JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber)

15 July 2004

Joined Cases T-180/02 and T-113/03

Georgios Gouvras

v

Commission of the European Communities

(Officials – Posting – Secondment in the interest of the service – Change with retrospective effect of the place of employment and of the financial entitlements relating to it – Recovery of undue payment – Installation allowance and daily subsistence allowance – Transfer of part of emoluments from the place of employment)

Full text in French II - 0000

Application:         in Case T-180/02, for annulment of the Commission’s decision to fix, with retrospective effect from 1 November 2000 during the period of his secondment in the interest of the service, the applicant’s place of employment as Athens, to withdraw his right to the expatriation allowance and his right to reimbursement of annual travel expenses and to apply the weighting for Greece to his remuneration, as well as the decision to recover the undue payment, and, in Case T-113/03, for annulment of the Commission’s decision refusing the applicant the installation allowance and the daily subsistence allowance for the period of his secondment to Athens in the interest of the service and the payment of the installation allowance on his resettlement in Luxembourg, as well as the decision limiting to 35% the part of his remuneration to be transferred to his place of employment in Luxembourg during the period of his secondment.

Held:         The Commission’s decision of 30 April 2002 is annulled in so far as it refused the applicant the installation allowance on his secondment to Athens. The other claims for annulment in Cases T‑180/02 and T-113/03 are dismissed. The Commission is ordered to bear its own costs and to pay a third of the applicant’s costs in the two cases. The applicant is ordered to bear two thirds of his costs in those cases.

Summary

1.     Officials – Secondment in the interests of the service – Right of the official concerned to be heard – Observance of the rights of the defence – Scope

(Staff Regulations, Art. 38(a))

2.     Officials – Secondment in the interests of the service – Place of employment – Determination

(Staff Regulations, Art. 38(d), (f) and (g))

3.     Officials – Recovery of undue payment – Conditions – Irregularity of the payment patently evident – Official seconded to his country of origin in the interests of the service – Payment of the expatriation allowance and application of the weighting for his previous place of employment

(Staff Regulations, Arts 38(d) and 85)

4.     Officials – Administration’s duty to have regard for the welfare of its servants – Scope – Limits

5.     Officials – Principles – Protection of legitimate expectations – Official seconded to his country of origin in the interests of the service – Payment of remuneration, including the expatriation allowance, in previous place of employment – Situation not giving rise to legitimate expectations as regards the establishment of the place of employment

6.     Officials – Reimbursement of expenses – Installation allowance – Change in place of employment – Official seconded in the interests of the service obliged to change residence but not accompanied by his family – Entitlement to the allowance – Return to his family in the previous place of employment – Allowance not due

(Staff Regulations, Art. 20; Annex VII, Art. 5)

7.     Officials – Reimbursement of expenses – Daily subsistence allowance – Purpose – Conditions for granting

(Staff Regulations, Art. 20; Annex VII, Art.10)

8.     Officials – Secondment in the interests of the service – Additional expenses entailed by the secondment – Concept

(Staff Regulations, Art. 38(d))

9.     Officials – Remuneration – Regular transfers outside the country of employment – Fixing of ceilings by the institutions – Whether fixing a ceiling of 35% of net remuneration lawful

(Staff Regulations, Annex VII, Art. 17)

10.   Officials – Remuneration – Regular transfers outside the country of employment – Article 17(2)(c) of Annex VII to the Staff Regulations – Transfer by way of exception – Justification – Total cover of regular expenses – None – Discretion of the administration

(Staff Regulations, Annex VII, Art. 17(2)(c))

1.     In a case of secondment in the interests of the service which, unlike secondment on request, is decided by the appointing authority and may be decided against the wishes of the official concerned, the administration must inform the official and hear his views before taking its decision, in accordance with the principle of respect for the rights of the defence. In that regard, the administration fulfils its obligations where, in the case of an official of whom it is entitled to expect a high level of understanding of administrative procedures under the Staff Regulations, it informs the person concerned, who is always entitled to request further particulars, of the principal features of the proposed secondment.

(see paras 74, 76)

See: T-15/95 do Paço Quesado v Commission [1996] ECR-SC I-A-57 and II-171, para. 30; T-348/00 Barth v Commission [2001] ECR-SC I-A-119 and II-557, para. 33

2.     The place of employment of an official seconded in the interests of the service is in the place of secondment, with all the consequences which follow as regards the expatriation allowance and the application of weightings. In that regard, the provisions of Article 38 of the Staff Regulations concerning the retention of post and total remuneration of the official in his institution of origin are neutral as regards the determination of the place of employment of the seconded official, as they are intended only to preserve his entitlements. The post is thus a functional rather than a geographical concept.

(see paras 81-82)

3.     Under Article 85 of the Staff Regulations, recovery of sums overpaid presupposes an irregularity in payment of which the recipient was aware or which was patently such that he could not have been unaware of it.

As regards the existence of the irregularity, the error in payment may result from either a failure to act or administrative tolerance and may relate to a lengthy period. In that connection, in the case of an official who is seconded in the interests of the service to the country of which he is a national, the retention for several months of the financial entitlements attaching to the wrong place of employment, that is to say the payment of the expatriation allowance and the application to his remuneration of the weighting for his original place of employment, constitute such an error of payment. The principle of the retention of total remuneration laid down by Article 38 of the Staff Regulations provides for compensation where the seconded official receives from his host institution a total remuneration which is less than that carried by his grade and step in his parent institution, and cannot require the administration to pay allowances and benefits to which the seconded official is not entitled.

Such an error in payment does not mean that the person concerned need make no effort to reflect or check and will not escape the notice of an official exercising ordinary care, who is deemed to know the rules governing his salary. Even if the administration does not make things clear and takes several months to state its view on the entitlements of the person concerned, an official exercising ordinary care, with a high grade and level of experience, cannot be unaware that the payment of the expatriation allowance attaches to expatriation within the meaning of Article 4 of Annex VII to the Staff Regulations.

(see paras 102, 104, 106-107, 110-111)

See: 56/75 Elz v Commission [1976] ECR 1097, paras 19 and 20; T-107/92 White v Commission [1994] ECR-SC I-A-41 and II-143, para. 33

4.     The administration’s duty to have regard for the welfare of its servants requires that it should take into consideration all the factors which may affect 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. However, that duty cannot lead the administration to disregard the requirement that the protection of the rights and interests of officials must always be subject to compliance with the rules in force.

(see para. 123)

See: C-255/90 P Burban v Parliament [1992] ECR I-2253, para. 7; T-123/89 Chomel v Commission [1990] ECR II-131, para. 32; T-33/89 and T-74/89 Blackman v Parliament [1993] ECR II-249, para. 96

5.     No official may plead breach of the principle of the protection of legitimate expectations unless the administration has given him precise assurances.

In that regard, in the case of an official seconded in the interests of the service to the Member State of which he is a national, the temporary continuation of the payment of his remuneration including the expatriation allowance in his previous country of employment does not imply any decision on the part of the administration as regards the establishment of his place of employment in that country which would constitute an entitlement to the advantage of the person concerned.

(see paras 127, 130, 132)

See: Chomel v Commission, cited above, para. 26; T-498/93 Dornonville de la Cour v Commission [1994] ECR-SC I-A-257 and II-813, para. 46

6.     Under Article 5(1) of Annex VII to the Staff Regulations, an installation allowance is to be paid to an official who furnishes evidence of having been obliged to change his place of residence in order to comply with Article 20 of the Staff Regulations. Accordingly, an official seconded in the interests of the service who is obliged to settle in a different place from his previous place of employment, while his family continue to reside in that place, is entitled to receive that allowance in respect of his installation in his place of secondment. On the other hand, he is not entitled to that allowance on his return, at the end of his secondment, to his original place of employment where his family still lives.

(see paras 156-157, 161)

7.     The daily subsistence allowance provided for in Article 10 of Annex VII to the Staff Regulations is intended to cover the expense and inconvenience occasioned to the official by the need to travel and establish a provisional residence at the place of his employment, whilst retaining, likewise provisionally, his residence in his place of recruitment or previous employment. It is not payable to an official who does not prove that he has incurred the expenses connected with the establishment of a provisional residence.

(see paras 163, 165)

See: 280/85 Mouzourakis v Parliament [1987] ECR 589, para. 9; T-63/91 Benzler v Commission [1992] ECR II-2095, para. 20; T-57/96 Costantini v Commission [1997] ECR-SC I-A-495 and II-1293, para. 40

8.     The reimbursement, provided for by Article 38(d) of the Staff Regulations, of the additional expenses borne by an official seconded in the interests of the service to occupy temporarily a post outside his institution is not intended to offset the implementation of other provisions of the Staff Regulations. The cancellation of the expatriation allowance and the application of the weighting of the country of employment cannot, therefore, constitute an expense within the meaning of that provision. Only costs incurred can be described as additional expenses entailed by his secondment.

(see para. 195)

See: 56/81 Novi v Commission [1982] ECR 1, para. 7

9.     Article 17 of Annex VII to the Staff Regulations, which enables an official to transfer part of his emoluments, authorises the Community institutions to lay down the conditions for such transfers by allowing them a certain discretion. Accordingly, the fixing of ceilings not laid down by the Staff Regulations is not unlawful in itself for the simple reason that it is provided for by a subordinate rule of law.

In that regard, the establishment of a limit of 35% of net remuneration for regular transfers does not exceed the limits of that discretion. That limit does not appear manifestly disproportionate since it is a derogation from the rule that the sums due to an official are paid in the place and currency of the country where the official carries out his duties and where he is presumed to incur expenditure.

(see paras 201-203)

See: Elz v Commission, cited above, paras 11 to 15; T-75/91 Scaramuzza v Commission [1992] ECR II-2557, para. 44; T-6/92 and T-52/92 Reinarz v Commission [1993] ECR II-1047, paras 71 to 74

10.   Article 17(2)(c) of Annex VII to the Staff Regulations does not concern regular transfers limited to 35% of net remuneration but transfers made in very exceptional circumstances and for good reasons, supported by evidence. Consequently, that provision may not be relied on to allow the full cover of regular expenses which an official incurs in a country other than his place of employment. It is clearly of a restricted nature and, given that it is an exception, it necessarily bestows a wide discretion on the administrative authority for the purposes of its implementation.

(see paras 206-209)