JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber)

27 November 1997

Case T-20/96

Stephen Pascali

v

Commission of the European Communities

‛Officials — Temporary servant in the scientific and technical services — Appointment to a post under the administrative budget — Withdrawal of a decision granting an additional advancement in step for exceptional merit’

Full text in French II-977

Application for:

annulment of the Commission's decision of 26 June 1995, withdrawing its decision of 18 October 1994 granting the applicant an additional advancement in step.

Decision:

Application dismissed.

Abstract of the Judgment

As from 1 February 1985, the applicant was seconded to the Commission by British Telecom, which at that time was his employer.

On 1 December 1986 he entered the service of the Commission as a member of the temporary staff in Grade A 5, Step 3 under the research budget. He was assigned to the Directorate-General Telecommunications, Information Market and Exploitation of Research (DG XIII).

By a decision of 13 March 1990, the applicant, who was then in Grade A 5, Step 4, was awarded an additional advancement in step for exceptional merit in respect of the budgetary year 1989 pursuant to Article 97(1) of the Staff Regulations of officials of the European Communities (the ‘Staff Regulations’), applicable to members of the temporary staff in accordance with Article 10 of the Conditions of employment of other servants of the European Communities (RAA).

On 19 April 1991, the applicant was informed of the ‘reclassification’ of his post by the budgetary authority, transforming it from a temporary post falling under Article 2(a) of the RAA into a permanent post paid from the research budget [Article 2(d), RAA].

On 1 October 1991, the applicant's contract was amended, and he was classified in Grade A 4, Step 3, with effect from 1 August 1991. His seniority in step was fixed at 1 July 1990. The post in question fell under the research budget.

Following internal competition COM/T/A/92, he was entered on the list of suitable candidates, and he was notified of that fact on 16 October 1992.

By a decision of 16 May 1994 of the Director-General of DG IX (Personnel and Administration), which was notified to die applicant on 3 June 1994, he was appointed a probationary official as a Grade A 4, Step 4 principal administrator with effect from 1 April 1994, his seniority in step being backdated to 1 July 1992. He was assigned to a post in DG XIII, Unit 2, ‘Budgets, Court of Auditors’ (reporting directly to the Director-General). That post fell under the administrative budget.

The applicant reached Step 5 of his grade on 1 July 1994, under Article 44 of the Staff Regulations.

By an undated decision of the Director-General of DG XIII, notified to the applicant on 19 August 1994, the applicant and his post were reassigned, with effect from 2 April 1994, to his former unit [DG XIII, Directorate C ‘Telematics applications (networks and services)’. Unit 6 ‘Telematics networks and services applied to transport’].

Meanwhile the procedure was taking place for the grant of an additional advancement in step for the year 1994.

On 14 July 1994, the Commission adopted a decision concerning ‘promotions/amendments in classification of officials or members of the temporary staff remunerated out of research appropriations, scientific/technical services administrative service’. In the part of the decision concerning DG XIII, the applicant's name appeared under the heading Officials'.

On 18 October 1994, the appointing authority adopted a decision of which Article 1 was worded as follows:

‘Mr Stephen Pascali (Personnel No 59847 D), an official in Grade A 4, Step 5, is granted an additional step and is therefore classified in Step 6 of that grade. ’

By decision of 27 January 1995, the applicant was established with effect from 1 January 1995.

By a memorandum of 25 January 1995, referring to a ‘decision of the Promotion Committee of 14 July 1994’, two heads of unit in Directorate A ‘Personnel’ of DG IX informed the applicant's head of unit that the applicant, following his appointment under the administrative budget, could ‘no longer claim the benefit of an advancement in step’ and that ‘the situation [would be] regularized’ by means of recovery from his salary.

On 8 March 1995, a note was sent to the applicant by an official in Unit 4 ‘Remuneration and reimbursement of expenses’ of Directorate B ‘Rights and obligations’ of DG IX. It concerned the ‘withdrawal of the advancement in step’ and announced, ‘in accordance with the measure in question’, a retention of BFR 72856 from the applicant's salary as from April 1995.

The retentions from the applicant's remuneration were not carried out, but, as from March 1995, the applicant no longer received the remuneration corresponding to Grade A 4, Step 6, but that corresponding to Grade A 4, Step 5.

By letter of 30 May 1995, a head of unit in Directorate A of DG IX sent the applicant's lawyer a copy of a decision of the appointing authority dated 31 May 1995{sic), withdrawing the decision of 18 October 1994 which granted the applicant an additional advancement in step and making the amounts paid in accordance with that step subject to repayment.

That decision of 31 May 1995 was annulled and replaced by a decision of the appointing authority of 26 June 1995, worded as follows:

‘Article 1

The decision of 18 October 1994 granting Mr Stephen Pascali the benefit of an additional step with effect from 1 August 1994 is withdrawn.

Article 2

The amounts unduly paid in accordance with the additional step since 1 August 1994 are not subject to repayment.’

In the recitals in the preamble to its decision, the appointing authority acknowledged that the applicant could not have known that the sums paid were not due, and therefore acknowledged that there was no occasion to apply Article 85 of the Staff Regulations on the recovery of undue payments.

The applicant lodged a complaint against that latter decision on 27 September 1995. The complaint was impliedly rejected. After the bringing of the action, the Commission made an express rejection decision, which does not however appear on the case file.

Substance

The plea alleging infringement of the duty to state reasons

The first plea was not raised in the complaint. Nevertheless, the Court of First Instance will examine of its own motion whether the duty to state reasons was complied with. The purpose of the duty to state reasons is to enable the Community judicature to review the legality of the decision and to provide the person concerned with details sufficient to allow him to ascertain whether the decision is well founded or whether it is vitiated by an error which will allow its legality to be contested. That requirement is satisfied when the measure in question was adopted in circumstances known to the official concerned and enabled him to understand the scope of the measure taken concerning him (paragraphs 43 and 44).

See: 195/80 Michel v Parliament [1981] ECR 2861, para. 22; T-80/92 Turner v Commission [1993] ECR II-1465, para. 62; T-534/93 Grynberg and Hall v Commission [19941 ECRSC II-595, para. 59

In this case, the successive positions adopted by the Commission's departments and by the appointing authority are not without contradictions. Nevertheless, the letter of 30 May 1995 and the contested decision itself set out with sufficient clarity the reasons why that decision was taken. Inasmuch as the applicant already knew the context after receiving the notes of 25 January and 8 March 1995, that evidence as to the authority's reasoning enabled him to ascertain whether the decision was well founded. It also enables the Court to review the legality of the decision (paragraphs 45 to 47).

The second and third pleas, alleging, respectively, infringement of the principle of legal certainty and infringement of the principle of legitimate expectations

First, the applicant maintains that the withdrawn decision was adopted in the proper maruier, and that such a decision conferring rights on individuals cannot be withdrawn. Secondly, even if the withdrawn decision had not been adopted in the proper manner, the Commission failed to comply with the conditions for withdrawal, having regard to the principles of legal certainty, the protection of legitimate expectations and proportionality (paragraph 61).

It is therefore necessary at the outset to examine the legality of the measure of 18 October 1994 (paragraph 62).

That decision was adopted on the basis of Article 97(1) and (3) of the Staff Regulations. The condition for Article 97 to be applicable is that the official must be paid from appropriations in the research and investment budget (paragraph 63).

Article 97 of the Staff Regulations ceased to apply to the applicant as from 1 April 1994, the date as from which he was appointed a probationary official in the capacity of principal administrator at Grade A 4, Step 4, assigned to a post in DG XIII and paid from appropriations in the administrative budget (paragraphs 64 and 65).

The applicant's former status was not reestablished by the undated decision of the Director-General of DG XIII, notified on 19 August 1994, whereby, in the interests of the service, the assignment of the applicant and his post was ‘amended’ with effect from 2 April 1994, the applicant being assigned to his former unit in DG XIII. The wording of that decision clearly shows that it was reassigning an official, a measure which, by definition, implies a movement of the official with his post and thus excludes a change in the post, unlike a transfer measure (paragraph 66).

Although that decision thus altered the assignment of the applicant, that is to say his duties within DG XIII, the determination of which falls within the institution's internal competence in organizing its departments, it had no impact on his post itself, as established by the budget (paragraph 67).

See: T-32/92 Rasmussen v Commission [1993] ECR II-765, para. 39; C-398/93 P Rasmussen v Commission [1994] ECR I-4043, para. 14

It follows from the above that the decision of 18 October 1994 granting an additional advancement in step (Grade A 4, Step 6) was without legal basis and therefore unlawful (paragraph 70).

It therefore needs to be examined whether the Commission complied with the conditions for withdrawing an unlawful administrative measure (paragraph 71).

On that point, whilst it must be acknowledged that any Community institution which finds that a measure which it has just adopted is tainted by illegality has the right to withdraw it within a reasonable period, with retroactive effect, that right may be restricted by the need to fulfil the legitimate expectations of a beneficiary of the measure, who has been led to rely on the lawfulness thereof (paragraph 72).

See: 14/81 Alpha Steel v Commission [1982] ECR 749, paras 10 to 12; 15/85 Consorzio Cooperative d'Abruzzo v Commission [1987] ECR 1005, paras 12 to 17; C-248/89 Cargill v Commission [1991] ECR I-2987, para. 20; C-365/89 Cargill [1991] ECR I-3045, para 18

In its judgment in Case C-90/95 P de Compie v Parliament [1997] ECR I-1999, paragraph 39, the Court of Justice held that legitimate expectations as to the legality of a favourable administrative act, once acquired, may not subsequently be undermined unless there is a public-policy interest which overrides the beneficiary's interest in the maintenance of a situation which he was entitled to regard as stable. It further held (paragraphs 36 and 38) that legitimate expectations in the withdrawn measure are acquired when the addressee was entitled to have confidence in the apparent legality of the decision, the operative time for determining whether such expectations have been acquired being the date on which the measure was notified (paragraph 73).

In this case, the withdrawn decision was based on a provision, Article 97 of the Staff Regulations, which no longer applied to the applicant. It therefore had no legal basis. In those circumstances, the applicant cannot be regarded as having acquired legitimate expectations in the grant of an additional step by the decision of 18 October 1994. The administration was therefore entitled to withdraw that measure, provided it did so within a reasonable period. In that regard, a period of slightly more than two months must be regarded as reasonable, whereas a period of more than two years must be considered excessive (paragraphs 75 to 78).

See: Alpha Steel v Commission, cited above, para. 12; Consorzio Cooperative d'Abruzzo v Commission, cited above, paras 15 and 16

In the circumstances of this case, the period within which the Commission acted to withdraw the decision of 18 October 1994 must be considered reasonable (paragraph 80).

Operative part:

The application is dismissed.