Staff case summary

Staff case summary

Summary

1. Officials – Actions – Plea of illegality – Interest in bringing proceedings

(Art. 241 EC; Staff Regulations, Annex XII)

2. Officials – Staff Regulations – Regulation amending the Staff Regulations – Procedure for adoption

3. Officials – Pensions – Financing of the pension scheme – Rules for maintaining the actuarial balance of the Community pension scheme

(Staff Regulations, Annex XII)

4. Officials – Pensions – Financing of the pension scheme – Rules for maintaining the actuarial balance of the Community pension scheme

(Staff Regulations, Annex XII)

5. Officials – Pensions – Financing of the pension scheme – Rules for maintaining the actuarial balance of the Community pension scheme

(Staff Regulations, Annex XII)

6. Officials – Principles – Protection of legitimate expectations – Conditions

1. Pursuant to Article 241 EC, an applicant may, by way of exception, plead the illegality of Community measures of general application which do not concern him individually, in particular the Staff Regulations, in his capacity as an official. The requirement of a direct and individual link between the applicant and the measure of general application which he is contesting cannot be invoked against him in an action brought indirectly on the basis of Article 241 EC. The admissibility of an indirect challenge to a Community measure of general application is subject only to the double condition that the individual measure being challenged was adopted in direct implementation of the measure of general application and that the applicant must have an interest in challenging the individual decision which is the subject of the main action. Since the increase in the rate of contribution appearing in the applicant’s salary slip was decided on by direct application of Annex XII to the Staff Regulations, which lays down rules for maintaining the actuarial balance of the pension scheme, and since the applicant has an interest in applying for annulment of that increase, the plea of illegality against that Annex is admissible.

The fact that the applicant’s claims rely on institutional, political or trade union considerations and that they do not concern only his personal situation is not such as to establish that his claims are inadmissible .

(see paras 35-38, 40-41)

See:

85/82 Schloh v Council [1983] ECR 2105, para. 14; C-432/98 P and C-433/98 P Council v Chvatal and Others [2000] ECR I‑8535, para. 33; C-50/00 P Unión de Pequeños Agricultores v Council [2002] ECR I‑6677, para. 40

T‑35/05, T‑61/05, T‑107/05, T‑108/05 and T‑139/05 Agne-Dapper and Others v Parliament, Council, Commission, Court of Auditors and EESC [2006] ECR-SC I-A-2-291 and II-A-2-1497, paras 42 and 43

2. The consultation procedure may be applied only to Commission proposals to the Council relating to the amendment of the Staff Regulations or the Conditions of Employment of Other Servants of the European Communities or relating to the application of those regulations or conditions concerning remuneration or pensions. However, that does not mean that the Consultation Committee may not extend the consultation to matters other than those contained in the Commission’s proposal and take account of all relevant factors put forward by the trade union and professional organisations, the Member States or the institutions in order to carry out its mission of tripartite consultation. Consequently, the Consultation Committee may also consider amendments which the Council intends to ask the Commission to add to its initial proposal.

Furthermore, the consultation procedure is applied to Commission proposals only if a member of the Consultation Committee so requests. That rule is intended to avoid the consultation procedure being employed when the very persons who are in charge of carrying it out do not see any useful purpose in so doing. In particular, it permits the Consultation Committee to dispense with consideration of the Commission’s amending proposals when the initial proposal has already been the subject of a consultation which is considered sufficient.

Finally, a procedural irregularity justifies the annulment of a legislative act only if it is shown that, in the absence of such irregularity, the act might have been different. Thus, where it is not established that if the consultation procedure had been applied to the Commission’s amending proposal, the legislative act would have been substantively different, such an irregularity would not, in any event, be such as to justify the annulment of that act.

(see paras 51-56)

See:

T-24/01 Staelen v Parliament [2003] ECR-SC I‑A‑79 and II‑423, para. 53

3. Because the actuarial balance of the Community pension scheme, the detailed rules for which are laid down in Annex XII to the Staff Regulations, requires the taking into account, in the long term, of economic developments and financial variables, and requires complex statistical calculations, the Community legislature enjoys a wide discretion in adopting the detailed rules to ensure the actuarial balance of the pension scheme. Thus the Community judicature may examine only whether the provisions of Annex XII to the Staff Regulations contain a manifest error of assessment.

Moreover, by virtue of the principle of proportionality, the legality of Community rules is also subject to the condition that the means employed must be appropriate to attainment of the legitimate objective pursued and must not go further than is necessary to attain it, and, where there is a choice of appropriate measures, it is necessary, in principle, to choose the least onerous. However, in an area in which the Community legislature has a broad discretion consonant with the political responsibilities given to it by the Treaty, the review of proportionality must be confined solely to examining whether the measure at issue is manifestly inappropriate having regard to the objective which the competent institution is required to pursue.

A judicial review, even if of limited scope, requires the Community institutions to show before the Community courts that when adopting the act they properly exercised their discretion, which presupposes the taking into consideration of all relevant factors and circumstances of the situation the act was intended to regulate. It follows that the Community legislature must at the very least be able to produce and set out clearly and unequivocally the basic facts which had to be taken into account as the basis of the contested measures and on which the exercise of its discretion depended.

The fact that the applicant provided information in support of his pleas alleging a manifest error of assessment and a breach of the principle of proportionality which was sufficiently precise, objective and consistent justifies the Community courts intervening directly in the search for evidence in order to ascertain whether the Community institution had not made a manifestly erroneous or inappropriate use of its wide discretion.

(see paras 70-73, 75-77)

See:

C-274/99 P Connolly v Commission [2001] ECR I‑1611, para. 113; C-120/99 Italy v Council [2001] ECR I‑7997, paras 44 and 45; C‑310/04 Spain v Council [2006] ECR I‑7285, paras 122 and 123

T-162/94 NMB France and Others v Commission [1996] ECR II‑427, para. 69 and the case-law cited therein, and para. 70; T‑135/05 Campoli v Commission [2006] ECR-SC I-A-2-297 and II-A-2-1527, para. 143

4. As can be seen from the provisions of Article 83a(1) of the Staff Regulations, read together with Article 4(1) of Annex XII thereto, the objective of the method for calculation set out in that Annex is to ensure the actuarial balance of the Community pension scheme. Pursuant to Article 83(2) of the Staff Regulations and Article 1(1) and Article 5 of Annex XII thereto, the contribution rate for officials has to be fixed at a level sufficient to finance one third of the cost of the scheme calculated on an actuarial basis.

Annex XII to the Staff Regulations uses the method known as ‘projected unit credit’, according to which the sum of the actuarial values of the pension rights acquired by all those in active service in a given year, known as ‘service cost’, is expressed as a ratio of their total annual basic salaries. The contribution of officials is equal to one third of that ratio, having regard to the allocation of financing of the Community pension scheme set out in Article 83(2) of the Staff Regulations. Calculation of the service cost requires actuarial hypotheses, that is to say, estimates of the future value of several parameters (interest rates, mortality, salary growth etc.). As regards interest rates, Article 10(2) of Annex XII to the Staff Regulations defines the interest rate to be taken into consideration for the actuarial calculations as the average of the real average interest rates for the 12 years preceding the current year.

The choice of a reference period of 12 years instead of 20 years does not affect the validity of the actuarial method. On the one hand, the prospective value of an average real interest rate calculated on the basis of a period in the past is, in any event, approximate, regardless of the length of that period. Also, the length of the reference period is unlikely to affect actuarial balance as long as the parameter is not modified over a long period. It is only if, in the future, the length of that period was extended or reduced, in the light of changes in interest rates, in order to maintain the average real interest rate used in the actuarial calculation at a low level, and consequently, to maintain officials’ contributions at a high level, that the objectivity of the method of calculation could be called into question and that the purpose of ensuring actuarial balance on a transparent and uncontroversial basis would be affected . Consequently, the period of 12 years fixed in Article 10(2) and Article 4(6) of Annex XII to the Staff Regulations is neither manifestly erroneous nor manifestly inappropriate.

(see paras 84, 86, 88, 97-98)

5. In the exercise of the legislature’s wide discretion in ensuring the actuarial balance of the Community pension scheme, the taking account of budgetary considerations is not unlawful. Such taking into account is even necessary because, in the absence of a Community pension fund, the payment of retirement benefits is charged to the Community budget in accordance with Article 83(1) of the Staff Regulations in the same way as officials’ contributions constitute income.

(see para. 126)

6. Officials cannot rely on the principle of the protection of legitimate expectations to challenge the lawfulness of a new regulatory provision, particularly in a field involving constant adjustment to the variations in the economic situation.

However, although the legislature is at any time free to make such amendments to the rules in the Staff Regulations as it considers to be in accordance with the general interest and to adopt staff regulations less favourable to the officials concerned, subject to providing a sufficiently long transitional period where necessary, that freedom is subject to the condition of its acting only in regard to the future, that is to say, the new rules must apply only to new situations and to the future effects of situations which arose under the earlier rules.

It is for that reason that an applicant cannot be denied the right to invoke a breach of the principle of the protection of legitimate expectations against an amendment to the Staff Regulations designed to alter, in regard to the past, the allocation of the financing of contributions to the Community pension scheme between the institutions and officials.

(see paras 149-150, 153)

See:

84/78 Tomadini [1979] ECR 1801, para. 21; 112/80 Dürbeck [1981] ECR 1095, para. 48; C-368/89 Crispoltoni [1991] ECR I‑3695, para. 21

T‑6/92 and T‑52/92 Reinarz v Commission [1993] ECR II‑1047, para. 85; T‑98/92 and T‑99/92 Di Marzio and Lebedef v Commission [1994] ECR-SC I‑A‑167 and II‑541, para. 68; T-177/95 Barraux and Others v Commission [1996] ECR-SC I‑A‑541 and II‑1451, para. 47; Campoli v Commission , para. 85