JUDGMENT OF 12. 11. 1981 — CASE 543/79 BIRKE ν COMMISSION AND COUNCIL

In Case 543/79

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

gives the following

JUDGMENT

Facts and Issues

I — Facts and procedure

1. Background provisions

2. Facts

3. Written procedure

II — Conclusions of the parties

Ill — Submissions and arguments of the parties

IV — Oral procedure

Decision

Costs

I —. Facts and procedure

1. Background provisions

(a). In the version in force until 31 March 1979, Article 63 of the Staff Regulations of Officials provided that:

(b). On 21 December 1978 the Council adopted Regulation No 3085/78 (Official Journal 1978 L 369, p. 6), amending, with particular reference to the monetary parities to be used, Regulation No 259/68 laying down the Staff Regulations of Officials of the European Communities and the Conditions of Employment of Other Servants of the Communities, Regulation No 2530/72 and Regulation No 1543/73 concerning certain special measures. The regulation embodies the wording of the communication from the Commission of 29 November 1978 and also the formula contained in the proposal of 1 April 1977 concerning the weighting to be applied to amounts transferred. The Council added, however: From that date the difference between the net amounts resulting from the implementation of the regulation and those received in September 1979 shall be reduced by Vio per month. The regulation fixes 1 July 1978 as the relevant date for calculating remuneration paid in a currency other than Belgian francs on the basis of the exchange rates used for the implementation of the general budget of the Communities and goes on to state that that date shall be changed at the time of the annual review of remuneration.

(c). Hand in hand with the bringing up to date of the rates of exchange, the Council adopted Regulation No 3086/78 of 21 December 1978 (Official Journal L 369, p. 8) adjusting the weightings applicable to the remuneration and pensions of Officials and Other Servants of the European Communities following the amendment of the provisions of the Staff Regulations concerning the monetary parities to be used in implementing the Staff Regulations, which amended the value of the weighting according to the various places of employment. In order to do that the Commission and the Council of the European Communities used a formula the intended result of which was that in the case of each official or other servant employed outside Belgium or Luxembourg the remuneration for April 1979 would be maintained at the same level as that of the previous month. However, in the applicant's view, as far as the disposable amount of his remuneration is concerned that formula resulted in the changes to which he refers in detail in these proceedings, namely a reduction of about 25%.

(d). Regulation No 3987/78 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) provides:

2. Facts

3. Written procedure

II —. Conclusions of the parties

1. The applicant claims that the Court should:

Ill —. Submissions and arguments of the parties

1. In his application the applicant claims that his action is admissible for the following reasons :

2. In its application for a decision on a preliminary objection, the Council contends that an application based on Article 91 of the Staff Regulations is admissible only if it complies with the rules laid down in Articles 90 and 91 of the Staff Regulations, which this application does not. First, the applicant has never submitted to the Council a complaint within the meaning of Article 90 (2). Secondly, the Council cannot be regarded as the appointing authority. Therefore Regulations Nos 3085 and 3086/78 do not amount to acts adversely affecting the applicant which may be challenged by way of the action provided for in Article 91. Nor can action for a declaration that they are void be founded on Article 146 of the EAEC Treaty. Regulations Nos 3085 and 3086/78 apply to all officials of the Communities whilst Regulation No 3087/78 applies to all officials employed in Italy. Therefore it may not be maintained that they are decisions addressed to the applicant or decisions which although in the form of a regulation are of direct and individual concern to him. In any case the application was out of time.

3. In his observations on the Council's objection, the applicant points out that the application directed against that institution is not an application for annulment but only a claim for damages. There may be doubt whether the applicant is entitled to proceed against the Council under Anieles 90 and 91 of the Staff Regulations which as a lex specialis cannot prevent the application of Article 151 and the second paragraph of Article 188 of the EAEC Treaty. The applicant is therefore entitled to base his claims for damages on the latter and in so doing he is not obliged to fulfil the conditions laid down by Article 91.

4. In its defence the Commission raises no objection to the admissibility of the claim set out in I. 1. of the application in so far as the salary statement which it issued is challenged on the ground that the calculation of salary shown therein made on the basis of the Council regulations is wrong in law. From the point of view of the requirements as to admissibility in disputes between the administration and its staff, the claims put forward in 1.4. to 8, II and III related to the dispute over the legality of that measure do not give rise to any objection either, provided they refer to the alleged irregularity in that limited way.

5. In his reply the applicant claims that he also challenged the January salary statement in his application. That is apparent from the amendment to the application, which amendment is admissible because it was made in good time and merely clarifies in a declaratory manner and this is anyhow apparent from the content of the application. If the amendment to the application is not accepted the applicant points out that a retroactive increase in the weighting can still be sought by making an application against the April salary statement. The Council may retroactively increase the weighting on a proposal by the Commission, especially after a ruling by the Court on a preliminary objection. Previous salary statements, as adverse decisions which are no longer subject to appeal, can be no bar to that. The applicant must have the opportunity at least once to seek and pursue by appeal a favourable decision on past events.

6. In its rejoinder the Commission withdraws its objections of inadmissibility made against the amendment to the application.

IV —. Oral procedure

1. By application lodged at the Court Registry on 11 October 1979, the applicant, Anton Birke, an official of the Commission employed at the Common Research Centre at Ispra in Italy, brought an action under Article 91 of the Staff Regulations of Officials (hereinafter referred to as the Staff Regulations) against both the Council and the Commission for the annulment of the Commission's decisions determining the applicant's remuneration for January and April 1979 and of the decisions rejecting the applicant's complaints.

2. In the version in force until the end of 1978 Articles 63 and 64 of the Staff Regulations provided that: An official's remuneration shall be expressed in Belgian francs. It shall be paid in the currency of the country in which the official performs his duties. Remuneration paid in a currency other than Belgian francs shall be calculated on the basis of the par values accepted by the International Monetary Fund on 1 January 1965. An official's remuneration expressed in Belgian francs ... shall be weighted at a rate above, below or equal to 100%, depending on living conditions in the various places of employment. The weighting applicable to the remuneration of officials employed at the provisional seats of the Communities shall be equal to 100% as at 1 January 1962.

3. In accordance with Article 17 of Annex VII to the Staff Regulations an official may have part of his emoluments transferred, either regularly or on an exceptional basis, to a country other than the one in which he performs his duties. Until 31 March 1979 Article 17 (4) provided that such transfers were to be made through the institution to which the official belonged at the official exchange rate ruling on the date of transfer. The official rate of exchange within the meaning of that provision was the last parity accepted by the International Monetary Fund, which had not been altered since 1 November 1969 (for example, BFR 13.66 to DM 1).

4. On 21 December 1978 the Council adopted Regulation (Euratom, ECSC, EEC) No 3085/78 (Official Journal L 369, p. 6), Article 1 of which states that Article 63 of the Staff Regulations is replaced by the following:

5. Article 2 of the regulation provides :

6. Article 4 of the regulation provides that the regulation is to enter into force on 1 January 1979 and that it is to apply from 1 April 1979.

7. On 21 December 1978 the Council also adopted Regulation (Euratom, ECSC, EEC) No 3086/78 adjusting the weightings applicable to the remuneration and pensions of Officials and Other Servants of the European Communities following the amendment of the provisions of the Staff Regulations concerning the monetary parities to be used in implementing the Staff Regulations. Article 1 of the regulation fixes inter alia the weighting applicable to remuneration at 74.3 for Italy and at 98.7 for the Federal Republic of Germany.

8. The applicant had regularly transferred, through the Commission, pursuant to Article 17 of Annex VII to the Staff Regulations, specific amounts to the Federal Republic of Germany. In March 1979 the equivalent in Italian lire of the sums regularly transferred through the Commission amounted to LIT 652 840.

9. As a result of the application of the new provisions cited above, after 1 April 1979 the cost of those transfers, expressed in Italian lire, increased to LIT 1120595 and the balance of his remuneration after the transfers was consequently reduced.

10. From 1975 officials employed at the Joint Research Centre at Ispra complained to the Commission that the cost of living in Italy had considerably increased and accordingly requested the weighting for Italy to be revised. They complained in particular that in their opinion the cost of living at 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.

11. 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 amount by which the weighting should be increased or on the date to which it 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.

12. 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.

13. 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 to fix the weighting for Italy at 146.4 as against 102.3 for Belgium with retroactive effect from 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.

14. The staff 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.

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

16. On 26 March 1979 the applicant submitted to the Commission a complaint under Article 90 (2) of the Staff Regulations against Regulations Nos 3085/78 and 3086/78. On the same date he submitted to the Commission a request under Article 90 (1) of the Staff Regulations that the Commission immediately adopt the measures necessary to make up for the loss of purchasing power in 1976 and 1977. That request concerned Regulations No 3087/78.

17. By a letter of 4 April 1979 the applicant submitted a complaint under Article 90 (2) of the Staff Regulations concerning the retroactive effect of the weighting for Italy resulting from Regulation No 3087/78. On 13 June the applicant submitted a complaint against the application of Regulations Nos 3085/78 and 3086/78 reflected in his salary statement for April.

18. By letters of 12 July and 28 September 1979 the Commission rejected those complaints.

19. The applicant thereupon brought this action against the Council and the Commission. In substance he asks the Court to:

20. By a submission dated 11 January 1980 the Council made an objection as to the admissibility of the application. According to the Council the following three actions are discernible in the application: (1) an action for the annulment of Regulations Nos 3085/78 and 3086/78, (2) an action for damages for non-contractual liability and (3) a claim that the regulations are inapplicable.

21. As far as the action for annulment is concerned, the Council sees two possibilities, namely (a) an action based on Article 91 of the Staff Regulations and (b) an action based on Article 146 of the EAEC Treaty which corresponds to Article 173 of the EEC Treaty. In the first case the application is admissible only if it complies with the rules laid down by Articles 90 and 91 of the Staff Regulations, which this application does not. The applicant has never submitted to the Council a complaint within the meaning of Article 90 (2) of the Staff Regulations. Secondly the Council cannot be regarded as the appointing authority in the applicant's case. Article 91 of the Staff Regulations permits an action to be brought only against acts adversely affecting officials which can emanate only from the appointing authority.

22. In the second case an action for annulment cannot be founded on Article 146 of the EAEC Treaty. Regulations Nos 3085/78 and 3086/78 apply to all Community officials whereas Regulation No 3087/78 applies to all officials employed in Italy. Therefore it is not possible to contend that they are decisions addressed to the applicant or decisions of direct and individual concern to him although in the form of a regulation. The Council furthermore claims that the action was not brought within two months of the publication of the regulations in question as required by the third paragraph of Article 173.

23. The action for damages is not admissible either. According to the case-law of the Court, where such a claim originates in the relationship of employment between the persons concerned and the institution, it lies outside the scope of Articles 178 and 215 of the Treaty as far as its admissibility in particular is concerned.

24. The claim that the regulations are inapplicable appears to be founded on Article 156 of the EAEC Treaty which corresponds to Article 184 of the EEC Treaty. That provision enables any party to invoke before the Court the inapplicability of a regulation in proceedings in which it is in issue and in order to do so to plead the grounds specified in the first paragraph of Article 173 of the EEC Treaty. However, it is apparent from the decisions of the Court that a declaration of inapplicability under Article 184 of the Treaty is an incidental remedy of limited effect. The mere possibility of a declaration of inapplicability does not open the way to proceedings against the Council just because it is the institution which adopted the act alleged to be unlawful.

25. In reply to that objection the applicant claims that the action against the Council is not an action for annulment but only for damages. If Articles 90 and 91 of the Staff Regulations are not applicable to the relationship between the applicant and the Council, even as a lex specialis those provisions cannot exclude the application of Article 151 and the second paragraph of Article 188 of the EAEC Treaty. The applicant therefore takes the view that he may base his claims for damages on those articles.

26. The applicant believes that, if it is assumed that the requirements of Article 90 (2) of the Staff Regulations must be fulfilled in every case, then it must be said that the applicant fulfils those conditions because he submitted a complaint to the appointing authority against the regulations adopted by the Council. He claims that the Council is contradicting itself when it rules out Articles 90 and 91 of the Staff Regulations for an action for annulment and yet wishes them to apply to an action for damages. The applicant invokes the inapplicability of the regulations only as an incidental claim.

27. The objection raised by the Council must be upheld. An action for annulment of Regulation Nos 3085/78 and 3086/78 of the Council is inadmissible, since the regulations in question are of general application and cannot be assimilated to decisions which, although taken in the form of regulations, are of direct and individual concern to the applicants. Moreover, even if such an action against the Council were admissible in that respect it would nevertheless be inadmissible because it is out of time, having been lodged after the expiry of the period laid down in the third paragraph of Article 146 of the EAEC Treaty, which corresponds to the third paragraph of Article 173 of the EEC Treaty.

28. The applicant's claim for compensation seeks to obtain precisely the same results as those which he would obtain from the annulment of the regulations. The Court has held on a number of occasions, in particular in its judgment of 15 December 1966 (Schreckenberg, Case 59/65 [1966] ECR 543) that although a party may take action by means of a claim for compensation without being obliged by any provision of law to seek the annulment of the illegal measure which causes him damage, he may not by this means circumvent the inadmissibility of an application which concerns the same illegality and which has the same financial end in view. The claim for compensation is therefore inadmissible.

29. In the circumstances the application is inadmissible in so far as it is directed against the Council and must therefore be dismissed.

30. In its defence the Commission claimed the application to be inadmissible only in regard to some of the applicant's heads of claim. The Court (First Chamber) has decided not to rule on the questions of the admissibility of the application as directed against the Commission before the parties submit arguments on the substance and the documents relating thereto.

31. Under Article 69 (2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs.

32. However, under Article 70 of the Rules of Procedure the costs incurred by the institutions in proceedings brought by employees of the Communities are to be borne by those institutions.

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

1 Dismisses the application as inadmissible in so far as it is directed against the Council.

2 Orders the applicant and the Council to bear their own costs.