JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber)

12 December 1996

Case T-137/95

Paolo Mozzaglia

v

Commission of the European Communities

‛(Officials — Former national expert on secondment — Daily subsistence allowance — Installation allowance — Place of recruitment — Reimbursement of travel expenses on taking up appointment)’

Full text in Italian II-1657

Application for:

annulment of the Commission's decision of 1 September 1994 refusing to grant the applicant the installation allowance, reimbursement of travel expenses on taking up his appointment and the daily subsistence allowance.

Decision:

Annulment.

Abstract of the Judgment

The applicant, formerly an official of the municipality of Genoa, in Italy, placed at the disposal of the Commission in Brussels as a national expert on secondment, was appointed as a probationary official at the Commission and posted to Brussels.

While on secondment the applicant continued to be remunerated by his Italian employer and maintained his residence for tax purposes in Sant'Olcese, in the Province of Genoa. Pursuant to the rules applicable to national experts on secondment, he was required to reside at his place of employment or at no greater distance therefrom than was compatible with the proper performance of his duties.

While on secondment the applicant lived near Brussels. The applicant and his wife own a house in the Province of Genoa. The applicant's wife and daughter remained in that house while the applicant was on secondment. They only moved to Brussels after the applicant had been appointed as a probationary official.

On 18 August 1994 the applicant applied for the installation allowance, reimbursement of the travel expenses payable on taking up his appointment, reimbursement of his removal expenses and the daily subsistence allowance.

The Commission rejected that request by a decision of 1 September 1994.

By decision of 10 October 1994 the Commission granted the applicant the expatriation allowance.

The applicant lodged a complaint against the decision of 1 September 1994.

The Commission rejected the complaint but determined the applicant's place of origin as Sant'Olcese.

Substance

Daily subsistence allowance

In order to determine whether an official had to ‘change his place of residence’ within the meaning of Article 10 of Annex VII to the Staff Regulations of Officials of the European Communities (Annex VII and Staff Regulations), the place of residence to be taken into account is the one where the official concerned has his centre of interests. To be entitled to the daily subsistence allowance, it is sufficient that he should be unable to continue to live at that former place of residence. That interpretation is dictated by the fact that the purpose of the daily subsistence allowance is to make up for the inconvenience resulting from the precarious nature of the employment relationship of the person concerned (paragraph 40).

See: C-43/94 P Parliament v Vienne [1995] ECR I-2441, para. 21

In order to determine the place where the official concerned has established, with the intention that it should be of a lasting character, the permanent or habitual centre of his interests, it is necessary to take account of all the circumstances which constitute that centre of interests. The place to be taken into account is therefore not necessarily the one in which the official resided immediately prior to being appointed (paragraph 41).

See: C-452/93 P Magdalena Fernández v Commission [1994] ECR I-4295, paras 22 and 23; Opinion of Advocate General Léger in Parliament v Vienne, cited above, at I-2443, para. 25

When he was recruited as a probationary official, the applicant had a residence in Sant'Olcese, where he lived on a permanent basis prior to being seconded as a national expert. Following his secondment his wife and daughter continued to live there, still on a permanent basis. Moreover, the applicant remained in permanent employment with the Municipality of Genoa at that place and also maintained stable social relations there. Lastly, the applicant returned there frequently during his secondment, thus demonstrating his intention of maintaining permanent family and social links there (paragraph 42).

In contrast, the applicant occupied a furnished residence near Brussels only for the purpose of performing his duties as a national expert on secondment (paragraph 44).

See: Opinion of Advocate General Mancini in 188/83 Witte v Parliament [1984] ECR 3465, at 3476; Opinion of Advocate General Léger in Parliament v Vienne, cited above, para. 25

It follows that the residence that must be taken into account for the purposes of Article 10(1) of Annex VII is the applicant's residence in Sant'Olcese. Following his appointment and having regard to his obligations under Article 20 of the Staff Regulations, the applicant was required to change his place of residence within the meaning of Article 10 of Annex VII (paragraph 45).

That finding is consistent with the purpose of Article 10 of Annex VII, which is intended to make up for the expense and inconvenience occasioned to an official by his precarious situation, in particular where he is required to establish provisional residence at his place of employment while maintaining, also on a provisional basis, his previous residence (paragraph 46).

See: 280/85 Mouiourakis v Parliament [1987] ECR 589, para. 9; T-63/91 Benzler v Commission [1992] ECR II-2095, para. 20

An official's situation remains precarious until he is established at the end of his probationary period (paragraph 46).

See: Parliament v Vienne, cited above, para. 27

Moreover, before the applicant was established he was not entitled to reimbursement of the expenses incurred in moving from Sant'Olcese to Brussels (paragraph 47).

See: Opinion of Advocate General Léger in Parliament v Vienne, cited above, para. 31

In order to be entitled to the payment in question the person concerned must establish (a) that his residence at his place of employment was provisional, in that he occupied it only in order to perform the duties associated with his secondment, for a specific period, by his employer in his country of origin; (b) that he maintained his former residence at the place where he has his centre of interests in his country of origin; and (c) that owing to his appointment he is no longer able to live in that former residence (paragraph 48).

The contested decision is annulled in so far as it refuses to grant the applicant the daily subsistence allowance referred to in Article 10 of Annex VII to the Staff Regulations (paragraph 49).

Installation allowance

The first subparagraph of Article 5(1) of Annex VII provides that to be entitled to an installation allowance an official must meet one of the two alternative conditions set out therein, that is to say he must qualify for the expatriation allowance or he must furnish evidence of having been obliged to change his place of residence in order to comply with Article 20 of the Staff Regulations (paragraphs 50 and 51).

The applicant receives the expatriation allowance, which was granted by a decision of the Commission which has become final. He is therefore entitled to the installation allowance (paragraphs 53 and 54).

In order to be so entitled an official is not additionally required to show that he has had to change his residence (paragraph 54).

Nor is the official concerned required to show the existence of actual expenses (paragraph 55).

See: 140/77 Verhaaf v Conunission [1978] ECR 2117; Opinion of Advocate General Sir Gordon Slynn in 90/81 Burg v Court of Justice [1982] ECR 983, at 995; T-42/89 Yorck von Wartenburg v Parliament [1990] ECR II-31, paras 21 to 23

The installation allowance is awarded to an established official but not to a probationary official. It follows that in the most frequently occurring case, that of a probationary official who is subsequently established, that official is already ‘installed’, at least on a provisional basis, at his place of employment in order to comply with Article 20 of the Staff Regulations. The installation allowance is intended to make up for the expenses associated with the situation of a duly established official who passes from a precarious status to a permanent status and must therefore enable himself to live in and become integrated into his place of employment in a permanent and lasting manner for an indeterminate but substantial period of time. It is reasonable to assume that an official who is thus required to establish a permanent residence in such circumstances will incur certain additional expenditure, in particular in arranging appropriate accommodation for a long-term stay, which he did not have to incur while his situation remained precarious (paragraph 56).

See: Verliaaf v Commission, cited above, para. 18

The contested decision is annulled in so far as it refuses to grant the applicant the daily subsistence allowance.

Reimbursement of travel expenses on taking up an appointment

The concept of ‘centre of interests’ for the purpose of determining the place of origin within the meaning of Article 7(3) of Annex VII has a broad meaning and refers to the place where the official maintains his principal family links, his economic links or his civic interests, without necessarily having his residence there. On the other hand, the ‘place of recruitment’ within the meaning of Article 7(l)(a) of Annex VII is the place where the official has his habitual residence when he is recruited (paragraph 64).

See: Bender v Commission, cited above, para. 24

In this case the permanent nature of the applicant's residence in Sant'Olcese as compared with the precarious nature of his residence in Brussels justifies regarding the former as his habitual residence within the meaning of the provisions in question (paragraph 64).

The Commission therefore infringed Article 7(l)(a) of Annex VII by refusing to reimburse the applicant's travel expenses on taking up his appointment (paragraph 66).

The claims for financial relief

The Court, in the exercise of its unlimited jurisdiction, allows the applicant's claims.

Operative part:

The Commission's decision of 1 September 1994 is annulled in so far as it refuses to grant the applicant the installation allowance provided for in the first subparagraph of Article 5(1) of Annex VII to the Staff Regulations, reimbursement of travel expenses on taking up his appointment as provided for in Article 7(1) (a) of Annex VII and the daily subsistence allowance provided for in Article 10(1) of that Annex.

The Commission is ordered to pay the applicant the installation allowance, the travel expenses on talcing up his appointment and the daily subsistence allowance, together with interest at the rate of 8% per annum from the dates on which those amounts became payable pursuant to Annex VII to the Staff Regulations.