Case T‑605/18

ZF

v

European Commission

Judgment of the General Court (Ninth Chamber), 12 February 2020

(Civil Service – Members of the temporary staff – Pension – Decision determining pension rights – Pension statements – Action for annulment – Time-limit for lodging a complaint – Delay – Purely confirmatory act – Partial inadmissibility – Recovery of undue payments – Classification in grade and step – Multiplication factor – Withdrawal of an unlawful act – Legitimate expectation – Reasonable time)

1. Action brought by officials – Prior administrative complaint – Time limits – Mandatory – Claim barred by lapse of time – Reopening – Condition – New and material fact – Concept – Act confirming an earlier decision – Not included

   (Staff Regulations, Arts 90 and 91)

   (see paragraphs 59, 60, 69-77)

2. Action brought by officials – Time limits – Point from which time starts to run – Salary or pension statements reflecting a decision the subject matter of which is purely financial – Notification setting in motion the running of time for the purposes of time limits

   (Staff Regulations, Arts 90(2) and 91(1))

   (see paragraphs 61, 63)

3. Officials – Recovery of undue payments – Conditions – Patent overpayment – Criteria – Administration’s negligence or error – Irrelevant

   (Staff Regulations, Art. 85; Conditions of Employment of Other Servants, Art. 45)

   (see paragraphs 114-118, 128-131, 136)

4. Acts of the institutions – Withdrawal – Legal act conferring individual rights – Unlawfulness

   (see paragraph 138)

5. Acts of the institutions – Withdrawal – Unlawful acts – Commission decision giving rise to recovery of undue payments – Conditions – Compliance with duty to act within a reasonable time and with the principle of the protection of legitimate expectations – Act the subject matter of which is purely financial – Applicability of the time limit relating to requests for recovery of undue payments

   (Staff Regulations, Art. 85, second subparagraph))

   (see paragraphs 148-155, 159-168, 171)

6. Officials – Decision adversely affecting an official – Obligation to state reasons – Scope

   (Art. 296 TFEU; Staff Regulations, Art. 25, second subparagraph)

   (see paragraphs 178, 179)

Résumé

In the judgment in ZF v Commission (T‑605/18), delivered on 12 February 2020, the General Court dismissed the application of a former member of the temporary staff seeking the annulment of the decisions of the Commission amending, first, his pension rights with retroactive effect and providing, second, for the recovery of an overpayment resulting from the application of an incorrect multiplication factor for the calculation of his basic salary and therefore of his pension. In this regard, the Court was called upon to rule on the link between the provisions of Article 85 of the Staff Regulations of Officials of the European Union (‘the Staff Regulations’) relating to the recovery of undue payments and the case-law on the conditions for the withdrawal of unlawful acts creating rights.

The applicant entered into service in 1999 and retired in 2015. In accordance with the transitional provisions set out in Annex XIII to the Staff Regulations, a multiplication factor was applied for the calculation of his basic monthly salary. The applicant’s salary, to which a multiplication factor of 0.9426565 had thus far been applied, then had a new multiplication factor of 1 applied to it, from February 2013 until his retirement, and a retroactive adjustment of his remuneration for the period from October 2011 to January 2013. In finding that the calculation of the applicant's pension rights was based on an erroneous basic salary, resulting from an error relating to the multiplication factor, the application of which was effected in February 2013, the Commission decided to modify those rights, with retroactive effect, and recover the resulting undue payments. In his action, the applicant alleged, inter alia, a breach of Article 85 of the Staff Regulations as well as a breach of the principles relating to the withdrawal of unlawful acts.

The Court recalled, first of all, that the withdrawal of an unlawful act which has benefited its recipient is subject to two legal conditions, the first one being that it respects the legitimate expectations of the person concerned, and the second that it takes place within a reasonable period.

As regards, first, respect for the legitimate expectations of the person concerned, the Court noted that the case-law relating to the application of the principle of legitimate expectations in relation to the withdrawal, with retroactive effect, of unlawful acts conferring individual rights echoes the case-law applicable to the recovery of undue payments. According to this case-law, the expectations cannot be regarded as legitimate where an official exercising due care could not fail to be aware of the unlawful nature of the act. The Court reiterated that Article 85 of the Staff Regulations, according to which, for a sum paid without justification to be recovered, the irregularity of the payment has to be patently such that the beneficiary could not fail to be aware of it, is itself a manifestation of the principle of the protection of legitimate expectations. It therefore concluded that if an irregularity is such that it falls within the scope of Article 85 of the Staff Regulations, it cannot be such as to give rise to a legitimate expectation on the part of the person whom it benefits, which precludes the fulfilment of the condition of withdrawal on the basis of legitimate expectations in the present case.

As regards, second, compliance with a reasonable time limit, the Court held that where the withdrawal of an unlawful act gives rise to the recovery of sums unduly paid, it is necessary to determine whether the subject matter of the act withdrawn is purely financial. Where the subject matter of the act in question is purely financial, its withdrawal, which has the same effect as recovery of sums unduly paid on the basis of that act, is the result merely of the application of the provisions of Article 85 of the Staff Regulations. In such a case, in order to ensure that the provisions of the first sentence of the second subparagraph of Article 85 of the Staff Regulations are of practical effect, the act in question must be withdrawn within the five-year time limit laid down in those provisions.

Consequently, the Court relied on the concept of ‘decision the subject matter of which is purely financial’ which has already been used by the Courts of the European Union in order to delimit the scope of the case-law which allows the time limits for lodging complaints and bringing actions to run from the notification of the salary or pension statement of the official or other servant concerned. It specified, in this regard, that it is necessary to distinguish decisions whose subject matter is purely financial from those which, while having financial effects, have a subject matter which goes beyond the fixing of the purely financial rights of the person concerned.

In the present case, the administration had withdrawn an act, in so far as this act applied a certain multiplication factor, for the calculation of the applicant’s pension. It is therefore an act the subject matter of which is purely financial and which was withdrawn. As this withdrawal was effected within a period of approximately two years and nine months, which is shorter than the five‑year time limit applicable in the present case, the Court concluded that the act in question was withdrawn within a reasonable period.

The Court also rejected the other pleas, alleging an error of law, a breach of the principles applicable to the withdrawal of lawful acts, an insufficient statement of reasons and a manifest error of assessment, and concluded that the applicant’s action should be dismissed.