Opinion No 7/2002 of the Court of Auditors of the European Communities on a proposal for a Council Regulation introducing special measures to terminate the service of European Parliament officials and temporary staff working in the Political Groups
Date: 2002-07-17
Institutions: European Court of Auditors
Subjects: European Parliament, early retirement, equal treatment, pension scheme, recruitment, regulations for civil servants, servant (EU), termination of employment

1.10.2002

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Official Journal of the European Communities

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OPINION No 7/2002

of the Court of Auditors of the European Communities on a proposal for a Council Regulation
introducing special measures to terminate the service of European Parliament officials and
temporary staff working in the Political Groups

(2002/C 236/03)

EXPLANATORY MEMORANDUM

On 20 March 2002 the Commission presented a proposal for a
Council Regulation introducing special measures to terminate the
service of European Parliament officials and temporary staff work-
ing in the Political Group (1).

In a letter received at the Court on 11 April 2002 the Council
requested the Court’s opinion on this proposal.

The purpose of the proposal is to authorise a termination-of-
service scheme, between 2002 and 2004, for 100 Parliament offi-
cials and 24 temporary staff working in the Political Groups in
order to take account of the need to renew professional skills.

The Court has examined the proposal and issued the present
opinion, based on the following reasons:

1. According to the explanatory memorandum to the proposal,
the termination-of-service scheme for 100 officials and 24 tem-
porary staff would make it possible for 47 new officials and 11
new temporary staff to be recruited with a neutral impact on the
budget, as the cost of the recruitment would be balanced by the
savings generated by the scheme. No indication is given about
how the figures of 100 officials and 24 temporary staff have been
established.

2. According to the proposal, the termination-of-service scheme
relates to officials and temporary staff who have reached the age
of 55 and have completed at least 15 years’ service. The proposal
provides for a termination-of-service allowance corresponding,
on average, to 62,5 % of the basic salary.

3. The annual savings and costs set out in the financial statement
annexed to the proposal summarise for both ‘departures’ and
‘arrivals’ the main salary costs and revenue charged to the budget
each year.

(1) COM(2002) 136 final of 20 March 2002.

4. The calculations have been made using the same methods as
for the proposal relating to the Commission’s officials. The Court
considers that the way in which the direct budgetary impact is
presented is essentially reasonable. Nevertheless, the increase in
future pension costs due to the appointment of the new staff
seems not to have been taken into consideration.

5. The budgetary savings will be achieved by not filling a part of
the posts made free through the early retirements and by recruit-
ing, for the remaining posts, officials and temporary staff in lower
career brackets and remuneration grades. The proposal does not
explain which budgetary mechanisms will be used to ensure that
the savings will be safeguarded in the long term.

6. Temporary staff are engaged on the basis of contracts for a
fixed period or of contracts for an indefinite period that can be
terminated at the end of a period of notice. A temporary staff
contract does not grant a right to employment until the age of
retirement. The preamble to the proposed regulation does not
explain why the contracts of temporary staff whose skills are
deemed not to correspond to the duties to be performed are not
terminated.

7. The proposed termination-of-service scheme (in fact, an early
retirement scheme) appears to conflict with the employment
policy objective, proposed by the Commission and adopted by
the Council (2), of increasing the employment rate of older work-
ers (aged 55 to 64). At its meeting of 15 and 16 March 2002 in
Barcelona, the European Council confirmed this objective and
recommended increasing opportunities for older workers to
remain in the labour market, for instance, through flexible and
gradual retirement formulas.

(2) Council Decision of 18 February 2002 on guidelines for Member
States’ employment policies for the year 2002 (2002/177/EC) and
Council Recommendation of 18 February 2002 on the implementa-
tion of Member States’ employment policies (2002/178/EC), both
published in OJ L 60, 1.3.2002.

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8. According to the fourth recital of the preamble to the pro-
posed regulation ‘the skills of some officials …, particularly old
members of staff, are deemed not to be in line with the duties to
be performed’. This is the reason why they should benefit from
an early retirement scheme. The targeted group of 100 officials
consists of senior officials in grade A3/LA3 (Head of Division,
normally charged with management tasks), senior officials in
grade A4/LA4 and officials in the B, C, and D categories who have
achieved the highest grade in their category. This shows that an
improvement of the staff management policy is needed.

13. Aware of the need of having an adequate monitoring system
of human resources to ensure a necessary and regular renewal of
staff, the Court notes that the proposal included in the draft staff
regulations’ reform (1) to make termination-of-service conditions
easier after 55 years of age would fit better in requirements of
flexibility and sound financial management at a lower budgetary
cost (2). The implementation of the abovementioned scheme is
likely to reduce in the future the use of early retirement proce-
dures.

9. An allowance corresponding to 62,5 % of the basic salary
would probably allow, in certain cases, a fairly good living stan-
dard. Furthermore, a beneficiary of a termination-of-service allow-
ance will be free to take up a new occupation to make up for the
loss of a part of the basic salary. This could make the termination-
of-service allowance attractive to well performing staff.

10. The scheme would fail to meet its objectives if it were also
applied to well performing officials attracted by the financial con-
ditions offered. The Court takes note of the fact that no appropri-
ate and clear selection criteria are established

THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Commu-
nity, and in particular Article 283 thereof,

Having regard to the Commission proposal of 20 March 2002 (3),

Having regard to the Council’s request for an opinion on this pro-
posal, received at the Court on 11 April 2002,

HAS ADOPTED THE FOLLOWING OPINION:

11. The implementation of the scheme should ensure that staff
who are able to update their skills are fairly treated.

1. The increase in future pension costs due to the appointment
of the new staff seems not to have been taken into consideration.

12.
In connection with considerations on flexible retirement Mr
Jan O. Karlsson, the former President of the Court, noted in a let-
ter of 10 September 2001 to Mr Neil Kinnock, Vice-President of
the Commission, that it would be appropriate to establish a fair
and transparent pension system that gives sufficient impetus for
early retirement. It was considered that the present system for
retirement was inflexible and penalised those who wished to leave
service before the age of 60 years. In the same letter it was also
stated that ‘indeed “dégagement” is not only costly but also unfair
because financial compensations are given regardless of the num-
ber of years service. Such a system should only be used as a last
recourse (eg in the case of important reorganisations of the insti-
tutions) and the use of more economical and fairer systems such
as an attractive early retirement (ie with no reduction coefficient)
on the initiative of the organisation should also be considered’.

2. The proposal should define which budgetary mechanisms will
be used to ensure that the savings will actually be safeguarded in
the long term.

3. The preamble to the proposed regulation should explain the
coherence of the scheme with the European employment policy

(1) Document COM(2002) 213 final.
(2) This possibility that the Court has advocated all along the discussions
about the administrative reform plan is foreseen only ‘in the interest
of service, based on objective criteria and transparent procedures’ It
does not contain any ‘handshake premium’, but only aims at reduc-
ing, even in some cases, at suppressing weightings foreseen in the
staff regulations.

(3) COM(2002) 136 final of 20 March 2002.

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objective of increasing the employment rate of older workers
through flexible and gradual retirement formulas

6. The preamble to the proposed regulation should explain why
the scheme should apply to temporary staff whose contracts could
simply be terminated.

4. The Court takes note of the fact that no appropriate and clear
selection criteria are established.

5. The implementation of the scheme should ensure that staff
who are able to update their skills are fairly treated.

7. The Court is of the opinion that an early retirement system
such as the one proposed should only be a one-off solution. In
the future the focus should be on improvement of staff develop-
ment policy.

This opinion was adopted by the Court of Auditors in Luxembourg at its meeting of 17 and 18 July 2002.

For the Court of Auditors

Juan Manuel FABRA VALLÉS

President