CELEX: 61981CC0035
Language: en
Date: 1981-10-29 00:00:00
Title: Opinion of Mr Advocate General Capotorti delivered on 29 October 1981. # Henri Étienne v Commission of the European Communities. # Officials - Reference period for calculating pension. # Case 35/81.

OPINION OF MR ADVOCATE GENERAL CAPOTORTI
      DELIVERED ON 29 OCTOBER 1981 (
            1
         )
      
         Mr President,
      
      
         Members of the Court,
      
      
               1. 
            
            
               The problems raised in this case concern the Community pension scheme and, more particularly, certain detailed rules for the application of the benefits which Article 11 (2) of Annex VIII to the Staff Regulations confers on those who enter the service of the Communities after leaving the service of a government administration, a national or international organization or an undertaking. It is common knowledge that anyone in that position “shall have the right, on becoming established with that Community, to pay to it either: the actuarial equivalent of retirement pension rights acquired by him in the government administration, national or international organization or undertaking; or the sums repaid to him from the pension fund of the government administration, organization or undertaking at the date of his leaving its service” (emphasis added). The second subparagraph of Article 11 (2) provides that “in such case the institution in which the official serves shall, taking into account his grade on establishment, determine the number of years of pensionable service with which he shall be credited under its own pension scheme in respect of the former period of service, on the basis of the amount of the actuarial equivalent or sums repaid as aforesaid” (emphasis added).
               The central issue in this dispute consists in ascertaining what is the “grade on establishment” which must be taken into account in the case of a person who began to work for the European Economic Community in a given grade before the entry into force of the Staff Regulations on 1 January 1962 and who, in the meantime, having attained a higher grade, has become established in that grade pursuant to Article 102 of the Staff Regulations. That article provides that “a servant of the Communities who is occupying a permanent post in one of the institutions of the Communities when these Staff Regulations enter into force may, by decision of the appointing authority, be established in the grade and at the step and in the scale of remuneration laid down by these Staff Regulations corresponding to the grade and step expressly or impliedly accorded him before these Staff Regulations were applied to him”, provided that he satisfies the requirements of Article 28 (a), (b), (c), (e) and (f), has been in the service of the Communities for more than six months when the Staff Regulations entered into force and has not been the subject of any unfavourable report by the Establishment Board provided for by Article 102 (the last two requirements are inapplicable to servants in Grades A 1 and A 2).
            
         
               2. 
            
            
               I shall give a brief summary of the facts. Henri Etienne took up his duties on 27 October 1958 in the Industrial Affairs Division of the Commission's Directorate-General for the Internal Market. He was recruited in Grade A 6. On 12 April 1960, he was appointed Deputy Chef de Cabinet to a Member of the Commission and placed in Grade A 3 as from 1 May of the following year. He therefore became established in that grade when the system established by the Staff Regulations entered into force (1 January 1962 as I have already recalled). In 1980, after the Luxembourg legal system had finally made it possible (by a law of 14 March 1979) to transfer to the Community the pension rights acquired under a national contributory pension scheme, Mr Etienne exercised the option provided for by Article 11 (2) of Annex VIII to the Staff Regulations on the basis of his previous service (from 1954 to 1958) when he was in the employment of an undertaking whose registered office was situated in the Grand Duchy. By decision of 17 April 1980, the Commission's Personnel Division permitted the applicant to transfer to the Community pension scheme the national pension rights which he had acquired and it laid down that the relevant date for calculating those rights was 1 January 1962. Mr Etienne was convinced that the relevant time was the date of his entry into service (October 1958) and lodged a complaint against that decision which was rejected. Consequently, he has instituted proceedings against the Commission for the annulment of the decision rejecting his complaint.
            
         
               3. 
            
            
               The positions of the parties are therefore as follows: the applicant argues that the “grade on establishment” to be taken into account for the purposes of Article 11 (2) of Annex VIII is Grade A 6 in which he was placed as from 27 October 1958, the date on which he began to work for the Commission. The Commission on the other hand maintains that the correct point of reference is Grade A 3, the applicant's grade on 1 January 1962 when he became established. If the applicant's argument were accepted, the period to be credited for the purposes of the Community pension would, as a result of the transfer of the rights acquired by him when he was in the employment of the national undertaking, be 17 months instead of 10 months and 20 days, the period calculated on the basis of the defendant's argument. To explain the difference, it must be borne in mind that under the third paragraph of Article 3 of the General Provisions adopted to give effect to the aforesaid Article 11 (2) of Annex VIII, the number of years of pensionable service to be taken into consideration is calculated by converting the sum transferred into notional years of service, which are then converted into years of pensionable service under the Staff Regulations on the basis of the annual basic salary corresponding to the grade on establishment.
               
               The applicant founds his case on the contention that his position before the entry into force of the Staff Regulations was equivalent to that of an established official. However that argument strikes me as untenable. Article 246 (3) of the EEC Treaty and Article 212 to which it refers (subsequently replaced by Article 24 (1) of the Merger Treaty) provides that the Council must lay down the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the Communities, but Article 246 (3) provides that until then “each institution shall recruit the staff it needs and to this end conclude contracts of limited duration”. That distinction between the contractual system applied before the Staff Regulations entered into force and the system subsequently established by the Staff Regulations is therefore quite clear. It implies that before the entry into force of the Staff Regulations, the Communities could not have any established officials. Permanent establishment of the employees of a public administration is in fact conceivable only on the basis of a legislative measure adopted under public law and regulating the positions and careers of the staff.
               The applicant contends that he was engaged under a contract for an indefinite period. That cannot however raise a presumption that he was engaged on a permanent basis in view of the fact that such a situation would have been incompatible with Article 246 (3) of the EEC Treaty. This Court has already made that clear in its judgments of 15 July 1960 in Cases 43, 45 and 48/59, Lachmüller and Others [1960] ECR 463 and of 14 December 1961 in Case 12/61 Gorter [1961] ECR 271. After stating that the abovementioned provision precluded the creation, prior to the establishment of the Staff Regulations, either expressly or by implication, of permanent employment realtionships, the Court also held that servants of the Communities had in the period before the entry into force of the Staff Regulations no legitimate expectation that the Staff Regulations would be applied to them. If the Community institutions have none the less concluded contracts of employment for an unlimited duration, they have done so, according to the Lachmüller judgment, because at the time the needs of the various departments which were then being set up were unforeseeable and therefore it was difficult to determine in advance the duration of contracts of employment. The Court went on to say that on no account could such contracts raise a legal presumption that there was a common intention between the parties to create a permanent employment relationship, in view of the fact that such an intention would have been manifestly contrary to the rule laid down by Article 246 (3).
               It should however be observed that the members of staff engaged prior to the entry into force of the Staff Regulations under contracts for an unspecified period did not enjoy any guarantee of security. The institution could at any time terminate the employment relationship simply by giving one month's notice in accordance with the provisions generally included in contracts of employment. In the present case, by letter of 3 December 1958, the Commission expressly drew the applicant's attention to the fact that “at the present stage of the organization of the Community, this engagement can be only provisional in nature”. That should have been sufficient to dispel any ambiguity which may have resulted from the so-called “avis d'entrée en fonctions” (notice relating to the taking up of duties) of 19 November 1958 in which the applicant was described as “an official” (see Annex VII to the originating application). The use of that term may easily be explained if it is borne in mind that it was the practice of the Community's departments at the time to refer to the terminology of the ECSC Staff Regulations in which the concept of “temporary officials” was used (in Article 2 (3)).
               Nor could the applicant derive any assistance ex post from the de facto security which he ultimately enjoyed for the entire duration of his service prior to the entry into force of the Staff Regulations. That cannot be treated as equivalent, either in law or in fact, to the position of an established official. It is clear that under Article 102 of the Staff Regulations, servants engaged under contract became established by means of a procedure providing for the individual assessment of each servant which thus altogether precluded automatic establishment.
            
         
               4. 
            
            
               Another argument adduced by the applicant is that the time from which he began to benefit from the Community's pension scheme coincides with his entry into the service of the Community and thus precedes his establishment. However, that reasoning cannot, in my opinion, have any bearing on the determination of the date to be taken into account, for the purposes of Article 11 (2) of Annex VIII, in order to calculate the number of years of pensionable service to be credited in respect of the former period of service. We know that during the period prior to the entry into force of the Staff Regulations, servants of the European Economic Community, whilst already covered by a Community social security scheme, were not entitled to transfer their national pension rights to it. They were granted that option for the first time under the Staff Regulations in 1962. In making provision for it, the Community legislature was free to lay down the relevant detailed rules and, in particular, to take as a basis for the abovementioned calculation a reference date other than that on which it had accorded the benefit of its pension scheme to servants engaged under the system applied before the entry into force of the Staff Regulations. For the purpose of interpretation, therefore, there is no logical reason to treat as a single entity two concepts which the Community intended to distinguish (namely, establishment and relevant grade on establishement on the one hand, and on the other the date on which enjoyment of affiliation to the Community pension scheme began).
               The applicant also relies on the fact that he ceased to be affiliated to the national pension scheme when he entered the service of the Community. In that connection, it is worth noting that prior to the entry into force of the Staff Regulations, those concerned had the option of maintaining their affiliation to a national pension scheme. Consequently, quite apart from any other argument, I consider that it would be scarcely reasonable to make the determination of the relevant date depend on an individual's freedom of choice, for the purposes of the calculation to which I have referred above.
            
         
               5. 
            
            
               In my opinion, the correct interpretation of the provisions applicable in the case in point necessarily entails the rejection of the applicant's argument. First, the context of Article 11 (2) of Annex VIII shows that the “grade on establishment” to be taken into account is that in which the official finds himself on becoming established, that is to say at the time when he may exercise the option contained in that provision. The third paragraph of Article 3 of the Implementing Provisions provides further evidence in support of that point by referring to the “grade on establishment”. Secondly, according to Article 246 (3) of the EEC Treaty, no “permanent appointment” or “establishment” whatsoever was conceivable before the entry into force of the Staff Regulations of Officials. I would add that, as regards security of employment (and in many other respects), the introduction of the provisions of the Staff Regulations has undoubtedly brought about a radical innovation in the Community's previous employment relationships. It would have been possible to endow the new system with retroactive effect only if the Staff Regulations had made express provision for it. However, no provision of the Staff Regulations permits the administration to assign “establishment” to a date earlier than 1 January 1962 for the purposes of Article 11 (2) of Annex VIII.
            
         
               6. 
            
            
               It is still necessary to consider the alleged discrimination from which the applicant claims to have suffered by comparison with the officials engaged after the entry into force of the Staff Regulations, inasmuch as in his case alone the grade taken into account for the purposes of the calculation provided for by Article 11 (2) of Annex VIII differs from that accorded at the time of engagement. In that connection, I would observe to begin with that the two situations are not comparable, so that there is lacking a necessary precondition for the existence of a prohibited discrimination between those engaged on the basis of a contractual relationship under the system applied before the entry into force of the Staff Regulations and officials engaged under the system established by the Staff Regulations. Secondly, it should be noted that an official embarking upon his probationary period with the Community may not, in the event of a favourable outcome, be established in a grade corresponding to a higher career-bracket than the one in which he was placed at the commencement of his probationary period. Accordingly, a situation comparable to that of the applicant who, after being established in Grade A 3 claims to rely, for the purposes of which we are aware, on Grade A 6 accorded to him more than three years prior to his establishment, can never arise in favour of an official engaged under the system laid down by the Staff Regulations.
            
         
               7. 
            
            
               The applicant argues, in the alternative, that when the Commission adopted the contested decision, it was no longer empowered to reject his complaint, since the application submitted by him on 23 April 1980 to obtain a certificate of establishment as from 1958 had been accepted. The Commission official responsible for drawing up certificates intended for the bodies administering national pension schemes with a view to the transfer of pension rights acquired thereunder by Community officials, gave 1 October 1958 as the date of Mr Étienne's establishment. It must however be borne in mind that the certificate was not a measure taken in relation to the applicant nor was it designed to introduce any innovation in relation to his legal position. It merely constituted recognition of a preexisting situation, and its function was to notify that situation to a national social security institution. On no account, therefore, could it take on the character of a decision designed to create rights in favour of the applicant.
               Secondly, it should be borne in mind that the document in question was issued by an official who certainly did not possess, in relation to the applicant, the prerogatives of the appointing authority, within the meaning of the last subparagraph of Article 90 (2) of the Staff Regulations. For that reason too, the certificate could not have the effect of amending the date on which the applicant actually became established. Furthermore, as I have already stated, the provisions in force would not have enabled even the appointing authority to assign establishment to a date prior to the entry into force of the Staff Regulations.
               Finally, as regards the contents of the document in question, the defendant has contended at the hearing, without being contradicted by the applicant, that the terminology employed takes into account Luxembourg practice and, in particular, the fact that Luxembourg legislation on the transfer of pension rights also applies in relation to other international organizations which ascribe to the term “establishment” a wider meaning than it has in Community law.
            
         
               8. 
            
            
               For the reasons set out above, I am of the opinion that the Court should reject Mr Étienne's application and that he should be ordered to bear his own costs.
            
         (
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         )	Translated from the Italian