C-737/79

JUDGMENT OF 15.12.1982 — CASE 737/79 BATTAGLIA v COMMISSION

CELEX: 61979CJ0737
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

The applicant claims that the Court should:

The Commission contends that the Court should:

III — Submissions and arguments of the parties

A — Admissibility

B — The substance

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 vena. 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 but also multilateral price comparisons. 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 nudy of prices was carried out in all the capitals of the Community.

2. By two complaints dated 26 March and 6 April 1979, formulated in the same terms as some 40 other complaints lodged at the same time, the applicant, without challenging the calculation made on the basis of Regulation No 3084/78, contested the calculation 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. Declare null and void the defendant's decision settling the arrears owing to the applicant by limiting them to 1 January 1978 without taking into account the cost of living peculiar to the Province of Varese;

2. Declare inapplicable Regulation No 3087/78 of the Council of Ministers and in particular Article 1(1) thereof inasmuch as the latter restricts retroactivity to 1 January 1978 under Article 184 of the EEC Treaty, Article 156 of the EAEC Treaty and the third paragraph of Article 36 of the ECSC Treaty;

3. Making use of its unlimited jurisdiction, declare and adjudge that there is due to the applicant for the period from 1 January 1976 to 1 January 1978 an additional amount of salary regard being had to the cost of living peculiar to the Province of Varese; and that the Commission should be required to calculate that amount of salary and to pay it, subject to the right to apply to the Court if the parties should fail to reach agreement;

4. Declare and adjudge that the normal legal rate of interest in Italy should be added to the sums to be paid;

5. In the alternative, declare that the defendant has committed the wrongful acts or omissions indicated in the application;

6. In the further alternative declare that the conditions set out in Article 65 (2) of the Staff Regulations of Officials have been met since 1 January 1976 and that it is therefore for the Council, of Ministers to adopt measures appropriate to ensure that the salary of officials and other servants is calculated in conformity with the principles laid down in Articles 64 and 65 of the Staff Regulations of Officials and that there is no discrimination between them, whatever may be the place of performance of their duties;

7. Order the defendant to pay the costs.

III —. Submissions and arguments of the parties

A —. Admissibility

1. In its objection of inadmissibility the Commission observes that the application is inadmissible first 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 retroactive effen 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. His claim relates solely to the determination of his 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 his observations on the Commission's objection of inadmissibility, the applicant claims, as regards the alleged inadmissibility oí the application in so far as it is brought as an application for annulment, that in relation to the weighting mentioned in Article 65 (2) of the Staff Regulauons it is not a question of a personal right relating to a given amount or an amount easily determinable. That provision confers no direct and immediate right of the official but creates a duty for the Council and not for the institution by which the official is employed, a duty which is political in nature and which the official cannot enforce by means of the procedure open to him, contained in Articles 90 and 91 of the Staff Regulations. The applicant was therefore not entitled to submit a claim or a complaint to the Council, still less could he have brought an application before the Court. He had to await the outcome of the political negotiations between the local Staff Committee and the staff representative bodies — negotiations which led to the regulation which is specifically challenged by the applicant on the ground that t the retroactivity provided for therein does not correspond to the objeaive nature of the problem. If each payment of salary since 1 January 1976 had to give rise to a request, then to a complaint and finally to an application to the Court, the Commission would have received nearly 30000 requests followed by 30000 complaints and 30000 applications. The routine updatings carried out by the Council each time provide for a retroactivity of six months. Therefore the applicant, if he failed to make a complaint immediately in respect of the first month and the two following months was time-barred for the first three months and even for the following three months.

3. In its' defence, the Commission replies that it would have been sufficient for the applicant to bring a single complaint against the salary statement relating to January 1976 to enable the Court, by means of an application brought following the rejection of that complaint, to be validly seised of the whole problem of the absence of retroactivity between January 1976 and December 1977.

4. In the reply the applicant claims that, in a situation characterized by problems of great technical complexity, he relied upon the staff representatives and was not concerned to worry himself personally about his individual situation which could be gleaned from a perusal — though difficult and uncertain — of the salary statements. The administration did not reply clearly to each official or other servant. It drafted a reply dated 11 July 1979 which was rather a kind of circular confusing the various complaints directed against the different regulations and which certainly did not constitute an express rejection of the complaints made by each of the parties concerned including the applicant himself. It follows that the complaints made cannot be treated as normal steps preceding an application to the Court, such as those which are taken where an official is faced with a problem peculiar to him.

5. In its rejoinder the Commission stresses that, if the applicant's argument to the effect that the absence of any personal right in his eyes excuses him from not having made any complaint concerning the amount of his salary calculated during 1976 and 1977 were well founded, the question might arise how he suddenly obtained a personal right as from 1 January 1978 whereas that was not the case in 1976 and 1977. In any event it is certainly not in Regulation No 3087/78 that such a right might find its basis for the period 1976 and 1977 since that regulation, raised the rate of the weighting in question only with effect from 1 January 1978.

B —. The substance

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 his reply, the applicant derives support for his argument from the document of the Statistical Office of the Communities annexed to the proposal for a regulation submitted by the Commission to the Council on 10 November 1978. It appears that, if reference is made to the extrapolations relating to the date of 1 January 1978, the figure goes from 134.5 to 143.2 which actually represents an increase of 6.4%. But it is also clear from that document that since July 1975 the weighting for Italy ought to have been 119, as against 100 for Brussels, which would have justified an increase from 112 to 119 with effect from 1 January 1976, that is to say also an increase of 6.4%.

3. In its rejoinder the Commission recalls that the weighting, which entered into force on 1 January 1978, was fixed by reference to factors updated in relation to those used when the weightings for the preceding periods were drawn up. That reform therefore represents some progress, which does not however mean to say that the weightings fixed at various rates between 1 January 1976 and 31 December 1977 must be regarded as conflicting with Article 65 (2). On the contrary, it should be remembered that in May 1976, the Statistical Office carried out, at the Commission's request, an inquiry into prices in the Province of Varese. It is clear from the Office's report that, of the difference of 8.5% existing between the weighting for Italy as calculated for Varese (121.5 as against 100 for Brussels) and the weighting for Italy adopted by the Council (112.04 as against 100 for Belgium), 6.7% was attributable to the widening gap between the cost of living indices in Italy and Belgium from December 1975 to June 1976. On 30 December 1976 the Council adopted Regulation No 3077/76 (Official Journal L 359, p. 1) by which the weighting for Italy was increased, with effect from 1 July 1976, to 189.3 for Italy as against 157.8 for Belgium. With effect from 1 January 1977 the weighting was fixed at 120.1 for Brussels. The weighting fixed by the Council with effect from 1 July 1976 at 189.3 or 119.16 as against the basic weighting of 100 for Brussels therefore differed only by 1.3% from the weighting calculated by the office for Varese. Therefore, if the applicant considers that the rates at which the Italian weightings were fixed in 1976 and 1977 are vitiated by illegality it would be appropriate to seek not the retroactive application to 1 January 1976 of the rate which came into force on 1 January 1978 but he should request that four new rates be fixed, to be calculated on the basis of four price surveys respectively carried out on the basis of information as at 1 January and 1 July 1976 and 1977. It would also be necessary, whilst adhering to principles, to lay down four weighting schemes, based on the results of four surveys of officials' family budgets conducted on the basis of the information available at the aforementioned dates. The weighting adopted by the Council in Regulations Nos 3084 and 3087/78 is the result of a compromise including both the rate of increase applied and the date of entry into force.

IV —. Oral procedure

1. By an application lodged at the Court Registry on 17 October 1979, Dino Battaglia, an officiai 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 him.

2. Until the end of 1978 the Suf f 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 to fix the weighting for Italy 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 in 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 two complaints made to the Commission on 26 March and 6 April 1979 pursuant to Article 90 (2) of the Staff Regulations, the applicant requested the Commission to take the measures necessary to compensate him for the loss in his purchasing power during the years 1976 and 1977.

10. By circular letter dated 12 July 1979 the Commission rejected those complaints.

11. The applicant then brought this application in which he seeks the annulment of the Commission's decision settling the applicant's 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 him in so far as it limits its retroactivity to 1 January 1978; and an order to the Commission to pay the applicant by way of compensation an amount calculated as if the weighting at present agreed had been applied as from 1 January 1976 together with interest.

12. The Commission claims that the application is inadmissible because 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 1977 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 accepted. 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 consideration must be given to the fact that, as 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 himself about their possibly negative effect on his salary. In fact the 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 actions before the Court, or risk being time-barred. That argument cannot be upheld. The facts of Case 15/73 (Kortner [1974] ECR 177) on which the Commission founds its argument are in no way similar to those of the present case.

15. As far as concerns the second objection raised by the Commission, regarding the application for damages, 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 he seeks to obtain a revision of the amount of the weighting which, in his 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 his view, are in breach of Articles 64 and 65 of the Staff Regulations relating to the weighting, Article 24 of the Staff Regulations relating to the Commission's duty of assistance towards its officials and the principle of nondiscrimination and the rules which require respect for 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 pointing not necessarily to the capital of the country of employment as the place of employment but, 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 Pans and for certain departments 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 Sute.

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 Iulian Institute of Sutistics 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 Sutisucal 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 2.76o/o 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 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 capital 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 capitals.

23. Under those conditions, in order that the rule contained in Article 64 of the Staff Regulations to the effect that account must be taken 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 States 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 separable weightings. Hence the applicant's submission relating to the calculation of the weighting affecting his 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) on 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 weightings and if appropriate to apply them retrospectively, must be understood as giving the Council discretionary power to decide whether measures adjusting weightings 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 Counal [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 ot 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 ot 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 later 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 3087/78 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 later if necessary;

4 Reserves the costs.