JUDGMENT OF 25. 6. 1981 — CASE 105/80 DESMEDT v COMMISSION

In Case 105/80 REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunal du Travail [Labour Tribunal], Brussels, for a preliminary ruling in the action pending before that court between

THE COURT (Second Chamber) composed of: P. Pescatore, President of Chamber, A. Touffait and O. Due, Judges, Advocate General: F. Capotorti Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and written procedure

II — Written observation submitted to the Court

III — Oral procedure

Decision

Costs

I —. Facts and written procedure

II —. Written observation submitted to the Court

(a). It is not disputed that local staff are subject to the law of the place of employment, in the present case Belgian legislation on contracts of melpoyment, and that in his capacity as a probationary official he was himself subject to the Staff Regulations of the European Communities which have been complied with as regards the termination of his contract as a probationary official.

(b). The problem raised in the present case is not therefore that two different kinds of status actually overlap but rather that the status as a member of the local staff is placed in abeyance during the trial period as an official.

(c). It is common ground that under Belgian law a contract of employment may be broken by the employer only if he complies with certain procedures and by giving notice or paying appropriate compensation in lieu thereof. Belgian law also prohibits the conclusion of contracts for a trial period following entry into service. In their decisions, however, the courts have tempered that principle, taking the view that a contract for a trial period in a new post is permissible provided that during that trial period the pre-existing contract is merely suspended, so that it again takes effect forthwith if the trial period in the new post proves to be abortive.

(d). Since Mr Desmedt was subject to the status of a member of the local staff, his contract was governed exclusively by the provisions of Belgian law. His appointment as a probationary official was not accompanied by any express premature termination of his contract as a member of the local staff. That contract therefore continued to exist in spite of his appointment and the change of status resulting therefrom.

(e). In reply to the question submitted by the Tribunal du Travail, Brussels, the Court should rule that:

(a). According to the first paragraph of Article 4 of the Conditions of Employment of Other Servants, local staff, means staff engaged according to local practice. Title IV of the Conditions defines the special conditions applicable to local staff by stating that their conditions of employment, in particular as regards the manner of their engagement and termination of their contract, their leave and their remuneration are to be determined by each institution in accordance with current rules and practice in the place where they are to perform their duties (Article 79), that as regards social security, the institution is to be responsible for the employer's share of the social security contributions under current regulations in the place where the servant is to perform his duties (Article 80) and that any dispute between the institution and a member of the local staff is to be submitted to the competent court in accordance with the laws in force in the place where the servant performs his duties (Article 81). Furthermore, under Article 2 of Regulation No 260/68 of the Council of 29 February 1968 laying down the conditions and procedure for applying the tax for the benefit of the European Communities members of the local staff are not liable to the tax in question.

(b). It follows from the case-law of the Court that the conditions of employment of officials and servants other than local staff are determined by the Staff Regulations or by the Condtions of Employment and that the disputes which they occasion come within the exclusive jurisdiction of the Court whereas the conditions of employment of local staff are determined on the basis of national law and are capable of forming the subject-matter of proceedings before national courts.

(c). It also follows from the case-law of the Court that the procedure for dismissing an official on the ground of an unfavourable report at the end of the probationary period is governed by Article 34 (2) of the Staff Regulations and that a decision taken in accordance with that provision cannot give rise to any responsibility on the part of the Commission in regard to dismissed probationary officials.

(d). The probationary period, which is compulsory under the Staff Regulations, may not, from a logical point of view, have the effect of suspending a contractual relationship governed by private law which is broken solely because the person concerned becomes subject to a system of rules governed by public law, that is to say Community law, which precludes the application of national private law.

(e). The question submitted by the Tribunal du Travail, Brussels, should be answered as follows:

III —. Oral procedure

1. By judgment of 20 March 1980, which was received at the Court Registry on 28 March 1980, the Tribunal du Travail [Labour Court], Brussels, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question which seeks to ascertain the relationship between the Staff Regulations of the European Communities (hereinafter referred to as the Staff Regulations) and, more particularly, Article 34 thereof, and the Conditions of Employment of Other Servants of the European Communities (hereinafter referred to as the Conditions of Employment) and, more particularly, Articles 79 to 81 thereof (codified text, which is not authentic, published in the Official Journal of 28 September 1972, C 100).

2. This question was submitted in connexion with an action pending before the Tribunal du Travail between the Commission of the European Communities and a former member of the local staff who was appointed as a probationary official and dismissed at the end of his probationary period.

3. It is apparent from the file on the case, including the personal file of the plaintiff in the main action, that he was engaged by the Commission as a member of the local staff in Brussels on 19 August 1974, initially for a period of six months. Upon the expiry of that period, the administration notified the plaintiff that it had decided to renew his contract for an indefinite period in spite of the fact that his performance was unsatisfactory. It also gave warning that there would have to be a considerable improvement in his work, failing which the administration would be obliged to reconsider his position and the continuance of his activities in the service of the Commission.

4. The renewed contract of employment for an indefinite period was signed on 13 February 1975 by both parties. The service assessments in relation to the plaintiff drawn up in 1975 and 1976 show, albeit with some reservations, that his work was in general satisfactory.

5. At the time, the plaintiff participated successfully in an internal competition (COM/C/8/75) following which he was appointed on 7 January 1977, with effect from 1 January of the same year, as a probationary official in the capacity of clerical assistant in Grade C 5 and assigned to the Directorate General for Personnel and Administration in Luxembourg. An internal memorandum of 7 February 1977 states that the contract as a member of the local staff under which Mr Hugues Desmedt was employed in the service of the Commission in Brussels has been terminated with effect from the evening of 31 December 1976. That memorandum was forwarded, inter alia, to the department in which the plaintiff was working.

6. Following an unfavourable assessment in the report drawn up at the end of the probationary period, the appointing authority decided on 28 June 1977 to dismiss the plaintiff with effect from 1 July 1977. It appears from the file on the case that the plaintiff received compensation for dismissal, as provided for in the fourth subparagraph of Article 34 (2) of the Staff Regulations, which is the equivalent of two months' basic salary in the case of a probationary official who has completed at least six months' service. The Commission had also, with the intention, amongst other things, of enabling the plaintiff to become affiliated once again to a national social security scheme, offered him a contract, involving his being posted to Brussels, as an auxiliary servant for a period strictly limited to three months. However, that offer was rejected by the plaintiff.

7. Finally, it should be noted that the plaintiff submitted on 15 September 1977 a complaint against his dismissal which was rejected by the Commission by letter of 20 March 1978. In that letter, the Commission stated in particular that your appointment as a probationary official on 1 January 1977, which you accepted, necessarily entailed the termination of your contract of employment governed by private law since the status of a member of the local staff is incompatible with that of a public servant of an institution of the European Communities. The plaintiff did not avail himself of the further means of redress provided for in the Staff Regulations against the rejection of his complaint.

8. By a writ dated 15 December 1977, Mr Desmedt had meanwhile instituted proceedings before the Tribunal du Travail, Brussels, for an order requiring the Commission to pay him damages for breach of contract. In the document initiating the proceedings, he claims that the Commission should either have reinstated him in his former post or paid him damages in lieu of notice estimated at BFR 228930, equivalent to six months' salary calculated by reference to his last salary.

9. In support of his application, Mr Desmedt states that his appointment as a probationary official merely suspended his contract as a member of the local staff and that the contract should therefore again have taken effect following his dismissal as a probationary official. He compares his situation to that of a worker under a contract of employment in the private sector who is assigned to new duties for a trial period and he requests the national court to provide him with the same degree of protection as that which the courts would afford him if the succeeding contracts had been concluded in the private sector.

10. The Commission points out that the effect of an appointment as a probationary official is to make the employee subject to the Staff Regulations and necessarily terminates his contract as a member of the local staff which is governed by the Conditions of Employment.

11. To resolve this dispute, the Tribunal du Travail has submitted the following questions to the Court:

12. The relationship between the Staff Regulations and the Conditions of Employment of Other Servants and the determination of their respective fields of application must be defined on the basis of the provisions upon which the system governing the European public service is founded.

13. It is apparent from Article 24 (1) of the Treaty establishing a Single Council and a Single Commission of the European Communities of 8 April 1965 as well as from the preamble to Regulation No 259/68 of the Council of 29 February 1968 laying down the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Communities (Official Journal, English Special Edition, 1968 (I), p. 30), adopted pursuant to the above-mentioned provision, that the Staff Regulations and the Conditions of Employment constitute two complementary acts inasmuch as each governs specific categories of servants: the Staff Regulations apply to officials stricto sensu and to probationary officials whilst the Conditions of Employment apply to a number of other categories of servants including local staff. It is thus apparent that the Staff Regulations and the Conditions of Employment each cover a clearly defined range of persons and that accordingly it is not possible, except where there is an express derogation, for a servant to come simultaneously within the scope of both of those acts laid down by regulation.

14. It follows from those considerations that a member of the local staff who accepts an appointment as a probationary official is subject to the Staff Regulations alone, the application of which automatically terminates the relationships formerly governed by the Conditions of Employment without its being necessary for the employment relationships thereunder to be terminated expressly by the administration.

15. The situation might be different only where the administration takes an express decision to the contrary. It is necessary to add, moreover, that there is nothing to prevent the administration from reinstating in his former position, upon the expiry of the probationary period, a servant formerly subject to the Conditions of Employment but the post would then be a new one and thus there would be no resumption of the previous employment relationship.

16. It should also be observed that although the probationary period undoubtedly involves a measure of insecurity for the probationary official, he is none the less protected against any arbitrary dismissal by the means of redress provided for in Articles 90 and 91 of the Staff Regulations. In comparative terms, his position in that regard is no more insecure than that of a member of the local staff who may be dismissed at any time for incompetence subject to compliance with the appropriate procedures and time-limits.

17. In the light of the above considerations, the answer to the question submitted should be that the status of a probationary official who is subject to the Staff Regulations and that of a member of the local staff who is subject to the Conditions of Employment are incompatible inasmuch as the acquisition by a member of the local staff of the status of probationary official automatically causes the provisions of the Conditions of Employment to cease to apply and, consequently, causes the contract of employment entered into on the basis thereof to cease to have effect.

18. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the proceedings before the national court, the decision on costs is a matter for that court.

On those grounds, THE COURT (Second Chamber) in answer to the question referred to it by the Tribunal du Travail, Brussels, by judgment of 20 March 1980, hereby rules: