(Officials – Appointment in grade – Post of director advertised before 1 May 2004 – Amendment of the Staff Regulations – Article 2 and Article 5(5) of Annex XIII to the Staff Regulations – Classification in grade pursuant to new, less favourable provisions – Principle that all officials are entitled to reasonable career prospects)

Application: brought under Articles 236 EC and 152 EA, in which Mr da Silva seeks, first, annulment of the Commission’s decision of 18 May 2005 fixing his grade as a Director at A*14, step 2, secondly, his classification in grade A*15 in accordance with the provisions of vacancy notice COM/R/8003/03, published on 7 November 2003 (OJ C 268 A, p. 1), and full restoration of his career prospects with retrospective effect to the date of his rectified classification in grade and step, including payment of default interest.

Held: The Commission’s decision of 18 May 2005 is annulled inasmuch as it classifies the applicant as a Director in grade A*14, step 2. The Commission is ordered to pay its own costs and those of the applicant. The Council, as an intervener, is ordered to bear its own costs.

Officials – Recruitment – Application of Article 29(2) of the Staff Regulations

(Staff Regulations, Art. 29(2); Annex XIII, Art. 5(5); Council Regulation No 723/2004)

In the absence of any transitional provision in Regulation No 723/2004 amending the Staff Regulations of Officials and the Conditions of Employment of Other Servants, in order to determine the classification in grade and step of an official appointed to a higher post after that regulation came into force on 1 May 2004, as the result of a recruitment procedure launched before that date pursuant to Article 29(2) of the Staff Regulations, it is appropriate to be guided by the solution adopted by the Community legislature in Article 5(5) of Annex XIII to the Staff Regulations for appointments to the post of director through promotion, and to place the official in the ‘next higher grade’.

The recruitment procedure opened pursuant to Article 29(2) of the Staff Regulations can, when it benefits an official or a member of the temporary staff in active employment, be treated as a promotion. In such a case, appointment to a higher post cannot be considered to be a second recruitment to the institution with the effect of interrupting the career of the person concerned, but must be regarded as an advance in his career, and it cannot result in his demotion in grade or step and, consequently, in a decrease in his salary, without there being a breach of the principle that every official has the right to reasonable career prospects within his institution, as set out in the Staff Regulations. Such a solution is all the more necessary since it is in accordance with the administration’s duty to have regard for the welfare of officials, which in particular implies that when the relevant authority takes a decision concerning the position of an official, it should take into consideration all the factors capable of affecting its decision and that when doing so it should take into account not only the interests of the service but also those of the official concerned, since an official appointed to a higher post in recognition of his personal merits has a legitimate interest, provided it is not contrary to the rules of the Staff Regulations in force, in not having his remuneration reduced.

20/83 and 21/83 Vlachos v Court of Justice [1984] ECR 4149, para. 23; C-298/93 P Klinke v Court of Justice [1994] ECR I‑3009, para. 38

T-133/89 Burban v Parliament [1990] ECR II‑245, para. 27; T‑114/98 and T‑115/98 Rodríguez Pérez and Others v Commission [1999] ECR-SC I‑A‑97 and II‑529, para. 32

Joao da Silva, official of the Commission of the European Communities, residing in Brussels (Belgium), represented by G. Vandersanden and L. Levi, lawyers,

Commission of the European Communities, represented by J. Currall, H. Kraemer, and K. Herrmann, acting as Agents,

Council of the European Union, represented by M. Arpio Santacruz and I. Sulce, acting as Agents,

composed of S. Van Raepenbusch (Rapporteur), President, I. Boruta and H. Kanninen, Judges,

having regard to the written procedure and further to the hearing on 15 March 2007,

1 By application lodged by fax at the Registry of the Civil Service Tribunal on 2 March 2006 (the original of which was lodged on 6 March 2006), M. da Silva applied, in particular, for:

– annulment of the decision of the Commission of the European Communities of 18 May 2005 inasmuch as it grades him as a director in Grade A*14, step 2;

– his grading in Grade A*15, in accordance with the provision of the notice of vacancy COM/R/8003/03, published on 7 November 2003 (OJ 2003 C 268 A, p. 1, ‘the notice of vacancy’); and

– the complete retrospective reconstruction of his career from the date of his grading in grade and step, thus corrected, including payment of default interest.

2 Article 29 of the Staff Regulations of Officials of the European Communities (‘the Staff Regulations’), in the version in force until 30 April 2004, read as follows:

‘1. Before filling a vacant post in an institution, the appointing authority shall first consider:

(a) whether the post can be filled by promotion or transfer within the institutions;

and then follow the procedure for competitions on the basis either of qualifications or of tests, or of both qualifications and tests. Annex III lays down the competition procedure.

The procedure may likewise be followed for the purpose of constituting a reserve for future recruitment.

2. A procedure other than the competition procedure may be adopted by the appointment authority for the recruitment of Grade A1 or A2 officials and, in exceptional cases, also for recruitment to posts which require special qualifications.’

3 Council Regulation (EC, Euratom) No 723/2004 of 22 March 2004 amending the Staff Regulations of Officials of the European Communities and the Conditions of Employment of Other Servants of the European Communities (OJ 2004 L 124, p. 1), which came into force on 1 May 2004, introduced a new career structure.

‘There is a clear need to strengthen the principle of career development based on merit, establishing a closer link between performance and remuneration by providing greater incentives for good performance through structural changes to the careers system, whilst ensuring equivalence of average career profiles between the new and the old structures, in keeping with the establishment plan and budgetary discipline.’

5 The introduction of that new career structure was accompanied by transitional measures set out in Annex XIII to the Staff Regulations, as amended by Regulation No 723/2004. Thus Article 2(1) of that annex provided inter alia that, concerning officials having one of the administrative statuses set out in Article 35 of the Staff Regulations, Grades A3 and A2 were to be renamed A*14 and A*15 respectively.

‘An official in [G]rade A3 on 30 April 2004 shall, upon appointment after that date as Director, be promoted to the next higher grade, in accordance with Article 7(5) of this Annex. The last sentence of Article 46 of the Staff Regulations shall not apply.’

7 Under Article 12(3) of Annex XIII to the Staff Regulations, officials who have been included in a list of suitable candidates before 1 May 2006 and are recruited between 1 May 2004 and 30 April 2006 shall:

– if the list was drawn up for category A*, B* or C*, be graded in the grade published in the competition;

– if the list was drawn up for category A, LA, B or C, be graded in accordance with the following table:

8 The move from the old remuneration table to the new is the subject of Article 7 of Annex XIII to the Staff Regulations which provides, inter alia, in Article 7(1), that ‘the renaming of grades pursuant to Article 2(1) of this Annex shall not lead to any changes in the basic monthly salary paid to each official’.

‘If, during the transition period from 1 May 2004 to 31 December 2008, an official’s net monthly remuneration, before application of any correction coefficient, is lower than the net remuneration he would have received under the same personal conditions in the month before 1 May 2004, he shall be entitled to a compensatory allowance equal to the difference. This provision shall not apply where the reduction of the net remuneration results from the annual pay adjustment referred to in Annex XI to the Staff Regulations. This net income guarantee shall not cover the effect of the special levy, the changes in the pension contribution rate or the changes in the arrangements for transferring part of the salary.’

10 The notice of vacancy to fill the post of Director Grade A2 of the ‘Emerging Technologies & Infrastructures, Application’ Directorate of the ‘Information Society’ Directorate General (DG), published on 7 November 2003, pursuant to Article 29(2) of the Staff Regulations provided in the recruitment conditions that ‘the remuneration and the conditions of employment are those which are provided for officials of the European Union in Grade A2’. The time‑limit for sending applications was 5 December 2003.

11 The applicant took up his duties at the Commission on 16 March 1991 as a member of the temporary staff in Grade A4 and was posted to DG ‘Telecommunications, Information Industries and Innovation’.

12 On 16 March 1993, the applicant was appointed, still as a member of the temporary staff, to the post of Head of Unit B3 ‘Mobile Communications’ in the same DG, then called ‘Information and Technology Industries and Telecommunications’. He was promoted to Grade A3, step 4, on 1 February 1997.

13 By decision of 17 April 2002, the applicant was appointed a probationary official, with effect from 16 March 2002, and classification in Grade A3, step 6. He retained the post which he occupied at that time as head of unit. On 16 December 2002, the applicant was established in his post.

14 In addition, he was requested, on two occasions, to fill the post of acting director, in accordance with Article 7(2) of the Staff Regulations: first, from November 2002 to January 2003 and, second, from 16 April to 16 September 2004.

15 On 20 November 2003, the applicant presented his candidature for the post to which the notice of vacancy referred.

16 As at 1 May 2004, the date on which Regulation No 723/2004 came into force, the grade held by the applicant, Grade A3, step 7, was renamed A*14, step 7.

17 At its meeting of 7 July 2004, the College of Commissioners appointed the applicant to the post of director to which the notice of vacancy referred. Point 7.11 of the minutes of that meeting indicated that the date for the decision to come into effect would be fixed at a later date.

19 By letter of 11 January 2005, Ms S., Director of the ‘Staff and Careers’ Directorate of DG ‘Personnel and Administration’ , informed the applicant of the difficulties experienced by the administration in determining his grading, which had led it, on 25 October 2004, to consult the legal service, which had yet to reply.

20 By letter of 21 February 2005, addressed to the Director General of DG ‘Personnel and Administration’, the applicant expressed his surprise at the delay in adopting the formal decision appointing him to the post of director, in the following words:

‘The failure to decide my case is all the harder to understand in view of the fact that the announcement of the post published in the Official Journal clearly stated that it would be filled in Grade A2, in other words in Grade A*15 [from 1 May 2004]. I would like to point out, for all purposes, that I am today in Grade A*14 [step] 8, in other words the final step in Grade A*14 and it would at least be normal for me to be appointed in Grade A*15 without loss of salary.

21 By note of 2 March 2005, Ms S. informed the applicant that, for reasons beyond its control, the administration was still not in a position to drawn up the formal act appointing him as the legal service had still not given an opinion on the question referred to it on 25 October 2004.

22 By letter of 7 April 2005, the applicant expressed his disappointment that no formal decision had, as yet, been taken in his regard and indicated his intention to bring the matter to the attention of Ms Reding, Commissioner, and Mr Barroso, President of the Commission, if no ‘appropriate and reasonable’ decision were taken within the period of one week.

23 By note of 8 April 2005, Ms S. informed the applicant that, having received the legal service’s opinion, the administration was in a position to prepare the formal appointment decision. She stated, first, that the applicant did not have the necessary seniority in Grade A3 (renamed A*14 as from 1 May 2004) to entitle him to be promoted to the higher grade as an ‘internal’ candidate and that it was not therefore possible to promote him to Grade A*15, second, that it was necessary to treat his appointment as a new recruitment in Grade A*14, step 2, without multiplication factor (correction coefficient), in application of the normal criteria and, lastly, that it was not possible for the applicant to continue in Grade A*14, step 8.

24 By letter of 11 April 2005, the applicant informed the Director General of DG ‘Personnel and Administration’ that he was unable to accept a grading which would effectively reduce his ‘current’ rights (salary) and future rights (pension), in disregard of the notice of vacancy and Article 5(5) of Annex XIII to the Staff Regulations. Consequently, he requested that, before the formal appointment decision was signed by the President of the Commission, he should be provided with an explanation of the reasons which led the administration to depart from the notice of vacancy and the abovementioned provision.

25 By decision of 18 May 2005, received by the applicant on 27 May 2005, signed by the President of the Commission, the applicant’s appointment to the post of director was confirmed with effect from 16 September 2004 and his grading was fixed in Grade A*14, step 2, seniority in step taking effect from 1 September 2004.

26 By note of 30 May 2005, the applicant informed the President of the Commission that he felt obliged to decline the offer of appointment since the grading in Grade A*14, step 2, which he would receive as a result, would have the effect of reducing his net monthly salary by approximately EUR 1 000 and would amount to an implicit demotion, constituting a sanction, rather than to a promotion. Furthermore, he stated that the notice of vacancy expressly referred to Grade A2, renamed A*15 as from 1 May 2004, and that he would not have applied if he had known that he would be graded in Grade A*14, step 2. He asked the President of the Commission to suspend his appointment pending the outcome of the pre‑litigation procedure which he intended to initiate against the decision of 18 May 2005 and claimed that ‘the right decision would be to offer [him] a grading which adversely affected neither [his] rights nor [his] salary’. A copy of that letter was also sent to the Director General of DG ‘Personnel and Administration’.

27 On 14 July 2005, the applicant lodged a complaint under Article 90(2) of the Staff Regulations seeking, first, annulment of the Commission decision of 18 May 2005 inasmuch as it graded him as a director in Grade A*14, step 2 (‘the contested decision’), second, a grading in Grade A*15, without loss of salary, with effect from 16 September 2004 or, in the alternative, appointment to a step which would not change his salary conditions, retaining the grade and step which he had held up to that point, namely Grade A*14, step 8.

28 By decision of 14 November 2005, notified by letter of 21 November 2005, the appointing authority rejected the applicant’s complaint.

29 By note of 12 January 2006 from the Office for the Administration and Payment of Individual Entitlements of the Commission (‘the PMO’), the applicant was informed that, pursuant to Article 85 of the Staff Regulations, a sum of EUR 12 615.85 would be recovered by staged deductions from his salary, from February to July 2006, to cover the amount of the overpayment to him, and corresponding to the difference in remuneration between his former Grade A*14, step 8 and Grade A*14, step 2 accorded to him in execution of the contested decision.

30 By note of 23 January 2006, sent by the applicant to the Director General of DG ‘Personnel and Administration’, following a meeting which took place between them on 19 January 2006, the applicant stated that he was unable ‘to accept the post of Director in Grade A*14, step 2, without multiplication factor [correction coefficient] or nominal protection factor’ and requested ‘that [his] salary of January 2006 should be revised upwards … and that the order for recovery of more than EUR 12 600 in respect of salary allegedly unduly received should be annulled’. The applicant further stated in that note:

‘I should like to point out that I have never accepted my appointment in Grade A*14 step 2.’

31 By letter of 13 February 2006, the Director General of DG ‘Personnel and Administration’ informed the applicant that, in agreement with the cabinet of the Vice President of the Commission, Mr Kallas, he did not intend to propose to the College of Commissioners that they reconsider the contested decision.

32 On 21 February 2006, the applicant wrote once more to the Director General of DG ‘Personnel and Administration’ regarding his refusal of the post of director in Grade A*14, step 2, and invited the appointing authority to state their views on that question, since he still had not received any explanation or statement of reasons from that quarter and to take all appropriate steps so that his salary be corrected upwards as of January 2006 as well as to annul the order for recovery of the amount allegedly unduly received. He also informed the Director General of DG ‘Personnel and Administration’ that he intended to bring an action against the rejection of his complaint, in particular, because the time‑limit for actions were a matter of public policy and stating that his action could not be considered as calling into question his refusal to accept the post of Director. The Commission did not reply to that letter.

33 By note of 22 February 2006 sent to her fellow member of the Commission, Mr Kallas, Ms Reding stated that she was astonished by the situation in which the applicant had been placed and invited Mr Kallas to intervene in order to find a solution, so as to avoid the applicant’s case coming to the attention of the European Parliament or the wider public.

– declare that the action is admissible and well‑founded, including the plea of illegality which it contains;

– consequently, restore him to the grade and step in which he would normally have been classified (or its equivalent according to the grading introduced by the new version of the Staff Regulations applicable as from 1 May 2004) according to the provisions of the notice of vacancy;

– completely retrospectively reconstitute his career from the date of his grading in grade and step, thus corrected, (granting him the benefit of his experience in the grading which is thus corrected, his promotion rights and his pension rights), including the payment of interest for delay at a rate of two points above the rate set by the European Central Bank for its main refinancing operations, as applicable during the period in question, on all the sums representing the difference between the salary corresponding to his grading in the decision to recruit and the grading to which he was entitled until the date of the correct decision as to his grading;

36 By order of the Tribunal of 17 May 2006, the Council of the European Union was granted leave to intervene in support of the forms of order sought by the defendant.

37 The applicant puts forward, in support of his action, four pleas in law alleging infringement of:

– Article 7(1) of the Staff Regulations and the principles of non‑discrimination, equivalence of posts and grades and the interests of the service;

– the principles of non-retroactivity and legal certainty, protection of legitimate expectations and acquired rights and the right to reasonable career prospects;

– the principle of sound administration and the duty to have regard to the interests of officials.

38 In the alternative, if Article 12(3) of Annex XIII to the Staff Regulations is held to constitute the legal basis for the contested decision, the applicant puts forward a plea of illegality against that provision.

39 It is appropriate to examine the first, third and fourth pleas in law at the outset and together.

Regarding the alleged infringement of Articles 2(1) and Article 5(5) of Annex XIII to the Staff Regulations

40 With regard to the first plea in law, the applicant notes that the defendant makes a distinction between ‘external’ candidates, who participate in recruitment procedures open to candidates whether they already work for the institution or not, and ‘internal’ candidates, who participate in recruitment procedures which are open solely to persons already working for the institution. On the basis of that distinction, the defendant considered that Article 12(3) of Annex XIII to the Staff Regulations required it to determine the applicant’s grade and step on his appointment, since Grade A2 no longer existed as of 1 May 2004.

41 In that regard, the applicant does not dispute that he did not have the seniority in step necessary to put himself forward as a candidate in a promotion procedure opened pursuant to Article 29(1) of the Staff Regulations. However, it was actually because, although it had followed the promotion procedure for which those provisions provide, the defendant had not found a candidate who met the requirements of the post to be filled that it opened the recruitment procedure under Article 29(2) of the Staff Regulations. Moreover, although the question whether a person is an official or not at the moment when the selection procedure is launched constitutes an essential difference in the legal situation of the candidates justifying the application of different provisions of the Staff Regulations to them, the applicant was indeed an official at the moment when the selection procedure was launched, meaning that his situation could not be governed on the basis of the provisions applicable to persons newly recruited.

42 The applicant adds that Annex XIII to the Staff Regulations, which does not expressly govern the case of an appointment occurring after 1 May 2004 as the result of a recruitment procedure opened before that date pursuant to Article 29(2) of the Staff Regulations, did however introduce the necessary provisions to enable the old grades to be converted into the new grades, defined in that annex. Such is the purpose of Article 2(1) of Annex XIII to the Staff Regulations, pursuant to which Grade A2 was renamed A*15.

43 Although Article 2(1) of Annex XIII to the Staff Regulations concerns only grades of officials having one of the statuses set out in Article 35 of the Staff Regulations at 1 May 2004, and the applicant was not at that time a director having one of those statuses and was not therefore in Grade A2, the fact remains that, in the absence of a specific provision, the application by analogy of Article 2(1) of Annex XIII to the Staff Regulations would have solved the problem arising from the ‘disappearance’ of Grade A2, referred to in the notice of vacancy, without leading to the demotion of the applicant on his appointment to a higher post.

44 Conversely, the applicant disputes any application by analogy of Article 12(3) of Annex XIII to the Staff Regulations. That provision only refers to competition procedures, whilst Article 29(2) of the Staff Regulations, which lays down the procedure as a result of which he was appointed director, specifies expressly that the recruitment procedure which it lays down differs from the competition procedure. Moreover, Article 12(3) of Annex XIII, inasmuch as it introduces a derogation from the rules for converting grades set out in Article 2(1) of that annex, must be interpreted restrictively. In the alternative, the applicant puts forward a plea of illegality in respect of Article 12(3) of Annex XIII to the Staff Regulations, which is the subject of separate arguments in his pleadings.

45 The applicant submits that, in order to determine his grading, the defendant should have applied Article 5(5) to Annex XIII to the Staff Regulations, which refers specifically to the situation of an official in Grade A3 as at 30 April 2004, who, if appointed a director after that date, must be promoted to the next higher grade.

46 The applicant accepts that his appointment did not occur as the result of a promotion within the meaning of Article 45 of the Staff Regulations. However, he takes issue with the defendant’s interpretation to the effect that Article 5(5) to Annex XIII to the Staff Regulations applies only to cases of promotion within the meaning of Article 45. If the legislature had intended to limit that provision to cases of that type, it would have used the term ‘promoted’ rather than ‘appointed’. Moreover, the fact that the new career structure makes provision for two grades for the type of post of director – A*14 and A*15 – as opposed to a single grade under the former system – A2 – does not mean that Article 5(5) of that annex refers only to promotions within the meaning of Article 29(1) of the Staff Regulations.

47 The applicant concludes that, in applying Article 12(3) of Annex XIII to the Staff Regulations, the defendant infringed Articles 2(1) and Article 5(5) of that annex. He adds that, while various possibilities existed for determining his grading, it was for the defendant, if only on the basis of its duty to have regard for the welfare of officials, to chose the one which was most favourable for the party concerned.

48 The defendant observes that, if the post in question had been published pursuant to Article 29(1) of the Staff Regulations, the applicant would not even have been able to submit his candidature, since he did not have the required seniority, as an official established in Grade A3, to entitle him to be promoted to Grade A2. It was only because the post in question was open to ‘external’ candidates, pursuant to Article 29(2) of the Staff Regulations that the applicant was eligible and could take part in the selection procedure. It follows that the rules which apply are those which govern the appointment of any ‘external’ candidate as an official. At the oral hearing, the defendant treated the applicant’s appointment pursuant to Article 29(2) of the Staff Regulations as a ‘second recruitment’ to the institution.

49 According to the defendant, that argument does not run counter to the principle of equal treatment, since whether or not a person is an official at the moment when the selection procedure is launched constitutes a fundamental difference between candidates, which justifies the application to the applicant of the provisions of the Staff Regulations applicable to new recruits.

50 With regard to the applicability of Article 2(1) of Annex XIII to the Staff Regulations, the defendant contends that it covers only persons who were already officials before 1 May 2004. However, according to the defendant, if Article 2 is to apply by analogy to the classification in grade on recruitment, logic requires that that provision apply both to a recruitment made at the end of a competition procedure and to that which occurs at the end of a procedure conducted pursuant to Article 29(2) of the Staff Regulations. Those two procedures, although different as to their goals, are not different where there is a change to the career structure between the publication of the notice of competition or notice of vacancy and the appointment.

51 With regard to the applicability of Article 5(5) to Annex XIII to the Staff Regulations, the defendant maintains that that provision of the annex is one of those by which the legislature intended to maintain the reasonable career prospects of officials who, before 1 May 2004, already held that status, and that it concerns only promotion, and therefore the procedure pursuant to Article 29(1) of the Staff Regulations, and not that pursuant to Article 29(2) of the Staff Regulations. With regard to officials in Grade A3, their reasonable career prospects included, before 1 May 2004, the possibility of a promotion to Grade A2 on appointment to a post of director or principal adviser. In the new career structure, director posts are filled in Grade A*14, with the possibility of promotion to Grade A*15. It is as an exception to that rule that Article 5(5) of Annex XIII to the Staff Regulations provides for promotion to Grade A*15 for officials holding the former Grade A3, before 1 May 2004, on their appointment to a post of director. It follows from that provision that, where a post of director is filled pursuant to Article 29(1) of the Staff Regulations, Article 5(5) to Annex XIII to the Staff Regulations is to be interpreted as meaning that the appointment to such a post requires two years’ seniority in Grade A3. Conversely, that latter provision does not apply where the recruitment takes place according to the procedure in Article 29(2) of the Staff Regulations.

The alleged breach of the principles of non-retroactivity and legal certainty, protection of legitimate expectations and acquired rights and the right reasonable career prospects

52 Under the third plea in law, the applicant claims that the contested decision results in his demotion. As a result of that decision, he was classified in Grade A*14, step 2, despite being in Grade A*14, step 8 before the contested decision was formally adopted. Such an outcome adversely affects his acquired rights regarding grading and financial rights, which would be diminished substantially, and regarding his reasonable career prospects.

53 The applicant claims that the Staff Regulations, both in the text itself and in the transitional measures for which it provides, lays down the principle of acquired rights. Articles 7(1) and 19 of Annex XIII to the Staff Regulations guarantee the maintenance of basic salary as well as the level of remuneration, regardless of the renaming of grades. Likewise, Article 45a of the Staff Regulations ensures that the appointment to a post in function group AD does not change the grade or step that the official has attained at the moment of his appointment. Lastly, Article 46 of the Staff Regulations guarantees acquired rights of seniority in step on appointment to a higher grade.

54 The defendant also infringed the principle of the protection of legitimate expectations, the applicant being entitled to expect that the appointment decision which occurred at the end of the recruitment procedure opened on 7 November 2003 would comply with the notice of vacancy, since nothing in the Staff Regulations allows an official’s grading to be called into question by reason of his appointment to a higher grade on the basis of Article 29(2) of the Staff Regulations.

55 The applicant alleges that at no moment did the defendant take into account the fact that he was already an official both at the date the recruitment procedure was opened and when the contested decision was adopted. In addition, the application of new rules resulting from the reform of the Staff Regulations could not have the effect of adversely affecting the rights acquired by the applicant before 1 May 2004 as an official.

56 The defendant contends that the applicant has not been demoted, his classification in Grade A*14, step 2, resulting from his appointment as a director following the recruitment procedure conducted in application of Article 29(2) of the Staff Regulations.

57 With regard to the alleged infringement of financial rights acquired, the defendant contends that Articles 7(1) and 19 of Annex XIII to the Staff Regulations deal with what is termed ‘protection of the nominal amount’ and refer to the case of an official whose situation under the Staff Regulations remained unchanged after Regulation No 723/2004 came into force, neutralising thus the changes brought about by that regulation to a pre‑existing situation which continues to exist. The scope of Article 19 of Annex XIII to the Staff Regulations covers those situations in which the coming into force of the regulation may have had an impact on the allowances received by officials. Article 45a of the Staff Regulations deals with the certification procedure, which is comparable to a promotion procedure, as provided for by Article 29(1)(a)(ii) and (iii) of the Staff Regulations, rather than to a recruitment.

58 With regard to the alleged breach of the principle of the protection of legitimate expectations, the applicant has still not demonstrated that the administration gave him specific, unconditional and consistent assurances that his grading would be in Grade A*15. The defendant notes that, in accordance with the case law, for a legitimate expectation to arise, the assurances given must comply with the relevant rules (Case T‑46/90 Devillez and Others v Parliament [1993] ECR II‑699, paragraph 38, Case T‑381/00 Wasmeier v Commission [2002] ECR‑SC I‑A 125 and II‑677, paragraph 106). It contends that Article 12(3) of Annex XIII to the Staff Regulations provides clearly for the grading of officials recruited before 1 May 2004 in the grades which it sets out, without leaving the appointing authority any discretion.

59 Moreover, the notice of vacancy for a given post, although it may constitute a legal framework binding on the appointing authority in respect of the candidate’s qualifications, does not constitute a binding framework in respect of the content of the future recruitment decision for the officials selected on the basis of that notice. That latter recruitment decision is solely subject to the provisions of the Staff Regulations in force at the moment of its adoption.

The alleged breach of the principle of sound administration and of the duty to have regard for the welfare of officials

60 With regard to the fourth plea in law, the applicant claims that the defendant breached the principle of sound administration and the duty to have regard to the interests of officials, in that it was not at any moment possible for the applicant to know that he would be recruited in a grade lower than that referred to in the notice of vacancy, or to one linked to his post of head of unit, not least since the decision of the College of Commissioners of 7 July 2004, appointing him director, gives no information as to his grading and the contested decision failed to state any specific legal base authorising his grading.

61 The applicant notes that the question of his grading was so unclear that DG ‘Personnel and Administration’ considered it necessary to consult the legal service, which took a considerable time to give its advice.

62 The defendant contends that the applicant’s argument that the contested decision does not refer expressly to Article 12(3) of Annex XIII to the Staff Regulations does not affect the validity of that decision, but constitutes a criticism of the reasons stated, which may, in accordance with settled case‑law, be completed by that contained in the reply to the complaint. Moreover, the long period between the applicant taking up his duties as director and the formal adoption of the contested decision, and the consultation of the legal service, are factors which are not capable of calling into question the legality of the contested decision.

63 It should be noted at the outset that Annex XIII to the Staff Regulations, the aim of which is to lay down ‘transitional measures’ following the coming into force of Regulation No 723/2004, contains no provision which governs the case of an official appointed to a higher post after 1 May 2004, as the result of a recruitment procedure opened pursuant to Article 29(2) of the Staff Regulations before that date.

64 Neither Article 5(5) to Annex XIII to the Staff Regulations, on which the applicant relies, nor Article 12(3) of that annex, which the defendant applied by analogy to the present case, apply, in the first analysis, to such a situation.

65 Those provisions relate exclusively to the possibility of filling a vacant post in an institution by means of promotion pursuant to Article 29(1)(a)(iii) of the Staff Regulations concerning Article 5(5) of Annex XIII to the Staff Regulations, or by means of the competition procedure, in accordance with Article 12(3) of that annex.

66 Although Article 5(5) of Annex XIII to the Staff Regulations refers generally to the ‘appointment’ of an official in Grade A3 on 30 April 2004, to a post of director after that date, it does state that the interested party is ‘promoted’ to the next higher grade and that the final sentence of Article 46 of the Staff Regulations, regarding promotion, does not apply.

67 Clearly, the recruitment procedure provided for by Article 29(2) of the Staff Regulations, which was actually followed in this case, is about neither promotion in the strict sense, nor, as is clear from the terms themselves of that provision, the competition procedure.

68 The fact remains that the applicant’s case raises the question of his grading which, despite the lack of specific provisions in the Staff Regulations, cannot be left unanswered by the administration. Even if Article 5(5), or Article 12(3) of Annex XIII to the Staff Regulations does not, as such, fall to be applied, it is conceivable that the system provided for by one or other of those provisions may be retained in this case pursuant to one of the general principles of the law of the Community’s civil service, such as those referred to in the context of the third and fourth pleas in law.

69 In that regard, it should be noted that the applicant, in Grade A3, step 7, on 30 April 2004 (renamed A*14, step 7 as of 1 May 2004, pursuant to Article 2(1) of Annex XIII to the Staff Regulations), was appointed director as the result of a recruitment procedure pursuant to Article 29(2) of the Staff Regulations and classified in Grade A*14, step 2, in other words in the same grade as he previously held, but in a lower step.

70 It is necessary to examine, first, in the light of the principle that all officials have a right to reasonable career prospects in their institution, whether it is possible validly to justify such a grading or whether, as the applicant claims, the appointing authority is obliged to classify him in the next higher grade, namely Grade A*15.

71 First, the principle that all officials have the right to reasonable career prospects in their institution was referred to by the Court of Justice and the Court of First Instance in connection with the order of priority laid down by Article 29(1) of the Staff Regulations, according to which the appointing authority, when it contemplates filling vacant posts, is obliged, first, to examine the possibilities of promotion or transfer within the institution, and then, after that examination, the possibility of organising a competition internal to the institution (Joined Cases 20/83 and 21/83 Vlachos v Court of Justice [1984] ECR I‑4149, paragraphs 19, 23 and 24; Case T‑3/97 Campogrande v Commission [1998]ECR‑SC I‑A‑89 and II‑215, paragraph 65; and Case T‑372/00 Campolargo v Commission [2002] ECR‑SC I‑A‑49 and II‑223, paragraphs 91 and 92).

72 That does not mean, however, that the only expression of the principle that all officials have a right to reasonable career prospects within their institutions is to be found in the order of priority laid down by Article 29(1) of the Staff Regulations.

73 Second, it is necessary to state that Article 29(2) of the Staff Regulations has been interpreted as offering officials and members of the temporary staff the possibility, albeit by way of exception, to benefit from an appointment to a higher post and, thus, to an advancement in their careers. The recruitment procedure for which that provision provides refers not only to the recruitment of persons not yet in the service of the Communities, but also to officials and members of the temporary staff who are already in post. As the Court held in its judgment in Case 176/73 Van Belle v Council [1974] ECR 1361, paragraph 10, it is neither just nor in the interest of the service that the said procedure should be applied only in respect of candidates who are not officials, in view of the fact that it is substituted for a competition, internal or general, from which candidates who are also officials could not have been excluded.

74 In other words, like a general competition (Van Belle v Council, paragraph 8), the procedure provided for by Article 29(2) of the Staff Regulations does not exclusively constitute an external means of recruitment, as opposed to an internal competition or appointment to a higher grade by promotion, since it is open both to candidates coming from outside the Community institutions and to other candidates who already have the status of officials or of members of the temporary staff.

75 In those circumstances, contrary to the defendant’s contention, the appointment of an official in active employment to a higher post pursuant to Article 29(2) of the Staff Regulations, cannot be considered to be a second recruitment to the institution with the effect of interrupting his career. In such a case, it is appropriate rather to consider that the procedure chosen by the appointing authority must be treated as a promotion procedure, as the Court held in its judgment in Vlachos v Court of Justice, paragraph 23, with regard to filling a post through a competition which is internal to the institution.

76 Since the appointment of an official to a higher post constitutes an advance in his career, it cannot result in his demotion in grade or step and, consequently, in a decrease in his salary, without there being a breach of the principle that every official has the right to reasonable career prospects within his institution, as set out in the Staff Regulations.

77 It is clear from the table of basic monthly salaries, fixed for each grade and step, in Article 66 of the Staff Regulations and, transitionally, in Article 2 of Annex XIII to the Staff Regulations, that any advancement in career, and indeed in grade, must normally lead to an increase in the basic monthly salary and, if this is not the case, at least to the maintenance of the level of remuneration received before the appointment to the higher post. Such a salary progression corresponds moreover to the objective set out at recital 10 in the preamble to Regulation No 723/2004 and forms the basis for Article 46 of the Staff Regulations, which provides, in the case of promotion, for the grading of an official, in the first or even in the second step of the higher grade.

78 Third, it is necessary to determine the grading which, in view of the foregoing, should actually have been assigned to the applicant following his appointment as director.

79 In that regard, it must be pointed out that director’s posts can be filled in Grades A*14 and A*15, in accordance with Annex XIII.1 (‘Types of post during the transitional period’) of the Staff Regulations. Inasmuch as the specific recruitment procedure provided for in Article 29(2) of the Staff Regulations can, when it benefits an official or a member of the temporary staff in active employment, be treated as a promotion, as follows from paragraph 75 of this judgment, it is appropriate to be guided by the solution adopted by the Community legislature itself at Article 5(5) of Annex XIII to the Staff Regulations and to grade in the ‘next higher grade’ – namely, in the present case, Grade A*15, since the applicant was head of unit in Grade A*14 before his appointment as director – in accordance with Article 7(5) of Annex XIII.

80 Such a solution is all the more necessary since it is in accordance with the administration’s duty to have regard for the welfare of officials, which in particular implies, according to settled case‑law, that when the relevant authority takes a decision concerning the position of an official, it should take into consideration all the factors capable of affecting its decision and that when doing so it should take into account not only the interests of the service but also those of the official concerned (Case C‑298/93 P Klinke v Court of Justice [1994] ECR I‑3009, paragraph 38; Case T‑133/89 Burban v Parliament [1990] ECR II‑245, paragraph 27; and Joined Cases T‑114/98 and T‑115/98 Rodríguez Pérez and Others v Commission [1999] ECR‑SC I‑A‑97 and II‑529, paragraph 32). In the present case, the applicant had a legitimate interest, provided it was not contrary to the rules of the Staff Regulations in force, in not having his remuneration reduced after his appointment to a higher post in recognition of his personal merits.

81 Regarding, lastly, the forms of order sought in the action which concern the reconstitution of the applicant’s career, they clearly relate to measures which the defendant will be called on to make to ensure compliance with this judgment.

82 In view of the foregoing, it must be held that the appointing authority breached the principle that all officials have a right to reasonable career prospects within their institution, by assigning to the applicant – who was appointed to a higher post after 1 May 2004, as the result of a recruitment procedure launched before that date pursuant to Article 29(2) of the Staff Regulations – to a grade and step which was lower than that which he held before his appointment.

83 Consequently, it is not necessary to examine the other arguments advanced in support of the first, third and fourth pleas in law, or indeed the second plea in law and the plea of illegality put forward in respect of Article 12(3) of Annex XIII to the Staff Regulations, and the contested decision must be annulled.

84 As the Court of First Instance held in its judgment in Case F‑16/05 Falcione v Commission [2006], not yet published in the ECR, paragraphs 77 to 86), as long as the Rules of Procedure of the Tribunal and, in particular, the specific provisions on costs, have not entered into force, the Rules of Procedure of the Court of First Instance of the European Communities alone are to be applied, mutatis mutandis, to the Tribunal pursuant to Article 3(4) of Council Decision 2004/752/EC, Euratom of 2 November 2004 establishing the European Union Civil Service Tribunal (OJ 2004 L 333, p. 7), until the entry into force of the Tribunal’s own Rules of Procedure.

85 Under Article 87(2) of the Rules of Procedure of the Court of First Instance, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. As the defendant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant.

86 In addition, pursuant to the first paragraph of Article 87(4) of those rules of procedure, the Member States and the institutions which intervened in the proceedings are to bear their own expenses. Consequently, the Council, as intervener, must be ordered to pay its own costs.

1. Annuls the decision of the Commission of the European Communities of 18 May 2005, inasmuch as it grades Mr da Silva as a director in grade A*14, step 2;

2. Orders the Commission of the European Communities to bear its own costs and to pay Mr da Silva’s costs;

The texts of this decision and of those of the Community Courts cited therein and not yet published in the ECR are available on the internet site of the Court of Justice: www.curia.europa.eu

Grade of the competition	Grade of recruitment
A/LA 8	A*5
A/LA 7 and A/LA 6	A*6
A/LA 5 and A/LA 4	A*9
A/LA 3	A*12
A2	A*14
A1	A*15
B5 and B4	B*3
B3 and B2	B*4
C5 and C4	C*1
C3 and C2	C*2