeting which, according to the Agency, lasted about an hour.

25 Also on 14 March 2013, in the file note provided by the HR department, in the section entitled ‘evaluation of the evolution of the post itself and the tasks related to it’, the head of unit stated that ‘the post occupied by the job holder was created in order to accommodate her wish to gain experience outside the Finance Sector’. It was also stated that, ‘[t]o realise the reduction of AST posts under the EU 2013 budget and subsequent years, and in the general interest of the Agency it has been decided not to renew the post’. Under the heading ‘opinion on whether the job holder is suited to continue to occupy the post’, the head of unit stated that ‘[d]ue to the disappearance of the post, this is not relevant’.

26 By letter of 22 March 2013, countersigned by the applicant on 25 March 2013, the executive director of the ERA confirmed to her that her contract of employment, ‘which had commenced on [1 October] 2007, [would] expire on 30 [September] 2013’ (‘the contested decision’). At the applicant’s request, made in an email of 27 March 2013, she was sent a copy of the file note which had accompanied the proposal for non-renewal of her contract.

27 On 2 April 2013, the head of the HR department signed the part of the form which concerned that department, crossing out the heading ‘budgetary implications of the proposal, consistency with existing practice within the organisation and any other information considered necessary’ and, consequently, not making any comment under that heading.

28 On 7 May 2013, the applicant made a complaint against the contested decision pursuant to Article 90(2) of the Staff Regulations of Officials of the European Union (the ‘Staff Regulations’). In support of the complaint, she relied on the AECCE’s failure to observe the procedure in that the head of unit ‘had not informed her of the commencement of the renewal process, or the possibility of a discussion’, on a manifest error of assessment in relation to the need to abolish the applicant’s post and the general interest of the service in not renewing her contract, and on the failure to take her interests into account in the contested decision, particularly the fact that the contract, if renewed, would have become a contract for an indefinite period.

The decision rejecting the complaint

29 By decision of 5 September 2013, the AECCE rejected the complaint (‘the decision rejecting the complaint’).

30 The AECCE stated that, before setting out its arguments in response to the applicant, it wished to remind her of the context in which the contested decision had been made. In this regard it emphasised that the applicant had been transferred, at her own request, with effect from 16 February 2012, and that it had been decided, by mutual agreement, to change her functions so as to include more communications tasks, in order to enable her to pursue a career at the ERA. However, owing to the reforms that had been announced and the cuts made in the budget, particularly the staff budget, the AECCE faced a difficult situation and it had been constrained, at the request of the European Commission, to reduce its staff numbers by abolishing three posts in the AST function group.

31 The decision rejecting the complaint indicated that the reduction of staff was to continue under the supervision and the impetus of the Commission. In its opinion of 6 March 2013 on the Multi-Annual Staff Policy Plan of the ERA for the period 2014-2016, the Commission had once again required the Agency to observe the general policy of reducing staff numbers within EU institutions by 2% per year. It was against that background that the directorate had decided to abolish the two posts it had, out of the five occupied by members of the temporary staff in function group AST whose contracts of employment expired in 2013. This choice had been guided by the identification of the posts whose abolition would entail the least possible impact on the operational functioning of the Agency, and it was on that basis that the ERA had chosen a post in function group AST which was in the ‘resources and support’ group, at directorate level, namely that occupied by the applicant.

32 The AECCE also stated, in the decision rejecting the complaint, that it had been decided to abolish the applicant’s post, and not to renew her contract of employment, because the applicant’s head of unit did not think that her performance in basic communication tasks would, in the foreseeable future, reach the level required for such a post. The AECCE indicated that this had been explained to the applicant orally during the interview with her superior on 14 March 2013.

33 The AECCE added that it was for these reasons that it had come to the view that the applicant’s contract could not be renewed because it could not be financed under the Agency’s 2014 budget, that it was not possible to create new posts within function group AST and, furthermore, that no other post within that function group was to become vacant in the near future, with the result that it was not possible to envisage the applicant being transferred to another unit.

34 In response to the arguments advanced by the applicant in her complaint, the AECCE maintained that the non-renewal of her contract was in accordance with the decision of 2 October 2008 as she had been duly informed in that regard within the period of six months ending with the expiry of her contract. In response to the applicant’s questioning of the reality of the budgetary constraints on the Agency and of the need to abolish her post, as presented in the file note relating to the extension of her contract, the AECCE stated that the reference to the reduction of the number of posts in function group AST in the general budget of the EU for the financial year 2013 and in subsequent budgets was sufficient in terms of providing supporting reasons for such a note, and that more detailed reasons had been provided in the documents to which the note referred.

35 As to the account to be taken of the applicant’s interests, the AECCE pointed out that the interest of the service takes priority over the interests of the employee and that, in any event, the interest of the employee cannot prevent the administration from rationalising its departments if it considers this necessary. Finally, the AECCE pointed out that, in paragraph 167 of its judgment in AI v Court of Justice (F‑85/10, EU:F:2012:97), the Tribunal had held that ‘the administration is under no obligation to offer a reassignment to a temporary employee whose performance is judged to be unsatisfactory’.

Forms of order sought by the parties

36 The applicant submits that the Tribunal should annul the contested decision and order the ERA to pay the costs.

37 The Agency contends that the Tribunal should dismiss the action and order the applicant to pay the costs.

Law

38 The applicant relies on three pleas in law in support of her action, alleging respectively infringement of essential procedural requirements, manifest error of assessment and breach of the ERA’s duty to have regard for the welfare of its employees.

The first plea in law: infringement of essential procedural requirements

Arguments of the parties

39 The first plea in law is in two parts, the first based on infringement of the right of defence, and the second on infringement of an essential procedural requirement, entailing an infringement of the principle of equal treatment.

40 In this regard, in reliance on Lux v Court of Auditors (129/82 and 274/82, EU:C:1984:391, paragraph 20), the applicant maintains that, while internal directives such as the decision of 2 October 2008 and the guidelines do not have the character of a rule of law which the administration is bound to observe, nevertheless the administration may not depart from them without giving valid reasons for doing so. The AECCE is said to have infringed this principle in the present case in that it did not scrupulously follow its own procedure. This, it is claimed, constitutes not only an infringement of the principle of equal treatment, but also an infringement of the rights of defence.

41 The applicant also asserts that the HR department did not seek the head of unit’s opinion on the issue of renewal of her contract until 22 February 2013, or 20 days later than is contemplated by the guidelines, which provide that the consultation procedure is to begin no later than 8 months before the contract in question is due to expire. The applicant also alleges that, contrary to the guidelines, the AECCE did not inform her of the commencement of the renewal process or the possibility of a discussion within 5 working days of such commencement.

42 In failing to inform the applicant of the possibility of a discussion with the head of unit, involving the reporting officer if necessary (as it happened, the head of unit was also the reporting officer) the AECCE is alleged to have infringed the applicant’s right to be heard and to present her arguments on the issue of non-renewal of her contract.

43 The applicant also claims that the AECCE committed a ‘fundamental breach of procedure’ in that the HR department, which finalised the file note by signing it on 2 April 2013, did not consult before adopting the contested decision on 22 March 2013. This, she claims, is an irregularity, given the requirements of the guidelines, in that the executive director is supposed to have regard to the comments of the HR department in adopting a decision as to whether to renew the contract, and it was those very comments that were lacking. This breach, it is claimed, has particular significance in the present case, because the contested decision was based essentially on budgetary reasons which dictated the abolition of posts. The applicant also maintains that, if the procedure had been followed, the contested decision might have been substantially different.

44 The ERA contends that this plea in law should be dismissed. It first submits, essentially, that in the present case the applicant was, in any event, informed of the decision not to renew her contact six months before the expiry of that contract, which is in accordance with the decision of 2 October 2008. Secondly, in relation to the guidelines, it submits essentially that these apply only where there is a possibility of the contract in question being renewed, which is not the case where, as here, the post concerned is to be abolished for budgetary reasons.

Findings of the Tribunal

– General considerations

45 By her first plea, the applicant essentially alleges that the Agency infringed her right to be heard before the contested decision was adopted, and that it did not follow its own procedure, which it had itself put in place in order to guarantee that right.

46 In that regard, it should first be noted that the Conditions of Employment, and particularly Article 47 of those conditions, do not lay down a specific procedure intended to enable a member of the temporary staff, employed for a fixed period, to be duly heard before a decision is taken not to renew his or her contract. It is in the nature of such a decision that it adversely affects the employment and personal situation of the person concerned.

47 However, given that the Staff Regulations and associated texts are silent on the matter, an institution or agency may lay down procedures and internal arrangements enabling a member of the temporary staff to be heard before a decision as to whether his employment is to continue is taken, for example by adopting internal directives, provided that the exercise of this power does not lead to any derogation from an explicit rule of the Staff Regulations or the Conditions of Employment (see Schneider v Commission, T‑54/92, EU:T:1994:283, paragraph 19, and Petrilli v Commission, F‑98/07, EU:F:2009:7, paragraph 55 and the case-law cited).

48 In an area where the institution or agency has a wide discretion conferred by the Staff Regulations, such internal directives may take the form of a decision communicated to all staff and intended to guarantee that the officials and other servants concerned will receive the same treatment. A decision of this kind which is adopted by an institution or agency must, as such, be regarded as a rule of conduct, indicating the practice to be followed, which the administration imposes on itself and from which it may not depart without specifying the reasons for doing so, since otherwise the principle of equal treatment would be infringed (see Louwage v Commission, 148/73, EU:C:1974:7, paragraph 12; Lux v Court of Auditors, EU:C:1984:391, paragraph 20; and Monaco v Parliament, T‑92/96, EU:T:1997:105, paragraph 46; and, in relation to staff reports, Bernard v Europol, F‑99/07 and F‑45/08, EU:F:2009:84, paragraph 79 and the case-law cited).

49 In the present case, the guidelines, which detail the procedure to be followed in relation to the renewal of contracts of members of the temporary staff within the ERA, constitute an internal directive within the meaning of the case-law referred to above. The Tribunal accordingly finds that, in providing that those concerned would, in principle, be informed six months before the end of their contracts, and in detailing the procedure to be followed by the Agency, involving an opportunity for those concerned to present their point of view, the ERA, by means of the decision of 2 October 2008 and the guidelines, made arrangements for the benefit of its staff securing them the right to be heard as to the appropriateness of renewing their fixed-term contracts of employment.

50 In any event, the Charter of Fundamental Rights of the European Union, as an act which, under Article 6 TEU, has the same legal value as the Treaties, has, since entering into force on 1 December 2009, expressly enshrined, in Article 41, the fundamental right of every person ‘to be heard ... before any individual measure which would affect him or her adversely is taken’. Under Article 51 of the Charter, Article 41 is addressed directly to the institutions, bodies, offices and agencies of the Union, which are therefore required to respect and apply it, within the limits set out in Article 52 of the Charter.

51 The first plea in law should be examined in light of all of those considerations.

– The first part, alleging infringement of the rights of defence

52 It must be observed, by way of a preliminary observation, that the applicant was aware, as she acknowledged for instance at the hearing, of the terms of the decision of 2 October 2009 and of the guidelines which had governed the procedure leading to the renewal of her contract on 5 May 2011.

53 With regard to whether the Agency complied fully with the guidelines in this case, particularly in respect of the discussion which was to be held, between the Agency and the member of staff concerned, as to the possibility of renewing the contract, it is apparent from the file and from argument at the hearing that the applicant had been informed, during the interview with her head of unit on 14 March 2013, of the reasons why the head of unit did not intend to make a proposal to the AECCE to the effect that her contract as a member of the temporary staff should be renewed, namely, at least according to the applicant, that it considered her performance inadequate for the requirements of her post (see Bianchi v ETF, F‑38/06, EU:F:2007:117, paragraph 66).

54 As to the reasons initially given by the head of unit, based on the proposal submitted to the AECCE, and notwithstanding that the AECCE subsequently gave further reasons in the contested decision, and the decision rejecting the complaint, the applicant acknowledges that she discussed this subject with her head of unit on 14 March 2013, and thus had the opportunity to challenge his perception of her performance, and the probability of its improving over time so as to meet the needs of the Agency. It follows that she did have an opportunity to present her point of view to her superior before the AECCE, acting on her superior’s proposal, adopted the contested decision.

55 In implementing the guidelines, the Agency must none the less ensure that the member of staff concerned is clearly informed of the purpose of the interview with his superior, so as to have a practical opportunity to make his point of view known before a decision adversely affecting him is taken with regard to the expiry of his contract of employment. Thus, although the guidelines do not require that the dialogue between the superior and the member of staff should be conducted in writing, with the consequence that the purpose of the interview can be communicated orally and by reference to the context in which it takes place, it may be more appropriate to arrange the interview in writing.

56 As to this, the applicant asserts that at the conclusion of her interview of 14 March 2013, which did not take place until late in the evening and then only on her initiative, she was not informed that the procedure relating to the renewal of her contract had commenced.

57 In this regard, it should be borne in mind that the applicant acknowledged that, at the time of that interview, she was aware of the decision of 2 October 2008 and the guidelines, particularly as she had already benefited from a renewal of her contract, on 5 May 2011, under those very guidelines. In those circumstances, it is implausible that she did not realise, at the conclusion of the interview of 14 March 2013, that the procedure relating to the renewal of her contract had commenced. Furthermore, the lateness of the interview does not affect the fact that she had a practical opportunity to make her observations to the head of unit, particularly with regard to her standard of performance and the tasks associated with her post, before the proposal relating to the renewal of her contract was sent by the head of unit to the AECCE.

58 Equally, the applicant cannot have been unaware that, if she wished, she was entitled, as expressly provided by the guidelines, to request a continuation of the dialogue with her head of unit, as reporting officer, and if appropriate with the head of unit’s superior. While it is common ground that the head of unit was on leave from 15 March 2013, there was nothing to prevent the applicant, having been made aware of the head of unit’s position as to the renewal of her contract, from arguing her case further, for instance by making oral or written observations to the executive director, in his capacity as the AECCE which was to adopt the contested decision, with a view to dissuading the executive director from following the head of unit’s proposal.

59 It should be added in this regard that eight days passed between the date of the interview between the applicant and her head of unit and the date of the contested decision. During that period the applicant remained able to supplement what she had already said about her point of view in writing (see, by analogy, Sopropé, C‑349/07, EU:C:2008:746, paragraphs 49 to 52, and Kamino International Logistics, C‑129/13, EU:C:2014:2041, paragraph 33).

60 Furthermore, a reading of the applicant’s complaint shows that she had properly understood the contested decision, despite the terse nature of the supporting reasons provided in that decision, and thus that she had been duly informed of the reasons for the head of unit’s decision not to propose the renewal of her contract (see Solberg v EMCDDA, F‑124/12, EU:F:2013:157, paragraph 34).

61 It follows from all of the foregoing that the Agency did not infringe the applicant’s right to be heard before the contested decision was adopted, particularly since the decision did not relate to the termination of a contract for a fixed period, but to the optional renewal of such a contract (as to the relationship between the scope of the right to be heard and the nature of the adverse act, see Bui Van v Commission, T‑491/08 P, EU:T:2010:191, paragraphs 75 to 77).

62 In any event, according to the case-law, even if there has been an infringement of the right of defence, there is the further requirement, if the plea is to succeed, that, had it not been for that irregularity, the outcome of the procedure might have been different (Wunenburger v Commission, T‑246/04 and T‑71/05, EU:T:2007:34, paragraph 149 and the case-law cited).

63 In this regard, the Tribunal observes for the sake of completeness that the applicant put forward further arguments in her complaint, to which the AECCE responded by confirming the contested decision, essentially on the ground of budgetary imperatives. It follows that, even if the applicant had taken up the opportunity she had been given to ask for a fuller dialogue with her superiors, and had thus been able to raise those arguments before the contested decision had been adopted, the outcome of the procedure would not have been different.

64 In light of the foregoing, the first part of the first plea must be rejected.

– The second part, based on infringement of an essential procedural requirement entailing an infringement of the principle of equal treatment

65 It must be observed, by way of a preliminary observation, that the time-limits set out in the guidelines are mainly intended to serve the principal objective, embodied in the decision of 2 October 2008, of ensuring that the Agency acts diligently to see that a member of the temporary staff whose contract is nearing expiry is informed, at least six months before the date of such expiry, as to the renewal (or non-renewal) of that contract, and hence that a decision in that regard can be taken in due time, so that (amongst other things) the person concerned is not caught unawares and can, where relevant, take steps to seek employment and arrange to move from his place of work to a Member State other than that where the Agency is based.

66 Furthermore, it is apparent from the headings of the sections to be completed by the head of unit that the procedure laid down in the guidelines is intended above all to obtain the head of unit’s opinion as to whether the tasks relating to the post are to evolve and whether, having regard in particular to the way in which the member of staff has performed his tasks to date, as set out in a CDR, the member of the temporary staff occupying the post merits the continuation of his employment by the ERA in that post, thus justifying the renewal of his contract. As the ERA rightly emphasises, the purpose of the information gathered in this process is to determine whether the member of staff whose contract of employment is due to expire can or should continue to be employed in that post, which, however, necessarily presupposes that the post will be included for budget purposes, in future, in the Agency’s establishment plan.

67 It should also be pointed out that, according to the case-law, where there is a failure to observe the indicative time-limits set out in the guidelines, there is still the further requirement that this irregularity be capable of having affected the content of the contested decision (Wunenburger v Commission, EU:T:2007:34, paragraph 149 and the case-law cited).

68 In this regard, in relation first of all to the fact that the procedure for renewal of her contract was not commenced until 22 February 2013, some 20 days late according to the schedule set out in the guidelines, the applicant has not shown how this delay had an impact on the content of the contested decision.

69 Secondly, in relation to the fact that the HR department was not asked for its opinion until after the contested decision had been adopted, it is apparent from the guidelines that the purpose of consulting that department is not to assess the merits of the member of staff concerned or the appropriateness, from the Agency’s point of view, of renewing the contract concerned. The guidelines go no further than to state that the HR department ‘may’ add any comments to the file note, particularly as to the budgetary implications of the head of unit’s proposal and its consistency with existing practices on prolongation of contracts within the Agency. Thus, in a case such as the present, the HR department might not add any comment on the proposed decision, given that it would not have any budgetary implications for the ‘expenditure’ section of the Agency’s budget for the year to come, and corresponded to the abolition of a post by the budgetary authority. Furthermore, there is nothing to indicate that, if the HR department had filled in the part of the form intended for its use before the contested decision was adopted, it would have had any comments to make.

70 In a situation such as that of the present case, where the post in question is to be abolished, the budgetary impact of a proposal not to renew the contract of the person occupying that post as a member of the temporary staff, considered in terms of expenditure within the Agency’s operating budget, is, as the ERA argues, effectively neutral, since such a decision merely confirms that budget allowances which have been withdrawn in relation to the next financial year will not be spent. On that basis, it would not have affected the content or, therefore, the legality, of the contested decision if the HR department had been asked for its opinion, even if this had been done within the indicative time-limits laid down by the guidelines.

71 Thirdly, as to the argument based on the alleged infringement by the AECCE of the principle of equal treatment, this must be rejected on the basis, first, that the AECCE stated the reasons (namely, budgetary reasons connected with the abolition of the post) why it had not adhered scrupulously to the procedure or indicative time-limits set out in the guidelines and, secondly, that the contract of a member of staff who was in a situation comparable to that of the applicant was also allowed to expire.

72 It follows from the foregoing that the second part of the first plea, and, accordingly, the plea as a whole, must be rejected.

The second plea in law: manifest errors of assessment

Arguments of the parties

73 First of all, the applicant maintains that, in asserting that the post she occupied had been created only so as to enable her to gain experience outside the area of finance, the AECCE made a manifest error of assessment since the actual purpose of the applicant’s transfer, effected at her request, was also — in fact primarily — to enable the unit to which she was ultimately assigned to benefit from her abilities in financial matters. The applicant thus contests the proposition that the abolition of her post was the option with least operational impact on the functioning of the Agency.

74 The applicant also contests the proposition that the ERA was obliged to abolish her post in order to meet the objectives fixed according to the budgetary and financial outlook. In this regard, noting that the Agency made provision in its 2013 budget for the creation of two administrator’s posts, she is critical of the fact that the effort to abolish three posts was concentrated entirely on posts in function group AST. She goes on to point out that while the Commission, in its opinion on the Multi-Annual Staff Policy Plan for 2014-16, had indeed recommended a 2% reduction in staff, it had also identified a decline in the percentage of posts provided for by the establishment plan which were actually occupied, in that only 139 of 144 Agency posts were occupied. As the ERA had had between four and six posts unoccupied since 2010, it could have abolished one of those posts rather than that of the applicant. Finally, the applicant maintains that what the budgetary constraints required to be abolished were posts in grades AST 1 and AST 2. As she occupied a post in grade AST 3, and in fact AST 4 from 6 September 2013, her post ought not to have been affected.

75 Furthermore, the applicant maintains that the executive director could not, on his own initiative, alter the Agency’s establishment plan, which fixes the number of authorised posts according to function group and grade in respect of each budget year. She argues that only the administrative board had that power.

76 The Agency submits that the plea should be rejected as unfounded.

Findings of the Tribunal

77 It should be pointed out that the decision as to whether or not to renew a temporary staff contract made for a fixed period falls within the wide discretion enjoyed by the AECCE in such matters, and consequently that, in reviewing the legality of such a decision, the scope of the review carried out by the Courts of the European Union, leaving aside its review of the obligation to state reasons, is limited to verifying that there has been no manifest error in taking account of the interests of the service, and no misuse of powers on the part of the AECCE (see Bianchi v ETF, EU:F:2007:117, paragraphs 92 and 93 and the case-law cited).

78 In this regard, an error may only be characterised as manifest when it is easily recognisable and can be readily detected, having regard to the criteria to which the legislature intended to make the exercise of the administration’s discretion subject. It follows that, in order to establish that the administration has made a manifest error in assessing the facts, of such a kind as to justify the annulment of a decision taken on the basis of that assessment, the evidence, which it is for the applicant to adduce, must be sufficient to make the findings of the administration implausible. In other words, a plea based on manifest error must be rejected if, despite the evidence produced by the applicant, the assessment in question can still be regarded as justified and coherent. (see AI v Court of Justice, EU:F:2012:97, paragraph 153 and the case-law cited).

79 In the present case, the contested decision does not expressly state the AECCE’s reasons for deciding not to renew the applicant’s contract. That being so, it should be noted that, since it is in the nature of the pre-litigation procedure for matters to evolve, it is the reasons given in the decision rejecting the complaint which are to be taken into consideration in examining the legality of the original act with adverse effect, those reasons being deemed to also cover that act (see Mocová v Commission, F‑41/11, EU:F:2012:82, paragraph 21). Furthermore, in relation to a decision not to renew the contract of a member of the temporary staff, the AECCE may change or substitute the reasons for the decision at the complaint stage, as it did in the present case (see Mocová v Commission, T‑347/12 P, EU:T:2014:268, paragraphs 33 to 46).

80 Against that background, in relation first of all to the budgetary reasons put forward by the ERA, the Tribunal observes that, as is apparent from the Commission’s notice to the Agency of 6 March 2013, which is annexed to the application, the ERA was obliged to abolish posts so as to meet the ‘2% objective’, and the applicant’s argument concerning the reality of that objective, in the course of which she contests the nature and scope of the budgetary imperatives to which the Agency was subject in this regard, does not reveal any manifest error of assessment on the part of the ERA in its assessment of the requirement to abolish posts.

81 Furthermore, it should be borne in mind that the organisation and operation of a service are matters for the institution alone, and the superior authority, here the executive director of the ERA, is solely responsible for the organisation of the service. It is for that authority alone to assess the needs of the service, and to assign the personnel available to it in accordance with that assessment (Labeyrie v Commission, 16/67, EU:C:1968:37, paragraph 445; Geist v Commission, 61/76, EU:C:1977:127, paragraph 38; Pitrone v Commission, T‑46/89, EU:T:1990:62, paragraph 60; and Cesaratto v Parliament, T‑108/96, EU:T:1997:115, paragraph 48).

82 The institutions and bodies of the EU are also free to organise their administrative units taking account of a whole range of factors, such as the nature and scope of the tasks which are assigned to them and the budgetary possibilities (Bellardi-Ricci and Others v Commission, 178/80, EU:C:1981:310, paragraph 19; Scheuer v Commission, T‑108/89, EU:T:1990:45, paragraph 41; Sebastiani v Parliament, T‑163/89, EU:T:1991:49, paragraph 33; and Lacruz Bassols v Court of Justice, T‑109/92, EU:T:1994:16, paragraph 88). That freedom includes the power to abolish posts and change assigned tasks, in the interests of better organisation of work or in order to meet budgetary requirements for the abolition of posts which are imposed by the political bodies of the EU. It also includes the power to reassign tasks previously carried out by the holder of the abolished post, although the abolition of the post is not necessarily subject to the condition that all of the assigned tasks can be carried out by a smaller number of people than before the reorganisation. Moreover, the abolition of a post does not necessarily presuppose that the tasks associated with it have ceased to be relevant (Cesaratto v Parliament, EU:T:1997:115, paragraphs 49 to 51).

83 Accordingly, in deciding, for budgetary reasons, to abolish two assistant’s posts, rather than administrator’s posts, and in identifying and selecting the post occupied by the applicant as one of the two whose abolition would have the least operational impact, the ERA acted within the bounds of its discretion in the matter (Karatzoglou v EAR, T‑471/04, EU:T:2008:540, paragraph 59).

84 As to the allegation that the executive director had no power to alter the Agency’s establishment plan (a matter which had not been raised in the pre-litigation phase), the applicant has not shown how, in adopting the contested decision, the executive director made a manifest error of assessment.

85 Finally, in relation to the decision of 16 February 2012 reassigning the applicant, which is annexed to the application, this is expressly stated to have been adopted in the interest of the service. It has consistently been held that the interest of the service involves taking into consideration the personal wishes of the individuals concerned, as the interest of the service and the personal situation of the employee are inextricably linked (see Ridolfi v Commission, F‑3/09, EU:F:2009:162, paragraph 47). It is certainly true that the ERA stated, in the decision rejecting the complaint, that the decision reassigning the applicant had been made at her request, probably for the sake of simplicity and so as to emphasise that it was due to a reassignment made at her request that she had come to occupy a post which was later abolished.

86 However, the Applicant has not explained how the statement, in the decision rejecting the complaint, that it was she who had requested a reassignment to the post which was later abolished, constitutes a manifest error of assessment, or how such an error in relation to the reassignment decision of 16 February 2012, the legality of which is not at issue in this case, could have tainted the contested decision, or the decision rejecting the complaint, given that the subject-matter of those decisions — namely the non-renewal of her contract as a member of the temporary staff — was different.

87 In any event, it is apparent from the decision rejecting the complaint that the AECCE’s reasons for the decision not to renew were essentially budgetary, and that its reference to the applicant’s standard of performance was only incidental. Accordingly, even if, in the course of her employment in the ‘executive director’s office’, the applicant had carried out more of the financial and administrative support tasks at which she claims to be more accomplished, and which were still shown as such in her post description, which had not yet been updated by her head of unit so as to orient it more towards communications tasks, this would not have affected the AECCE’s entitlement to decide, as it did, to abolish the post which the applicant occupied, on the ground that the abolition of that particular post would involve the least operational impact on the functioning of the Agency.

88 It follows from the foregoing considerations that the second plea in law must be dismissed.

The third plea in law: breach of the ERA’s duty to have regard for the welfare of its employees

Arguments of the parties

89 In support of her claim that the AECCE breached its duty to have regard for her welfare, and while acknowledging that the interest of the service takes precedence over the interests of officials, the applicant asserts that her interests should at least have been taken into consideration at the time of the decision not to renew her contract. She also states that she was perplexed by the reference to AI v Court of Justice (EU:F:2012:97) in the decision rejecting her complaint, as she had given the AECCE no reason to be dissatisfied. This, she says, is shown by the fact that she was promoted in September 2013. The applicant concludes that, in deciding not to renew her contract purely on the basis that her post was to be abolished, without considering her merits as a member of the temporary staff or whether she could be transferred to another post, the AECCE failed to take her welfare into account and thus infringed its duty.

90 The ERA contends that the plea should be rejected, while disputing the allegation that it did not consider the possibility of transferring the applicant to another post. It asserts that the executive director did consider whether that was possible, but noted that no posts in function group AST were to be created in the near future, and that it was not possible to transfer the applicant back to her previous post. The ERA contends that, in so doing, the executive director went beyond what was required by AI v Court of Justice (EU:F:2012:97). In any event, it argues that the applicant has not shown what functions were required to be fulfilled within the Agency in order to enable her contract to be renewed, which in the circumstances would have been for an indefinite period.

Findings of the Tribunal

91 It should be pointed out that, while the Conditions of Employment provide for the possibility that contracts of members of the temporary staff will be renewed, this is not a right but only a possibility, and is a matter for the discretion of the competent authority. According to the settled case-law referred to above, the institutions enjoy a broad discretion to organise their departments in keeping with the tasks entrusted to them and to assign the staff available to them in the light of such tasks, on condition, however, that they are assigned in the interests of the service (Nebe v Commission, 176/82, EU:C:1983:214, paragraph 18; Lux v Court of Auditors, 69/83, EU:C:1984:225, paragraph 17; and Potamianos v Commission, T‑160/04, EU:T:2008:438, paragraph 30).

92 Furthermore, in contrast to the provisions applicable to officials, a member of the temporary staff, who has been engaged for a fixed period and whose contract is nearing expiry, has no right of priority permitting him, after his employment has come to an end, to be reinstated in any other post in his function group which may become vacant or be created in the institution or agency which had employed him (see ETF v Michel, T‑108/11 P, EU:T:2013:625, paragraph 88).

93 By virtue of its duty to have regard for the welfare of its employees, the competent authority is none the less required, when assessing the interest of the service with a view to adopting a decision as to whether or not to renew the fixed-term contract of a member of the temporary staff, to take into consideration all the factors which may affect its decision, in particular the interests of the person concerned. However, the taking into consideration of the personal interests of the staff member concerned does not extend so far as to prevent the competent authority from not renewing a fixed-term contract despite the opposition of that staff member, if the interests of the service demand it (Klug v EMEA, F‑35/07, EU:F:2008:150, paragraph 79). Furthermore, in the case of an agency, regard must be had to the particular context in which EU agencies operate generally, characterised amongst other things by the fact that they have a limited number of staff available, and are subject to specific operation constraints (see ETF v Schuerings, T‑107/11 P, EU:T:2013:624, paragraphs 97 and 100).

94 In the present case, the contested decision does not expressly state the reasons on which it is based. However, it is apparent from the decision rejecting the complaint that the AECCE considered the applicant’s interest in having her contract renewed, which, as it happened, would have been for an indefinite period. From that standpoint, it explained why it was unable to reassign the applicant to another post which was vacant or would become vacant in the near future.

95 Accordingly, and particularly in a context of EU-wide policy requirements for institutions and agencies to reduce staff numbers gradually from year to year, it cannot be said that the AECCE breached its duty to have regard for the welfare of employees by deciding, by reason of the abolition of posts in its budget, including the post hitherto occupied by the applicant, not to renew her contract for an indefinite duration.

96 This is particularly so in circumstances where the service record of the person concerned does not, in any event, indicate any particular merit in performing the tasks which had most recently been assigned. It is apparent from the case-law to which the AECCE referred in the decision rejecting the complaint, in connection with the secondary ground, that the taking into consideration of the personal interests of a staff member whose performance in the post is judged to be unsatisfactory does not extend so far as to prevent the competent authority from not renewing a fixed-term contract despite the opposition of that staff member, if the interests of the service demand it (Klug v EMEA, EU:F:2008:150, paragraph 79; AI v Court of Justice, EU:F:2012:97, paragraphs 167 and 168; and Solberg v OEDT, EU:F:2013:157, paragraph 45).

97 In the present case, while the assessments contained in the applicant’s 2012 CDR cannot be taken into consideration, as that CDR was drawn up after the contested decision, it is apparent from the documents provided by the Agency that the applicant had not demonstrated any particular merit in the performance of her tasks, and indeed that this fell short of the superior’s expectations. In light of the above, the fact that the applicant’s service record was not especially satisfactory could, as the Agency has argued, constitute a further reason, in addition to that referred to in paragraph 83 of this judgment, for selecting the post she occupied as one of the two which were to be abolished so as to meet the budgetary requirements, thus justifying the non-renewal of her contract.

98 It follows from the above that the third plea must be rejected.

99 As none of the applicant’s three pleas has succeeded, the action must be dismissed.

Costs

100 Under Article 87(1) of the Rules of Procedure, without prejudice to the other provisions of Chapter 8 of Title 2 of those rules, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Under Article 88 of the Rules of Procedure, however, a party, even if successful, may be ordered to pay some or all of the costs, if this appears justified by the conduct of that party, including before the proceedings were brought, especially if he has made the other party incur costs which are held to be unreasonable or vexatious.

101 For the reasons set out in this judgment, the applicant has been unsuccessful in her action. Furthermore, in its pleadings, the ERA has expressly applied for the applicant to be ordered to pay the costs. However, in the circumstances of the case it is appropriate to make an order under Article 88 of the Rules of Procedure, as the Agency could have conducted the renewal procedure relating to applicant’s contract in a more diligent and transparent manner. Accordingly, it should be declared that the ERA is to bear its own costs and it should be ordered to pay half of those incurred by applicant.

On those grounds, THE CIVIL SERVICE TRIBUNAL (Third Chamber) hereby:

1. Dismisses the action.

2. Declares that the European Railway Agency is to bear its own costs and orders it to pay half of the costs incurred by KE.

3. Declares that KE is to bear half of her own costs.

Van Raepenbusch Perillo Svenningsen Delivered in open court in Luxembourg on 10 September 2014. W. Hakenberg Registrar S. Van Raepenbusch President

( *1 ) Language of the case: French.

( i ) In accordance with the rules on the protection of personal data in the context of the General Court’s judicial functions, data which might identify the parties have, by decision of the Registrar, been redacted in the public version of the judgment.