Case C‑63/12

European Commission

v

Council of the European Union

‛Action for annulment — Decision 2011/866/EU — Annual adjustment of the remuneration and pensions of officials and other servants of the European Union — Staff Regulations — Article 65 of the Staff Regulations — Method of adjustment — Article 3 of Annex XI to the Staff Regulations — Exception clause — Article 10 of Annex XI to the Staff Regulations — Serious and sudden deterioration in the economic and social situation — Adjustment of correction coefficients — Article 64 of the Staff Regulations — Council decision — Refusal to adopt the Commission’s proposal’

Summary — Judgment of the Court (Grand Chamber), 19 November 2013

1. Action for annulment — Actionable measures — Meaning — Measures producing binding legal effects — Council decision rejecting a proposal for a regulation — Included

   (Art. 263 TFEU)

2. Officials — Remuneration — Annual adjustment — Exception clause — Institutions’ margin of discretion — Scope

   (Staff Regulations, Annex XI, Arts 3 and 10)

3. Officials — Remuneration — Annual adjustment — Procedures laid down in Annex XI to the Staff Regulations — Amendment by the Council of the legal basis of a Commission proposal — Whether permissible

   (Staff Regulations, Annex XI, Arts 3 and 10)

4. Officials — Remuneration — Annual adjustment — Distribution of powers between different institutions

   (Staff Regulations, Art. 65; Annex XI, Arts 3 and 10)

5. Officials — Remuneration — Annual adjustment — Exception clause — Scope — Correction coefficients — Included

   (Staff Regulations of Officials, Arts 64 and 65; Annex XI, Art. 10)

6. Acts of the institutions — Statement of reasons — Obligation — Scope — Decision within a context known to the person addressed

   (Art. 263, second para., TFEU)

1.  See the text of the judgment.

   (see paras 28, 32, 33)

2.  While Article 3 of Annex XI to the Staff Regulations does not leave, to either the Commission or the Council, any margin of discretion in relation to the content of the proposal or the act to be adopted, Article 10 of that annex grants to the institutions a wide margin of discretion as to the content of the measures to be adopted.

   (see paras 57, 58)

3.  The institutions are obliged to decide each year on the adjustment of remuneration, either by undertaking a mathematical adjustment according to the method laid down in Article 3 of Annex XI to the Staff Regulations, or by setting aside that mathematical calculation in accordance with Article 10 thereof.

   Because there are fundamental differences between those two procedures as regards how they are to be pursued, in particular in relation to the determination of the content of the decision to be adopted and in relation to the institutions involved, a procedure initiated by a proposal from the Commission on the basis of Article 3 of Annex XI to the Staff Regulations cannot be converted by the Council, on the basis of that proposal, into a procedure based on Article 10 of that annex. Given that a proposal submitted on the basis of Article 3 does not involve the European Parliament, contrary to the position of a proposal based on Article 10 of Annex XI to the Staff Regulations, there can be no such conversion even if the European Parliament and the Council were to agree on it.

   (see paras 60, 61)

4.  Taking into consideration the specific features of the procedures laid down in Annex XI to the Staff Regulations and the context of those procedures, in particular the role conferred on the Council by Article 65 of the Staff Regulations in the annual review of the level of remuneration, it is the task of the Council to assess the objective data supplied by the Commission, in order to determine whether there is or is not such a serious and sudden deterioration as to permit the setting aside of the ‘normal’ method for the annual adjustment of remuneration and pensions laid down in Article 3 of Annex XI to the Staff Regulations and to trigger the procedure laid down in Article 10 thereof, so that the Council can decide together with the European Parliament on the appropriate measures proposed by the Commission in such a situation of crisis.

   Where the Council determines, on the basis of objective data supplied by the Commission, that there is a serious and sudden deterioration in the economic and financial situation within the Union within the meaning of Article 10 of Annex XI, the Commission is obliged to submit to the European Parliament and to the Council appropriate proposals on the basis of that article. The Commission has, however, a margin of discretion of its own as regards the content of those proposals, namely which measures it deems to be appropriate, taking into account the given economic and social situation and, where necessary, other factors to be taken into consideration, such as those relating to management of human resources, and in particular the needs of recruitment.

   (see paras 63, 66, 67, 72, 74)

5.  Taking into consideration the wording of Article 10 of Annex XI to the Staff Regulations and the scheme of that annex, the exception clause laid down in that Article 10 covers the annual adjustment of remuneration and pensions as a whole, including the adjustment of the applicable correction coefficients.

   (see paras 91, 92, 95)

6.  See the text of the judgment.

   (see paras 98-103)

Case C‑63/12

European Commission

v

Council of the European Union

‛Action for annulment — Decision 2011/866/EU — Annual adjustment of the remuneration and pensions of officials and other servants of the European Union — Staff Regulations — Article 65 of the Staff Regulations — Method of adjustment — Article 3 of Annex XI to the Staff Regulations — Exception clause — Article 10 of Annex XI to the Staff Regulations — Serious and sudden deterioration in the economic and social situation — Adjustment of correction coefficients — Article 64 of the Staff Regulations — Council decision — Refusal to adopt the Commission’s proposal’

Summary — Judgment of the Court (Grand Chamber), 19 November 2013

1. Action for annulment — Actionable measures — Meaning — Measures producing binding legal effects — Council decision rejecting a proposal for a regulation — Included

   (Art. 263 TFEU)

2. Officials — Remuneration — Annual adjustment — Exception clause — Institutions’ margin of discretion — Scope

   (Staff Regulations, Annex XI, Arts 3 and 10)

3. Officials — Remuneration — Annual adjustment — Procedures laid down in Annex XI to the Staff Regulations — Amendment by the Council of the legal basis of a Commission proposal — Whether permissible

   (Staff Regulations, Annex XI, Arts 3 and 10)

4. Officials — Remuneration — Annual adjustment — Distribution of powers between different institutions

   (Staff Regulations, Art. 65; Annex XI, Arts 3 and 10)

5. Officials — Remuneration — Annual adjustment — Exception clause — Scope — Correction coefficients — Included

   (Staff Regulations of Officials, Arts 64 and 65; Annex XI, Art. 10)

6. Acts of the institutions — Statement of reasons — Obligation — Scope — Decision within a context known to the person addressed

   (Art. 263, second para., TFEU)

1.  See the text of the judgment.

   (see paras 28, 32, 33)

2.  While Article 3 of Annex XI to the Staff Regulations does not leave, to either the Commission or the Council, any margin of discretion in relation to the content of the proposal or the act to be adopted, Article 10 of that annex grants to the institutions a wide margin of discretion as to the content of the measures to be adopted.

   (see paras 57, 58)

3.  The institutions are obliged to decide each year on the adjustment of remuneration, either by undertaking a mathematical adjustment according to the method laid down in Article 3 of Annex XI to the Staff Regulations, or by setting aside that mathematical calculation in accordance with Article 10 thereof.

   Because there are fundamental differences between those two procedures as regards how they are to be pursued, in particular in relation to the determination of the content of the decision to be adopted and in relation to the institutions involved, a procedure initiated by a proposal from the Commission on the basis of Article 3 of Annex XI to the Staff Regulations cannot be converted by the Council, on the basis of that proposal, into a procedure based on Article 10 of that annex. Given that a proposal submitted on the basis of Article 3 does not involve the European Parliament, contrary to the position of a proposal based on Article 10 of Annex XI to the Staff Regulations, there can be no such conversion even if the European Parliament and the Council were to agree on it.

   (see paras 60, 61)

4.  Taking into consideration the specific features of the procedures laid down in Annex XI to the Staff Regulations and the context of those procedures, in particular the role conferred on the Council by Article 65 of the Staff Regulations in the annual review of the level of remuneration, it is the task of the Council to assess the objective data supplied by the Commission, in order to determine whether there is or is not such a serious and sudden deterioration as to permit the setting aside of the ‘normal’ method for the annual adjustment of remuneration and pensions laid down in Article 3 of Annex XI to the Staff Regulations and to trigger the procedure laid down in Article 10 thereof, so that the Council can decide together with the European Parliament on the appropriate measures proposed by the Commission in such a situation of crisis.

   Where the Council determines, on the basis of objective data supplied by the Commission, that there is a serious and sudden deterioration in the economic and financial situation within the Union within the meaning of Article 10 of Annex XI, the Commission is obliged to submit to the European Parliament and to the Council appropriate proposals on the basis of that article. The Commission has, however, a margin of discretion of its own as regards the content of those proposals, namely which measures it deems to be appropriate, taking into account the given economic and social situation and, where necessary, other factors to be taken into consideration, such as those relating to management of human resources, and in particular the needs of recruitment.

   (see paras 63, 66, 67, 72, 74)

5.  Taking into consideration the wording of Article 10 of Annex XI to the Staff Regulations and the scheme of that annex, the exception clause laid down in that Article 10 covers the annual adjustment of remuneration and pensions as a whole, including the adjustment of the applicable correction coefficients.

   (see paras 91, 92, 95)

6.  See the text of the judgment.

   (see paras 98-103)