C-158/79

JUDGMENT OF 15. 12. 1982 — CASE 151/79 JUDGMENT OF THE COURT (FIRST CHAMBER)

CELEX: 61979CJ0158
Datum: 1982-12-15
Källa: eur-lex.europa.eu

THE COURT (First Chamber) composed of: A. O'Keeffe, President of Chamber, G. Bosco and T. Koopmans, Judges, Advocate General: F. Capotorti Registrar: P. Heim

gives the following

JUDGMENT

Facts and Issues

I — Facts and written procedure

II — Conclusions of the parties

Ill — Submissions and arguments of the parties

A — Admissibility

B — The subitanee

IV — Oral procedure

Decision

Admissibility

The substance

I —. Facts and written procedure

1. In fixing the weighting referred to in Article 64 of the Staff Regulations, the Council and the Commission have, since 1967, used the following procedure for comparing the level of prices between Brussels and the various other places of employment. The Statistical Office of the European Communities, in conjunction with the competent national offices, carries out regular price surveys in respect of goods and services considered as representing typical items of household expenditure for officials in the various places of employment. In respect of each item the relationship is calculated between the price in Brussels and the price prevailing in the town which is used as the point of reference for the place where the official performs his duties. By the use of this weighting it is possible to calculate the relative purchasing power of currencies in the countries where the officials of the Community perform their duties. For example, the index calculated using the Fisher method expresses in a single figure the relationship of prices in Brussels to those in Rome and vice versa. That figure is used for calculating the weightings within the Community because it expresses the relationship of prices from one town to another in a reversible manner and because it is therefore possible to make not only bilateral price comparisons but also multilateral ones. According to this method, the weighting is obtained by dividing the Fisher index calculated as described above, by the corresponding rate of exchange used to convert the remuneration of officials into the respective national currencies in accordance with Article 63 of the Staff Regulations. In October and November 1975 a comparative study of prices was carried out in all the capitals of the Community.

2. By a complaint formulated in the same terms as a large number of other complaints made at the same ume, and lodged with the Commission on 11 April 1979, the applicant, without challenging the payment made on the basis of Regulation No 3084/78, contested the payment made in pursuance of Regulation No 3087/78 on the ground that it was not retroactive to 1 January 1976.

II —. Conclusions of the parties

1. Annul the implied decision rejecting the present applicant's complaint dated 11 April 1979 or, should the Court accept (which the applicant does not) the defendant's contentions, annul the Commission's alleged express individual decision of rejection dated 12 July 1979;

2. Declare invalid the decision taken by the Commission to pay to the applicant the arrears due as a result of the raising of the weighting applicable to Italy provided for by Council Regulation No 3087/78 on the ground that those arrean are backdated only to 1 January 1978;

3. Declare by way of preliminary that the aforementioned regulation is inapplicable in this case on the ground that it fixes at 1 January 1978 the date from which the increase in the weighting is to apply retroactively;

4. Note that, inasmuch as the contested measures are in breach of provisions adopted pursuant to the Treaty, they incorrectly sute the facts and are vitiated by misuse of powers and infringement of essential procedural requirements as stated in this application;

5. Declare, (within the context of the powers of unlimited jurisdiction enjoyed by the Court in this sphere) that the applicant is entitled to the amounts resulting from the increase in the weighting of 6.4 % applied to the 1976 and 1977 salaries as well as to the subsequent consolidation provided for to take account of the higher level of prices in Varese as against Rome (which the Court may confirm by whatever means it thinks fit) together with interest thereon;

6. Order the defendant to pay the costs.

Ill —. Submissions and arguments of the parties

A —. Admissibility

1. In its objection of inadmissibility, the Commission observes that the application is inadmissible first of all in its conclusions seeking annulment. The measure adversely affecting the applicant is said to be the Commission's decision to pay to the applicant arrears of salary with a retroactive effect limited to 1 January 1978 without taking account of the cost of living peculiar to the Province of Varese. In January 1979 arrears of salary were paid to the applicant in implementation, on the one hand, of Regulation No 3087/78 and, on the other, of Regulation No 3084/78 altering with effect from 1 July 1978 the scale of basic salaries and fixing, with effect from the same date, the weighting for Italy at 146.8. The applicant is not contesting the calculation of arrears of salary for the period subsequent to 1 July 1978. Her claim relates solely to the determination of her salary arrears by the application of Regulation No 3087/78 and the objection raised to the effect that one regulation is inapplicable relates only to Regulation No 3087/78. The calculation of salary arrears for the period subsequent to 1 July 1978 is therefore not at issue since it must be regarded as having become definitive.

2. In her observations on the objection of inadmissibility, the applicant claims that, during the procedure leading to the alteration in the weighting (which is always subsequent, by quite a long period, to the facts justifying it) and pending notification of the amount and the retroactivity decided upon, any action would have been premature. An action brought against a calculation of a salary on the ground that the weighting had not yet been raised and particularly an action started during the procedure leading to the revision would certainly have laid the applicant open to an objection of inadmissibility. She would have been met with the reply that she should await the Council's decision and, if appropriate, then contest the decision calculating the arrears. Furthermore, an action against monthly salary payments which do not take account of the increased weighting falls far short of the requirement of legal certainty proclaimed by the other side. In the first place since, in the case of an increase pursuant to Article 65 (2), a review of the weighting is subject to an ad boc procedure (Council Decision on a proposal from the Commission, to be adopted within two months), the question arises whether the day to which retroactivity is to take effect should not be counted as from the expiry of the two months indicated above. Secondly, since those concerned are at liberty to assess the date on which the events of an economic nature justifying an increase occurred (for example a substantial increase in the cost of living) and thus the corresponding failure to adapt the weighting in force, there is a risk of there being as many different days a quo as there are applicants, according to their subjective assessments. Finally, those inclined to act belatedly might construa periods of time for complaints and applications by reducing the period of retroactivity requested to the three months preceding their respective complaints under Article 90. Such aberrant consequences which would result from the other party's argument run counter to the law, to equity and, quite simply, to reason. Although the ex post facto revision of the weighting is carried out under the Staff Regulations, any complaints or actions concerning the amount and the retroactive effect of the weighting may only be brought after those factors have been determined and implemented.

3. In its defence the Commission puts forward an additional submission of inadmissibility affecting the application in so far as it relates to the claim for a reevaluation of the weighting to take account of the higher price levels in Varese than in Rome. In fact that issue was not made the subject of a complaint. It is clear from the Court's case-law that the application to the Court must be preceded by a complaint and that, in any event, claims made at the suge of such an application may alter neither the cause nor the subject-matter of the complaint.

4. In her reply the applicant states that those concerned are in a position to complain about the inadequacy of the weighting only if they have information available to them. It is easy to see that the Commission itself, in spite of the considerable investigative resources at its disposal, is not in a position to verify in a brief space of time (such as the period of three months for lodging a complaint) whether the weightings applied correspond to reality. Moreover, the persons concerned had good reason for considering that their claim would be conceded at the decision stage. During the political discussion of 19 March 1976 the Commission itself let it be understood that, for its part, it had not taken a negative decision as regards the claims by employees. In the same way, the setting up of a mixed working group, with the participation of the administration, ought to have and might have been interpreted as meaning that the proposals relating to the adjustment of the weighting would be in compliance with the conclusions of that group. Having received approximately 900 complaints lodged by officials at Ispra, the administration addressed to staff representatives on 6 October 1981 a telex message worded as follows: ... as regards the time-limits for lodging complaints made subsequent to a Council regulation relating to your pecuniary rights the Commission undertakes for its pan in future not to take the point of the possible lateness of those complaints in relation to the date of the coming into effect of the regulation. That is the same administration which before the Court insists on the inadmissibility of this application in a context identical to that mentioned by the official declaration referred to above. Furthermore, the allegation of an inadequate weighting (a submission which by definition seeks to ensure that the remuneration corresponds to the cost of living in the place of employment) certainly also encompasses in oudine the claim relating to the higher cost of living recorded in Ispra.

5. In its rejoinder the Commission retorts that the applicant's claim is invalidated by the facts which show that, during the period 1976 to 1978, regulations relating to the value of the Italian weighting were regularly adopted by the Council. Moreover, the statistical surveys, agreements and political compromises resulted finally in the adoption of Regulation No 3087/78 which did not call in question the weightings prior to 1 January 1978. As far as the telex message of 6 October 1981 is concerned, the Commission stresses that it is the Council which definitively determines the date on which the regulation is to come into effect and the Commission has no responsibility in this respect. In fact, for example, if in November 1982 the Commission proposed to the Council, following the results of the statistical surveys, an increase of 5% in the Italian weighting and the Council accepted that proposal in December 1982, officials could challenge the quantum without the Commission's raising any objection of inadmissibility on the ground that no complaints were lodged during the period taken into consideration by the regulation. If, on the other hand, the Council in December 1982 fixed a nearer date for the entry into force, for example October 1981, the Commission would not raise any objection of inadmissibility on account of any failure to lodge complaints during the period taken into consideration in that regulation, that is to say, as from October 1981, but it certainly could not guarantee that an application relating to the period prior to October 1981 might not be declared inadmissible. A close reading of the telex message can lead to no other conclusion and, furthermore, since those time-limits constitute an absolute bar to proceeding with a case, of which the Court must take cognizance of its own motion, the Commission was not in a position to give any such assurances. Proof, moreover, that the staff representatives perfectly well understood the meaning of the telex message is that a number of officials at Ispra, including the applicant, brought a fresh action (Case 320/81) to safeguard their rights and to protect themselves from any possibly inadequate retroactivity of the future Council regulation relating to the Italian weighting. Furthermore, as far as the additional submission of inadmissibility is concerned, the Commission remarks that something which is nonexistent can hardly contain in oudine something else.

B —. The subitanee

1. The Commission, in its defence, seeks to examine entirely in the alternative the substance of the submissions put forward in support of the application.

2. In her reply, the applicant recalls that, pursuant to Article 64 of the Staff Regulations, officials' remuneration is to be adjusted periodically by the application of a weighting higher or lower than or equal to 100% according to the living conditions in the different places of employment. Specifically in compliance with that provision the Commission until 1970 applied differential weightings even within the same Member State to take account of the cost of living actually recorded in the various places in which officials were required to perform their duties. That happened in the case of both France and Italy, in the latter case by giving to Ispra a weighting which differed from that applied to Rome (Gazzetta Ufficiale L 289 of 17 February 1969). It was only subsequently, as from 1970, that the weighting was made uniform within each Member State and brought up to the level of prices in the capital. The legislature intended that measure similarly as a favour since in general the cost of living is higher in the capitals. However, that is not the case as far as the Province of Varese is concerned.

3. In its rejoinder the Commission retorts that, by approving the decision of 15 December 1981, the Council merely confirmed its previous decision of 1968 that a single weighting was to be fixed for each country of employment. That decision provides that a technical check as regards the other places of employment is only to be carried out when objective factors demonstrate that there is a risk of major distortions, regard being had to the information recorded in the capital of the country concerned. In the present case the Commission does not consider that there are any major distortions.

IV —. Oral procedure

1. By an application lodged at the Court Registry on 11 October 1979, Mrs Roumengous, an official of the Commission employed at the Joint Research Centre in Ispra, Italy, brought an action under Article 91 of the Staff Regulations of Officials for a declaration that Council Regulation No 3087/78 of 21 December 1978 adjusting the weighting applicable to the remuneration and pensions of officials and other servants of the European Communities employed or having a home in Italy (Official Journal L 369, p. 10) is not applicable to her.

2. Until the end of 1978 the Staff Regulations provided that an official's remuneration was to be expressed in Belgian francs and weighted at a rate above, below or equal to 100%, depending on living conditions in the various places of employment.

3. From 1975 officials employed at the Joint Research Centre in Ispra complained to the Commission that the cost of living in Italy had considerably increased and accordingly requested that the weighting for Italy be revised. They complained in particular that in their opinion the cost of living in the Province of Varese was higher than in Rome and they urged the Commission to take account of that difference when fixing the weighting applicable to their remuneration.

4. In 1976, 1977 and 1978 consultations on technical matters took place between representatives of the staff and those of the Commission and Council but no agreement was reached on the alteration of the weighting or on the date to which the new weighting should have retroactive effect. In the meantime by a series of regulations the Council had increased the weighting for Italy as from 1 January 1976 to 176.6 as against 157.8 for Belgium, as from 1 July 1976 to 189.3 as against 157.8 for Belgium, as from 1 January 1977 to 120 as against 100 for Belgium, as from 1 January 1977 to 132.1 as against 104.5 for Belgium and as from 1 July 1977 to 130.2 as against 100 for Belgium. In most cases those regulations had a retroactive effect of about six months.

5. On 26 June 1978 the Council adopted Regulation No 1461/78 (Official Journal L 176, p. 1) by which the weighting for Italy was fixed at 137.6 as against 102.3 for Belgium. The recitals in the preamble to that regulation state that a decision on the Commission proposal for the correction of the weightings for three countries of employment will be taken only in the light of a study to be carried out by the Commission.

6. After a fresh inquiry by the Statistical Office of the Communities and discussions between the Commission and the Council, on 10 November 1978 the Commission proposed to the Council that the weighting for Italy be fixed at 146.4 as against 102.3 for Belgium with retroactive effect to 1 January 1978. That proposal was accepted by the Council by the adoption of Regulation No 3087/78 of 21 December 1978 (Official Journal L 369, p. 10). On the same date the Council adopted Regulation No 3084/78 (Official Journal L 369, p. 1) fixing the weighting for Italy at 146.8 as against 100 for Belgium as from 1 July 1978.

7. The staff concerned challenged Regulation No 3087/78 in so far as it fixed the weighting at a level which did not take account of the cost of living at Varese and gave that weighting retroactive effect only to 1 January 1978.

8. In January 1979 the Commission paid the arrears of remuneration due under Regulations Nos 3087/78 and 3084/78.

9. By a complaint made to the Commission on 11 April 1979 pursuant to Article 90 (2) of the Staff Regulations, the applicant requested the Commission to take the measures necessary to compensate her for the loss in her purchasing power during the years 1976 and 1977.

10. By circular letter dated 12 July 1979 the Commission rejected that complaint.

11. The applicant then brought this application in which she seeks the annulment of the Commission's decision settling her arrears of remuneration by limiting them to 1 January 1978 without taking into account the cost of living peculiar to the Province of Varese; a declaration that Regulation No 3087/78 is not applicable to her in so far as it limits its retroactivity to 1 January 1978; and a declaration that she is entitled to the amounts resulting from the raising of the weighting by 6.4% on the salaries of 1976 and 1977 and to the subséquent consolidation provided for to take account of the higher level of prices in Varese as compared with Rome.

12. The Commission claims that the application is inadmissible as regards the period from July to December 1978 since Regulation No 3087/78, which is the only one in dispute, fixed the weighting for the first half of 1978. A second ground of inadmissibility is that the calculation of arrears carried out in January 1979 was in the nature of a confirmation of the monthly calculations of salary made during 1976 and Î977 and such payment of arrears does not therefore constitute a measure capable of founding an independent right of action, particularly since no complaint was made at that time against the calculations of salary for the years in question.

13. Regard being had to the circumstances of the case, the Commission's objection cannot be upheld. In fact, although it is important to safeguard the application of the rule contained in the Staff Regulations which provides for a prior complaint through official channels within a relatively short period it should not be overlooked that, owing to the fact that negotiations had been going on for many months between the Council, the Commission and staff representative bodies, the applicant was legitimately entitled to await the outcome of those negotiations before concerning herself about their possibly negative effect on her salary. In fact, the successive Council regulations adjusting the weightings come into effect after a period of delay and are therefore normally given retroactive application, the extent of which is, however, hardly foreseeable. In the recitals in the preamble to Regulation No 1461/78, moreover, the Council itself acknowledged that the adjustment of the weighting provided for by that regulation for three countries of employment was not definitive.

14. The Commission's argument, if it were accepted, would mean that an official who considered himself injured by the Council's delay in adjusting the weighting would have had not merely to submit a series of complaints possibly stretching over several years, but also to bring a series of anions before the Court, or risk being time-barred. That argument cannot be upheld. The facts of Case 15/73 (Kontier [1974] ECR 177) on which the Commission founds its argument are in no way similar to those of the present case.

15. As for the second objection raised by the Commission, regarding the application for compensation, suffice it to sute that the admissibility of the application for annulment entails the admissibility of the application for compensation where, as in this case, those applications are closely linked the one with the other.

16. The application must therefore be adjudged admissible.

17. As regards the weighting applied to officials employed in Ispra, the applicant is pursuing two objectives. First she seeks to obtain a revision of the amount of the weighting which, in her view, ought to be calculated on the basis of the cost of living at the official's exact place of employment, in this case in the Province of Varese, and not automatically in the capital of the country in question. In this case, the applicant maintains that the cost of living in the Province of Varese was, during the years 1976 to 1978, substantially higher than in Rome. Secondly the applicant requests that the weighting for Italy, fixed at 146.4 by Regulation No 3087/78, be applied retroactively to 1 January 1976.

18. The applicant challenges the arrears of salary calculated on the basis of Regulation No 3087/78 which, in her view, are in breach of Articles 64 and 65 of the Staff Regulations relating to the weighting, the principle of nondiscrimination and the rules which require observance of essential procedural requirements.

19. The applicant thus first puts forward the argument that Regulation No 3087/78 infringes Article 64 of the Staff Regulations inasmuch as the surveys of the Statistical Office of the Communities for determining the weighting were carried out with reference to living conditions in the capital and not at the place of employment, situated in the Province of Varese.

20. It should be noted that in the past the Council has interpreted Article 64 of the Staff Regulations as referring not necessarily to the capital of the country of employment as the place of employment bur, according to the circumstances of the case, the precise place of employment. Thus Regulation No 1/67/ECSC, 988/67/EEC and 9/67/EAEC of the Council of 12 December 1967 provided two weightings both for France (130.5% for Paris and for certain areas and 122.5% for the rest of the country) and for Italy (114% for Ispra and 114.5% for the rest of the country). It was only later that the Council decided to use a single weighting for each Member State.

21. That new system in reality confers in most cases a benefit on officials not resident in the capital since the cost of living there is generally higher than in the provinces. However, it seems that that is not the case specifically in Italy where the survey by the Statistical Office and the information supplied by the Italian Institute of Statistics both show that the cost of living in Varese is higher than that in Rome.

22. In fact it is clear from the figures communicated by the Commission on the basis of the results of the survey carried out by the Statistical Office in Varese in May 1976 taking into consideration 230 items of expenditure (excluding rent, heating and electricity which were the subject of a later investigation) that the cost of living in that province was 7.66% higher than in Rome. After the result of the investigation carried out in Varese on the level of rents had been taken into account, the difference was reduced to 2.76% which still represented a substantial difference within the meaning of Article 65 (2) of the Staff Regulations. Moreover it is clear from the reasons accompanying the Commission's proposal which led to Regulation No 3087/78 that the Commission itself entertained doubts as to whether the sole reference to the cost of living in Rome was well founded since it stated that: the use of a single weighting for each country of employment, worked out for the capital, places staff working in Ispra at a slight disadvantage. The statistics available show that the cost of living in Rome has risen less rapidly than in the Varese area, from which it may reasonably be assumed that prices in Rome are now lower than in Varese. This existence of lower prices in the capiul than elsewhere is the exception rather than the rule in the Nine. In view of the number of staff employed in Ispra a special local price survey would appear justified. However, the Commission feels that it would be wiser not to innovate in this direction and to abide by the Council Decision of 1968, which provides specifically for the use of the price indexes relating to the capiul.

23. Under those conditions, in order that the rule contained in Article 64 of the Suff Regulations to the effect that account must be uken of living conditions in the various places of employment may be observed, that expression must be understood as meaning not only the capitals of the Member Sutes but the exact places where the duties of a sufficiently large number of officials and other employees of the Communities are performed.

24. Therefore it is for the Community institutions, in cases in which the cost of living in such a place of employment undergoes fluctuations greater than those occurring in the capiul of the Sute in question, to determine separate weightings. Hence the applicant's submission relating to the calculation of the weighting affecting her salary on the basis of the cost of living in the Province of Varese must be considered well founded.

25. As regards the retroactivity of Regulation No 3087/78 the applicant claims that that regulation ought to have been applied as from 1 January 1976 since substantial increases in the cost of living had occurred as from that year.

26. In fact it is clear from the reports of the Statistical Office of 17 and 29 June 1976 and from its memorandum of 17 August 1976 that changes of more than 2% in the cost of living as against that in Brussels had occurred in 1976 both in Rome and, to a greater extent, in Varese.

27. The Commission states in that connection that Article 65 (2) of the Staff Regulations, which provides that in the event of a substantial change in the cost of living, the Council shall decide, within two months, what adjustments should be made to the weighungs and if appropriate to apply them retroactively, must be understood as giving the Council discretionary power to decide whether measures adjusting weighungs should be retroactive or not.

28. That argument cannot be upheld. In fact the wording of Article 65 (2) precludes any interpretation to the effect that the Council is not obliged to adjust the weightings within a period of two months following any substantial change in the cost of living. It should be remembered that the Court in its judgment of 6 October 1982 in Case 59/81 (Commission v Council [1982] ECR 3329) held that the Council's power in this respect was to decide whether or not there had been a substantial increase in the cost of living and, if there had, to draw the appropriate conclusions. Any other interpretation would run counter to the objective of the provision in question which is to guarantee to all officials the same purchasing power whatever their place of employment.

29. That submission is therefore well founded.

30. Consequently it is not necessary to examine the other submissions put forward by the applicant which were put only in the alternative.

31. The applicant's salary statement for the month of January 1979 must therefore be annulled, in so far as it is restricted to giving effect to Council Regulation No 3087/78, both as to the amount of the adjustment of the weighting and as to the retroactive effect of that adjustment, together with the decisions rejecting the applicant's complaints. Regulation No 3087/78 is not applicable to the applicant in so far as it takes no account of the cost ot living in Varese and limits the retroactive effect of the adjustment of the weighting to 1 January 1978.

32. Since it may be expected that the competent institutions will take the measures necessary to comply with this judgment, examination of the claim for compensation for the pecuniary damage suffered by the applicant is deferred to a date to be fixed at a later date if necessary.

33. Before 15 July 1983 the Commission shall report to the Court on the measures taken to compensate the applicant; the applicant will be given an opportunity to reply.

On those grounds, THE COURT (First Chamber) hereby:

1 Annuls the applicant's salary statement for January 1979, in so far as it is restricted to giving effect to Council Regulation No 3087/78, both as to the amount of the adjustment of the weighting and as to the retroactive effect of that adjustment, together with the decisions rejecting the applicant's complaints; declares Regulation No J087/78 not applicable to the applicant in so far as it takes no account of the cost of living in Varese and limits the retroactive effect of the adjustment of the weighting to 1 January 1978;

2 Orders the Commission to report to the Court before 15 July 1983 on the measures taken to comply with this judgment;

3 Defers examination of the claim for compensation for the pecuniary damage suffered by the applicant to a date to be fixed at a later date if necessary;

4 Reserves the costs.