Court of Justice of the European Communities (including Court of First Instance Decisions)

OFFICIALS - REMUNERATION - ALLOWANCE COMPENSATING FOR THE SEPARATION ALLOWANCE PAID PRIOR TO THE STAFF REGULATIONS - PAYMENT OF A CURRENCY OTHER THAN THE BELGIAN FRANC - APPLICATION OF UPDATED EXCHANGE RATES - INAPPLICABILITY OF WEIGHTINGS
( STAFF REGULATIONS OF OFFICIALS , ARTS 63 , 64 AND 106 )

ARTICLE 106 OF THE STAFF REGULATIONS MUST BE UNDERSTOOD AS MEANING THAT IT ENTITLES AN OFFICIAL TO RECEIVE A SEPARATION ALLOWANCE THE AMOUNT OF WHICH , EXPRESSED IN BELGIAN FRANCS , HAS BEEN FROZEN AT THE 1961 LEVEL . THAT AMOUNT MUST BE CALCULATED IN THE NATIONAL CURRENCY OF THE PLACE WHERE AN OFFICIAL IS EMPLOYED AT THE RATE FIXED IN ARTICLE 63 OF THE STAFF REGULATIONS AS IN FORCE WHEN THE ALLOWANCE HAS TO BE PAID . THE WEIGHTING REFERRED TO IN ARTICLE 64 OF THE STAFF REGULATIONS DOES NOT APPLY TO THAT ALLOWANCE .

IN CASE 72/80
MARCO AIROLA , RESIDING AT ANGERA ( VARESE ), ITALY , AN OFFICIAL OF THE COMMISSION OF THE EUROPEAN COMMUNITIES EMPLOYED AT THE JOINT RESEARCH CENTRE AT ISPRA , REPRESENTED BY CESARE RIBOLZI OF THE MILAN BAR , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF VICTOR BIEL , ADVOCATE , 18A RUE DES GLACIS ,
APPLICANT ,
V
COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY ORESTE MONTALTO , A MEMBER OF ITS LEGAL DEPARTMENT , ACTING AS AGENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE JEAN MONNET BUILDING , KIRCHBERG ,
DEFENDANT ,

APPLICATION IN THE TERMS SET OUT IN THE PLEADINGS ,

1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 7 MARCH 1980 PURSUANT TO ARTICLE 91 OF THE STAFF REGULATIONS OF OFFICIALS , THE APPLICANT , MR AIROLA , AN OFFICIAL OF THE COMMISSION EMPLOYED AT THE JOINT RESEARCH CENTRE AT ISPRA IN ITALY , BROUGHT AN ACTION AGAINST THE COMMISSION OF THE EUROPEAN COMMUNITIES IN WHICH HE ASKS THE COURT TO :
( 1 ) ANNUL THE DECISION OF 21 NOVEMBER 1979 WHEREBY THE COMMISSION REJECTED THE COMPLAINT SUBMITTED BY THE APPLICANT IN SO FAR AS THAT DECISION INFRINGES ARTICLE 106 OF THE STAFF REGULATIONS AND BREACHES GENERAL PRINCIPLES GOVERNING THE APPLICATION OF SECONDARY COMMUNITY LAW ( THE PRINCIPLES OF NON-DISCRIMINATION , OF PROTECTION OF ACQUIRED RIGHTS AND OF GOOD FAITH );

( 2)DECLARE UNLAWFUL , ON THE FOREGOING GROUNDS THE REDUCTION OCCURRING AS FROM THE PAYMENT OF THE REMUNERATION FOR APRIL 1979 IN THE BASIC AMOUNT IN BELGIAN FRANCS OF THE ALLOWANCE DUE TO THE APPLICANT UNDER ARTICLE 106 OF THE STAFF REGULATIONS ;

( 3)DECLARE , IN THE EXERCISE OF ITS JURISDICTION TO DECIDE THE SUBSTANCE OF THE MATTER , THAT THE APPLICANT IS ENTITLED TO RETAIN THE SAID AMOUNT UNALTERED AND TO HAVE THE UPDATED EXCHANGE RATE OR , ALTERNATIVELY , THE EXCHANGE RATE RESULTING FROM THE COMBINED PROVISIONS OF REGULATIONS NOS 3085/78 AND 3086/78 APPLIED TO IT WHEN IT IS CONVERTED ;

( 4)DECLARE , FURTHER , THAT , PURSUANT TO THE ADMINISTRATIVE PROVISIONS OF 21 JANUARY 1976 , THE APPLICANT IS ENTITLED TO ARREARS OF PAYMENTS ARISING FROM THE APPLICATION , FROM NO LATER THAN 15 FEBRUARY 1976 , OF THE UPDATED RATE OF EXCHANGE TO THE ALLOWANCE IN QUESTION .

2 IN THE VERSION IN FORCE UNTIL THE END OF 1978 , ARTICLES 63 AND 64 OF THE STAFF REGULATIONS OF OFFICIALS PROVIDED THAT : ' ' AN OFFICIAL ' S REMUNERATION SHALL BE EXPRESSED IN BELGIAN FRANCS . IT SHALL BE PAID IN THE CURRENCY OF THE COUNTRY IN WHICH THE OFFICIAL PERFORMS HIS DUTIES . REMUNERATION PAID IN A CURRENCY OTHER THAN BELGIAN FRANCS SHALL BE CALCULATED ON THE BASIS OF THE PAR VALUES ACCEPTED BY THE INTERNATIONAL MONETARY FUND ON 1 JANUARY 1965 . AN OFFICIAL ' S REMUNERATION EXPRESSED IN BELGIAN FRANCS SHALL . . . BE WEIGHTED AT A RATE ABOVE , BELOW OR EQUAL TO 100% DEPENDING ON LIVING CONDITIONS IN THE VARIOUS PLACES OF EMPLOYMENT . . . THE WEIGHTING APPLICABLE TO THE REMUNERATION OF OFFICIALS EMPLOYED AT THE PROVISIONAL SEATS OF THE COMMUNITIES SHALL BE EQUAL TO 100% AS AT 1 JANUARY 1962 . ' '
3 ON 21 DECEMBER 1978 THE COUNCIL ADOPTED REGULATION ( EURATOM , ECSC , EEC ) NO 3085/78 ( OFFICIAL JOURNAL L 369 , P . 6 ). ARTICLE 1 THEREOF PROVIDES THAT ARTICLE 63 OF THE STAFF REGULATIONS IS TO BE REPLACED BY THE FOLLOWING PROVISION :
' ' OFFICIALS ' REMUNERATION SHALL BE EXPRESSED IN BELGIAN FRANCS . IT SHALL BE PAID IN THE CURRENCY OF THE COUNTRY IN WHICH THE OFFICIAL PERFORMS HIS DUTIES .

REMUNERATION PAID IN A CURRENCY OTHER THAN BELGIAN FRANCS SHALL BE CALCULATED ON THE BASIS OF THE EXCHANGE RATES USED FOR THE IMPLEMENTATION OF THE GENERAL BUDGET OF THE EUROPEAN COMMUNITIES ON 1 JULY 1978 .
THIS DATE SHALL BE CHANGED , AT THE TIME OF THE ANNUAL REVIEW OF REMUNERATION PROVIDED FOR IN ARTICLE 65 , BY THE COUNCIL ACTING BY A QUALIFIED MAJORITY UPON A PROPOSAL FROM THE COMMISSION AS PROVIDED IN THE FIRST INDENT OF THE SECOND SUBPARAGRAPH OF ARTICLES 148 ( 2 ) OF THE EEC TREATY AND OF 118 ( 2 ) OF THE EURATOM TREATY .

WITHOUT PREJUDICE TO THE APPLICATION OF ARTICLES 64 AND 65 , THE WEIGHTINGS FIXED PURSUANT TO THESE ARTICLES SHALL , WHENEVER THE ABOVE DATE IS CHANGED , BE ADJUSTED BY THE COUNCIL , WHICH , ACTING IN ACCORDANCE WITH THE PROCEDURE MENTIONED IN THE THIRD PARAGRAPH , SHALL CORRECT THE EFFECT OF THE VARIATION IN THE BELGIAN FRANC WITH RESPECT TO THE RATES REFERRED TO IN THE SECOND PARAGRAPH . ' '
ARTICLE 4 OF THE REGULATIONS PROVIDES THAT THE REGULATION IS TO ENTER INTO FORCE ON 1 JANUARY 1979 AND THAT IT IS TO APPLY FROM 1 APRIL 1979 .
4 ON 21 DECEMBER 1978 THE COUNCIL ALSO ADOPTED REGULATION ( EURATOM , ECSC , EEC ) NO 3086/78 ADJUSTING THE WEIGHTINGS APPLICABLE TO THE REMUNERATION AND PENSIONS OF OFFICIALS AND OTHER SERVANTS OF THE EUROPEAN COMMUNITIES FOLLOWING THE AMENDMENT OF THE PROVISIONS OF THE STAFF REGULATIONS CONCERNING THE MONETARY PARITIES TO BE USED IN IMPLEMENTING THE STAFF REGULATIONS . ARTICLE 1 ( 1 ) OF THE REGULATION FIXES AMONGST OTHER THINGS THE WEIGHTING APPLICABLE TO THE REMUNERATION OF OFFICIALS AND OTHER SERVANTS .

5 THE RULES IN FORCE BEFORE 1 JANUARY 1962 PRIOR TO THE ADOPTION OF THE STAFF REGULATIONS PROVIDED FOR A SO-CALLED ' ' SEPARATION ' ' ALLOWANCE EQUAL TO 20% OF THE BASIC SALARY TO BE PAID TO OFFICIALS WHO COULD PROVE THAT THEIR PLACE OF EMPLOYMENT WAS MORE THAN 70 KILOMETRES ( 25 KILOMETRES UNDER THE STAFF REGULATIONS OF THE EUROPEAN COAL AND STEEL COMMUNITY OF 1956 ) FROM THEIR PLACE OF ORIGIN . NATIONALITY WAS NOT TAKEN INTO CONSIDERATION .

6 THE STAFF REGULATIONS WHICH ENTERED INTO FORCE ON 1 JANUARY 1962 REPLACED THAT ALLOWANCE BY THE ' ' EXPATRIATION ' ' ALLOWANCE , SO-CALLED BECAUSE AN OFFICIAL HAS TO WORK IN A MEMBER STATE OTHER THAN THAT OF WHICH HE IS A NATIONAL . AS A TRANSITIONAL PROVISION ARTICLE 106 PROVIDED THAT :
' ' ANY OFFICIAL IN RECEIPT OF A SEPARATION ALLOWANCE BEFORE THESE REGULATIONS WERE APPLIED WHO DOES NOT QUALIFY FOR AN EXPATRIATION ALLOWANCE UNDER ARTICLE 4 OF ANNEX VII SHALL BE ALLOWED THE SAME AMOUNT AS THAT WHICH HE WOULD HAVE RECEIVED BY WAY OF SEPARATION ALLOWANCE UNDER THE SCALE OF REMUNERATION EXISTING BEFORE THE STAFF REGULATIONS ENTERED INTO FORCE . SUCH AMOUNT SHALL NOT IN FUTURE BE VARIED FOR ANY REASON WHATEVER , SAVE WHERE THE OFFICIAL QUALIFIES FOR AN EXPATRIATION ALLOWANCE BY SATISFYING THE REQUIREMENTS THEREFOR . ' '
7 ARTICLE 106 WAS APPLIED AFTER MAY 1974 AND WITH RETROACTIVE EFFECT FROM 1 FEBRUARY 1973 TO OFFICIALS WHO HAD BEEN RECRUITED BETWEEN 19 JUNE 1960 AND 31 DECEMBER 1961 BY THE FORMER COMMISSION OF THE EUROPEAN ATOMIC ENERGY COMMUNITY AND HAD NEVER RECEIVED THE SEPARATION ALLOWANCE . BY LETTER OF 14 MARCH 1974 OFFICIALS IN THAT CATEGORY BELONGING TO THE JOINT RESEARCH CENTRE WERE SENT A CIRCULAR IN WHICH THE AMOUNT OF THE SEPARATION ALLOWANCE WAS EXPRESSED IN BELGIAN FRANCS ON THE BASIS OF THE BASIC SALARY , LIKEWISE EXPRESSED IN BELGIAN FRANCS , SHOWN IN THEIR LETTERS OF EMPLOYMENT .

8 THE ALLOWANCE IN QUESTION CONTINUED TO BE PAID TO OFFICIALS ON THE BASIS OF THE EXCHANGE RATE OF 1 BELGIAN FRANC TO 12.50 ITALIAN LIRE . ACCORDING TO THE APPLICANT AN ADMINISTRATIVE DECISION TAKEN IN JANUARY 1976 BUT WHICH WAS NEVER BROUGHT TO THE NOTICE OF THE STAFF , PROVIDED FOR THAT ALLOWANCE , AMONGST OTHERS , TO BE PAID ON THE BASIS OF UPDATED EXCHANGE RATES . HOWEVER , THAT DECISION WAS NEVER APPLIED TO THE SEPARATION ALLOWANCE BECAUSE , ACCORDING TO THE COMMISSION , AFTER A CHECK OF THE VARIOUS BUDGETARY ITEMS IT CONSIDERED THAT THE DECISION SHOULD NOT BE APPLIED TO THAT ALLOWANCE ON THE GROUND THAT ARTICLE 106 OF THE STAFF REGULATIONS PROVIDES THAT IT MAY NOT BE VARIED FOR ANY REASON WHATEVER .

9 AFTER THE ENTRY INTO FORCE OF REGULATIONS NOS 3085 AND 3086/78 THE APPLICANT FOUND THAT IN HIS SALARY STATEMENT FOR APRIL 1979 THE AMOUNT EXPRESSED IN BELGIAN FRANCS WAS CONSIDERABLY REDUCED WHILST THAT PAID IN ITALIAN LIRE REMAINED UNCHANGED .

10 BY LETTER OF 27 JUNE 1979 HE CONSEQUENTLY SUBMITTED TO THE COMMISSION A COMPLAINT UNDER ARTICLE 90 ( 2 ) OF THE STAFF REGULATIONS AGAINST THE ' ' REDUCTION IN REAL TERMS ' ' OF THE ALLOWANCE . HE COMPLAINED NOT ONLY OF THE REDUCTION OF THE AMOUNT IN BELGIAN FRANCS WHICH WAS APPARENT FROM HIS SALARY STATEMENT FOR APRIL 1979 BUT ALSO OF THE NON-APPLICATION OF THE ADMINISTRATIVE DECISION OF 1976 . THE COMMISSION REJECTED THAT COMPLAINT AND THE APPLICANT BROUGHT THIS APPLICATION .

11 THE APPLICANT ' S MAIN CLAIM , RELATING TO THE PERIOD BEGINNING ON 1 APRIL 1979 , SHOULD BE EXAMINED FIRST . HE MAINTAINS THAT THE AMOUNT OF THE SEPARATION ALLOWANCE SHOULD BE PAID AT THE UPDATED EXCHANGE RATE FROM APRIL 1979 . THAT , HE CLAIMS , FOLLOWS FROM ARTICLE 63 OF THE STAFF REGULATIONS AS IT NOW STANDS . THE COMMISSION CONTESTS THAT ARGUMENT . IT MAINTAINS THAT UNDER ARTICLE 106 OF THE STAFF REGULATIONS AN OFFICIAL MAY RECEIVE ONLY THE AMOUNT WHICH HE WOULD HAVE RECEIVED BY WAY OF SEPARATION ALLOWANCE UNDER THE SCALE OF REMUNERATION EXISTING PRIOR TO THE ENTRY INTO FORCE OF THE STAFF REGULATIONS . THAT AMOUNT MAY NOT IN FUTURE BE VARIED FOR ANY REASON WHATEVER . IT FOLLOWS THAT THE AMOUNT OF THE ALLOWANCE IN THE NATIONAL CURRENCY OF THE PLACE WHERE OFFICIALS ARE EMPLOYED WAS FIXED BY APPLYING THE EXCHANGE RATE IN 1961 AND THAT THIS AMOUNT MAY NOT BE CHANGED .

12 THE COMMISSION ' S ARGUMENT CANNOT BE ACCEPTED . IT IS COMMON GROUND THAT OFFICIALS ' REMUNERATION WAS EXPRESSED IN BELGIAN FRANCS BEFORE THE STAFF REGULATIONS WERE ADOPTED AND THEREAFTER THE AMOUNT OF REMUNERATION OF EACH OFFICIAL HAS BEEN FIXED IN BELGIAN FRANCS , EVEN IF THE REMUNERATION IS PAID IN NATIONAL CURRENCY . ARTICLE 106 OF THE STAFF REGULATIONS MUST THEREFORE BE UNDERSTOOD AS MEANING THAT IT ENTITLES AN OFFICIAL TO RECEIVE A SEPARATION ALLOWANCE THE AMOUNT OF WHICH , EXPRESSED IN BELGIAN FRANCS , HAS BEEN FROZEN AT THE 1961 LEVEL . THAT AMOUNT MUST BE CALCULATED IN THE NATIONAL CURRENCY OF THE PLACE WHERE AN OFFICIAL IS EMPLOYED AT THE RATE FIXED IN ARTICLE 63 OF THE STAFF REGULATIONS AS IN FORCE WHEN THE ALLOWANCE HAS TO BE PAID .

13 IT FOLLOWS THAT THE APPLICANT IS ENTITLED TO THE DIFFERENCE BETWEEN THE AMOUNT PAID TO HIM BY THE COMMISSION AFTER 1 APRIL 1979 BY WAY OF SEPARATION ALLOWANCE AND THE AMOUNT WHICH WOULD BE OBTAINED FROM THE APPLICATION OF THE UPDATED EXCHANGE RATE AND TO THAT EXTENT THE COMMISSION ' S DECISION MUST BE ANNULLED .

14 THE SEPARATION ALLOWANCE , TO WHICH THE WEIGHTING REFERRED TO IN ARTICLE 64 OF THE STAFF REGULATIONS HAS NEVER BEEN APPLIED , MUST NOT BE WEIGHTED EITHER AFTER THE ADOPTION OF THE UPDATED RATES .

15 AS TO THE APPLICANT ' S CLAIM FOR A RULING THAT UPDATED EXCHANGE RATES MUST BE APPLIED TO THE ALLOWANCE DURING THE PERIOD FROM 1 JANUARY 1976 TO 31 MARCH 1979 , A STUDY OF THE FILE ON THE CASE LEADS TO A DIFFERENT CONCLUSION .

16 ON 6 NOVEMBER 1974 THE COMMISSION TOOK THE DECISION TO APPLY AS FROM 1 NOVEMBER 1974 UPDATED EXCHANGE RATES TO THE REFUND OF CERTAIN EXPENSES INCURRED BY OFFICIALS OF THE COMMISSION . THAT DECISION DID NOT CONCERN THE SEPARATION ALLOWANCE . BY AN INTERNAL INSTRUCTION FROM THE DIRECTOR OF PERSONNEL , WHICH WAS APPROVED ON 21 JANUARY 1976 BY THE DIRECTOR-GENERAL FOR PERSONNEL AND ADMINISTRATION , THE COMMISSION ' S DECISION WAS EXTENDED AS FROM 1 JANUARY 1976 ' ' TO ALL EMOLUMENTS PAID BY THE COMMISSION OR TAKEN INTO ACCOUNT IN ORDER TO PAY AN AMOUNT ON THE BASIS OF THE STAFF REGULATIONS OF OFFICIALS OR THE CONDITIONS OF EMPLOYMENT OF OTHER SERVANTS OF THE COMMUNITIES , WHERE THOSE AMOUNTS ARE NOT WEIGHTED UNDER ARTICLE 64 OF THE STAFF REGULATIONS ' ' EXCEPT FOR SOME SPECIFIC AMOUNTS EXPRESSLY REFERRED TO IN THE SECOND PARAGRAPH OF THE INSTRUCTION .

17 FOLLOWING THAT INSTRUCTION THE OFFICERS OF THE COMMISSION DREW UP A LIST OF THE BUDGETARY ITEMS TO WHICH IT HAD TO BE APPLIED . AMONGST THOSE ITEMS THERE WAS MENTION OF ALLOWANCES IN ACCORDANCE WITH ART . 106 , ART . 95 , 96 ECSC STAFF REGULATIONS . SHORTLY AFTERWARDS , AT ANY RATE BEFORE PAYMENTS WERE ACTUALLY MADE PURSUANT TO THE INSTRUCTION , A CHECK WAS CARRIED OUT ON THE VARIOUS ITEMS COMPRISED IN THAT LIST . IT WAS ASCERTAINED THAT THE SEPARATION ALLOWANCE WAS GOVERNED BY ARTICLE 63 OF THE STAFF REGULATIONS WITH THE RESULT THAT THE INSTRUCTION WAS NEVER APPLIED WITH RESPECT TO THAT ALLOWANCE .

18 IT IS COMMON GROUND THAT WHATEVER ITS LEGAL VALUE MAY BE THE INSTRUCTION WAS NEVER BROUGHT TO THE NOTICE OF STAFF , WHICH THE APPLICANT HIMSELF ACCEPTS . IT WAS NOT UNTIL HE MADE HIS COMPLAINT ON 27 JUNE 1979 THAT HE FIRST ASKED FOR UPDATED EXCHANGE RATES TO BE APPLIED IN RESPECT OF THE PERIOD PRIOR TO 1 APRIL 1979 .
19 IT FOLLOWS FROM THE CONSIDERATIONS SET FORTH ABOVE THAT THE ALLOWANCE IN QUESTION MUST BE REGARDED AS AN AMOUNT EXPRESSED IN BELGIAN FRANCS , BUT WHICH , PURSUANT TO ARTICLE 63 OF THE STAFF REGULATIONS , MUST BE PAID IN THE NATIONAL CURRENCY OF THE PLACE AT WHICH AN OFFICIAL IS EMPLOYED AT THE RATE APPLYING ON THE DATE ON WHICH THE ALLOWANCE HAS TO BE PAID . THE COMMISSION THEREFORE RIGHTLY DECIDED TO APPLY UNTIL 1 APRIL 1979 THE EXCHANGE RATE REFERRED TO IN ARTICLE 63 OF THE OLD VERSION OF THE STAFF REGULATIONS . IT FOLLOWS THAT IN SO FAR AS THE APPLICANT ' S CLAIM RELATES TO THE PERIOD PRIOR TO 1 APRIL 1979 IT MUST BE DISMISSED .

20 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS .

ON THOSE GROUNDS ,
THE COURT ( FIRST CHAMBER )
HEREBY :
1 . ANNULS THE COMMISSION ' S DECISION OF 21 NOVEMBER 1979 REJECTING THE APPLICANT ' S COMPLAINT CONCERNING THE EXCHANGE RATE TO BE APPLIED FOR THE PAYMENT OF THE SEPARATION ALLOWANCE FROM 1 APRIL 1979 .
2.ORDERS THE COMMISSION TO PAY TO THE APPLICANT THE DIFFERENCE BETWEEN THE AMOUNTS PAID FROM 1 APRIL 1979 BY WAY OF SEPARATION ALLOWANCE AND THOSE WHICH WOULD HAVE BEEN OBTAINED FROM THE APPLICATION OF THE UPDATED EXCHANGE RATE .

3.DISMISSES THE REMAINDER OF THE APPLICATION .

4.ORDERS THE COMMISSION TO PAY THE COSTS .