Commission of the European Communities v Council of the European Communities.
Date: 1982-10-06
8 SINCE APPLICATION OF THAT INDICATOR GAVE RISE TO DISAGREEMENT AT THE TIME OF THE ANNUAL REVIEW OF THE LEVEL OF REMUNERATION , THE COUNCIL ON 20 AND 21 MARCH 1972 , ACTING ON A PROPOSAL PUT FORWARD BY THE COMMISSION , ADOPTED A ' ' SYSTEM OF ADJUSTMENT OF REMUNERATION ' '  IN WHICH IT UNDERTOOK , FOR A TRIAL PERIOD OF 3 YEARS FROM 1 JULY 1972 TO 30 JUNE 1975 , TO FIX THE LEVEL OF THE REAL INCREASE IN COMMUNITY REMUNERATION WITHIN A BRACKET FORMED ON THE ONE HAND BY THE SPECIFIC INDICATOR ALREADY USED PREVIOUSLY , BUT IMPROVED , AND ON THE OTHER HAND , BY AN INDICATOR CALLED ' ' TOTAL EMOLUMENTS PER HEAD IN PUBLIC ADMINISTRATION ' ' , AS PUBLISHED IN NATIONAL ACCOUNTS , WHICH WAS INTENDED TO REFLECT THE VARIATION IN THE TOTAL REMUNERATION AND OTHER BENEFITS GIVEN TO NATIONAL CIVIL SERVANTS IN EACH MEMBER STATE , THAT IS TO SAY , GIVING A     SPECIFIC FORM TO THE INCREASE IN THE LEVEL OF INCOMES RECORDED IN THE COMMUNITY . THE COURT STATED IN ITS JUDGMENT OF 5 JUNE 1973 THAT ' ' BY ITS DECISION OF 21 MARCH 1972 , THE COUNCIL , ACTING WITHIN THE FRAMEWORK OF THE POWERS RELATING TO THE REMUNERATION OF STAFF CONFERRED ON IT BY ARTICLE 65 OF THE STAFF REGULATIONS , ASSUMED OBLIGATIONS WHICH IT HAS BOUND ITSELF TO OBSERVE FOR THE PERIOD IT HAS DEFINED ' ' .
9 AT THE END OF THE THREE YEARS FOR WHICH THE FIRST METHOD , THAT OF 1972 , APPLIED , THE COUNCIL ADOPTED ON 29 JUNE 1976 A NEW METHOD FOR ADJUSTING REMUNERATION , KNOWN AS THE 1976 METHOD . WHEN IT DID SO , THE COUNCIL , AFTER STATING THAT IT DID NOT THEREBY INTEND TO RESTRICT ITS POWER OF APPRAISAL TO A FURTHER EXTENT THAN REQUIRED BY THE APPLICATIONS OF ARTICLE 65 OF THE STAFF REGULATIONS , DEFINED A METHOD OF CALCULATION TO WHICH NO TIME-LIMIT WAS ATTACHED , BUT WHICH WAS OPEN TO REVIEW ON A PROPOSAL BY THE COMMISSION ' ' IN ORDER TO DETERMINE WHAT IMPROVEMENTS MIGHT BE MADE SUBSEQUENTLY AND TO ADJUST ANY INEQUALITIES ' ' . THAT METHOD WAS IN FORCE ON THE DATE WHEN THE REGULATIONS AT ISSUE IN THIS APPLICATIONS WERE ADOPTED .
10 THE 1976 METHOD COMPRISES , FIRST , A BASIC PRINCIPLE , AS IN 1972 , ACCORDING TO WHICH ' ' THE SYSTEM OF ADJUSTING REMUNERATION FORMS PART OF A POLICY AIMED TO GUARANTEE , IN THE MEDIUM TERM , THAT THE REMUNERATION PAID TO EUROPEAN OFFICIALS MOVES PARALLEL TO AVERAGE SALARIES PAID IN MEMBER STATES TO THE VARIOUS GRADES OF NATIONAL CIVIL SERVANTS ' ' .
11 IN ORDER TO ACHIEVE THAT AIM , AND IN APPLICATION OF ARTICLE 65 ( 1 ) OF THE STAFF REGULATIONS , THE COUNCIL IS TO DECIDE , ON A PROPOSAL OF THE COMMISSION , WHETHER IN THE CONTEXT OF THE ECONOMIC AND SOCIAL POLICY OF THE COMMUNITIES IT IS APPROPRIATE FOR REMUNERATION TO BE ADJUSTED , AND THAT DECISION IS TO BE TAKEN IN THE LIGHT OF FIVE FACTORS .
12 OF THOSE FIVE FACTORS , THREE ARE SUPPLIED BY THE STATISTICAL OFFICE OF THE EUROPEAN COMMUNITIES : THEY ARE TRENDS IN THE COST OF LIVING , TRENDS IN THE REAL INCOME OF NATIONAL CIVIL SERVANTS AND CIVIL SERVICE PER CAPITA EMOLUMENTS IN REAL TERMS ; THE OTHER TWO ARE SUPPLIED BY THE COMMISSION AND COMPRISE , FIRST , GENERAL ECONOMIC AND SOCIAL FACTORS - WHICH CONCERN ' ' OTHER MACRO-    ECONOMIC INFORMATION INDICATIVE OF THE ECONOMIC AND SOCIAL POLICY OF THE MEMBER STATES OF THE COMMUNITY , SUCH AS THE GROSS DOMESTIC PRODUCT PER HEAD OF THE WORKING POPULATION AND TOTAL PER CAPITA EMOLUMENTS IN THE ECONOMY AS A WHOLE ' '  - AND , SECONDLY , RECRUITMENT NEEDS AND THE STRUCTURE OF COMMUNITY STAFF COMPLEMENTS .
13 THE METHOD PROVIDES FOR THE ANNUAL ADJUSTMENT OF REMUNERATION TO BE MADE A POSTERIORI AND TO TAKE EFFECT RETROACTIVELY ON 1 JULY OF THE YEAR IN WHICH THE END OF THE REFERENCE PERIOD USED FOR THE REVIEW OF THE LEVEL OF REMUNERATION FALLS , THAT PERIOD CORRESPONDING TO THE 12 MONTHS PRECEDING 1 JULY OF THE YEAR IN WHICH THE REVIEW IS CARRIED OUT .
20 WHILST ARTICLE 65 LEAVES THE COUNCIL FREE TO CHOOSE THE MOST SUITABLE MEANS AND FORMS FOR IMPLEMENTING THE POLICY WITH REGARD TO REMUNERATION , THE FIRST SENTENCE OF THE SECOND SUBPARAGRAPH OF ARTICLE 65 ( 1 ) REQUIRES THE COUNCIL TO PURSUE ITS POLICY IN ADJUSTING REMUNERATION ' ' AS PART OF THE ECONOMIC AND SOCIAL POLICY OF THE COMMUNITIES ' ' , AND THE SECOND SENTENCE OF THAT SUBPARAGRAPH REQUIRES THE COUNCIL TO TAKE ' ' PARTICULAR ' '  ACCOUNT OF ' ' ANY INCREASES IN SALARIES IN THE PUBLIC SERVICE ' ' .
21 THAT SECOND SENTENCE INDICATES THAT WHEN THE COUNCIL EXERCISES ITS DISCRETIONARY POWER IT MUST , WHEN MAKING THE ANNUAL REVIEW OF THE LEVEL OF REMUNERATION , INCLUDE ANY INCREASES IN SALARIES IN THE PUBLIC SERVICE AS ONE OF ALL THE FACTORS TO BE TAKEN INTO CONSIDERATION .
22 IT IS TRUE THAT THE WORD ' ' PARTICULAR ' '  IMPLIES THAT ARTICLE 65 DOES NOT REQUIRE THE COUNCIL TO TAKE ACCOUNT EXCLUSIVELY OF CHANGES IN THE SALARIES OF NATIONAL CIVIL SERVANTS WHEN ADJUSTING SALARIES FOR COMMUNITY CIVIL SERVANTS . NEVERTHELESS THE REQUIREMENT IMPOSED BY THAT PROVISION MEANS THAT THE COUNCIL CANNOT , BY REASON OF THE FACT THAT IT TAKES OTHER CRITERIA INTO CONSIDERATION , OMIT TO TAKE ACCOUNT OF ONE OF THE TWO CRITERIA EXPRESSLY REFERRED TO IN THE SECOND SENTENCE OF THE SECOND SUBPARAGRAPH OF ARTICLE 65 ( 1 ).
32 THE DRAFTING OF PARAGRAPH ( 2 ) INDICATES THAT THE COUNCIL ' S DISCRETION IS LESS WIDE IN THAT MATTER THAN IN RELATION TO THE ANNUAL ADJUSTMENT OF SALARIES . THE PROVISION READS : ' ' IN THE EVENT OF A SUBSTANTIAL CHANGE IN THE COST OF LIVING , THE COUNCIL SHALL DECIDE . . . . WHAT ADJUSTMENTS SHOULD BE MADE TO THE WEIGHTINGS ' ' , WHICH IMPLIES THAT WHEN THE COST OF LIVING RISES SUBSTANTIALLY THE COUNCIL HAS A DUTY TO TAKE STEPS TO ADJUST THE WEIGHTINGS .