Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
OFFICIALS - REMUNERATION - ANNUAL ADJUSTMENT - SALARY ARREARS - ENTITLEMENT TO DEFAULT INTEREST - NONE UNLESS THE SUM OWED IS CERTAIN OR ASCERTAINABLE
( STAFF REGULATIONS OF OFFICIALS , ART . 65 )
Summary
AN OBLIGATION TO PAY DEFAULT INTEREST CAN ARISE ONLY ON CONDITION THAT THE AMOUNT OF THE PRINCIPAL SUM OWED IS CERTAIN OR CAN AT LEAST BE ASCERTAINED ON THE BASIS OF ESTABLISHED OBJECTIVE FACTORS . SINCE THE POWERS CONFERRED ON THE COUNCIL BY ARTICLE 65 OF THE STAFF REGULATIONS FOR ADJUSTING THE REMUNERATION AND PENSIONS OF OFFICIALS AND OTHER SERVANTS AND FOR FIXING THE WEIGHTINGS APPLICABLE TO SUCH REMUNERATION AND PENSIONS INVOLVE THE EXERCISE OF A DISCRETION , NO CERTAINTY EXISTS AS TO THE AMOUNT BY WHICH THE REMUNERATION AND PENSIONS WILL BE ADJUSTED OR THE MANNER IN WHICH THE WEIGHTINGS WILL BE FIXED UNTIL THE COUNCIL HAS EXERCISED THOSE POWERS AND ADOPTED THE REGULATION ON THE MATTER . CONSEQUENTLY , AS THAT CONDITION IS NOT FULFILLED , THERE IS NO OBLIGATION TO PAY DEFAULT INTEREST ON SALARY ARREARS PROVIDED THAT THERE IS NO UNJUSTIFIED DELAY IN THE PAYMENT OF SUCH ARREARS AFTER THE ADOPTION OF THE SAID REGULATION .
WHETHER AN OBLIGATION TO PAY DEFAULT INTEREST SHOULD BE RECOGNIZED WHERE THERE IS AN UNJUSTIFIED DELAY IN ACTUALLY DETERMINING THE AMOUNT OF THE REMUNERATION OWED IS ANOTHER MATTER .
Parties
IN CASE 176/83
ALAIN PIERRE ALLO AND OTHERS , OFFICIALS OF THE COMMISSION OF THE EUROPEAN COMMUNITIES , ASSISTED AND REPRESENTED BY JEAN-NOEL LOUIS OF THE BRUSSELS BAR , 51 RUE LANGEVELD , PO BOX 16 , 1180 BRUSSELS , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF NICOLAS DECKER , ADVOCATE AT THE COUR D ' APPEL , LUXEMBOURG , 16 AVENUE MARIE-THERESE , PO BOX 335 ,
APPLICANTS ,
V
COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY DIMITRIOS GOULOUSSIS , A MEMBER OF ITS LEGAL DEPARTMENT , ACTING AS AGENT , ASSISTED BY CLAUDE VERBRAEKEN , OF THE BRUSSELS BAR , 341 AVENUE LOUISE , 1050 BRUSSELS , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF M . BESCHEL , ALSO A MEMBER OF THE COMMISSION ' S LEGAL DEPARTMENT , JEAN MONNET BUILDING , KIRCHBERG ,
DEFENDANT ,
Subject of the case
APPLICATION REQUESTING THE COURT TO :
DECLARE ILLEGAL AND ANNUL :
( I ) THE SALARY SLIPS ISSUED BY THE DEFENDANT FOR DECEMBER 1982 , IN SO FAR AS THEY CONTAIN STATEMENTS OF SALARY ARREARS PAID PURSUANT TO COUNCIL REGULATION NO . 3139/82 OF 22 NOVEMBER 1982 AND NOT INCREASED BY INTEREST IN ORDER TO COMPENSATE FOR THE FINANCIAL LOSS SUFFERED BY THE APPLICANTS , AND ,
( II)IN SO FAR AS IS NECESSARY , THE EXPRESS OR IMPLIED REJECTION OF THE COMPLAINTS LODGED BY THE APPLICANTS UNDER ARTICLE 90 ( 2 ) OF THE STAFF REGULATIONS ;
ORDER THE DEFENDANT TO COMPENSATE THE APPLICANTS FOR THE FINANCIAL LOSS WHICH THEY HAVE INCURRED BY THE PAYMENT OF A SUM WHICH THE COURT SHOULD FIX AT AN AMOUNT EQUAL TO THE TOTAL INTEREST CALCULATED BY APPLYING THE NORMAL RATE TO THE AMOUNT OF ARREARS PAYABLE IN RESPECT OF EACH DUE DATE UNTIL THE ACTUAL DATE OF PAYMENT ;
ORDER THE DEFENDANT TO PAY THE WHOLE OF THE COSTS PURSUANT TO ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE AND ALSO THE EXPENSES NECESSARILY INCURRED BY THE PARTIES FOR THE PURPOSE OF THE PROCEEDINGS , IN PARTICULAR TRAVEL AND SUBSISTENCE EXPENSES AND LAWYER ' S FEES PURSUANT TO ARTICLE 73 ( B ) OF THOSE RULES ,
Grounds
1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 16 AUGUST 1983 , ALAIN PIERRE ALLO AND OTHER OFFICIALS OF THE ECONOMIC AND SOCIAL COMMITTEE BROUGHT AN ACTION FOR THE ANNULMENT OF THEIR SALARY SLIPS FOR DECEMBER 1982 IN RESPECT OF SALARY ARREARS PAID PURSUANT TO COUNCIL REGULATION ( ECSC , EEC , EURATOM ) NO 3139/82 OF 22 NOVEMBER 1982 ( OFFICIAL JOURNAL 1982 , L 331 , P . 1 ) AND , IN SO FAR AS IS NECESSARY , FOR THE ANNULMENT OF THE ECONOMIC AND SOCIAL COMMITTEE ' S EXPRESS OR IMPLIED DECISIONS REJECTING THE COMPLAINTS LODGED UNDER ARTICLE 90 ( 2 ) OF THE STAFF REGULATIONS . THE APPLICANTS SEEK THE ANNULMENT OF THOSE MEASURES IN SO FAR AS THE SALARY ARREARS FOR THE PERIOD COMMENCING ON 1 JULY 1980 WERE NOT INCREASED BY DEFAULT INTEREST CALCULATED AT THE NORMAL RATE , TO WHICH THEY CLAIM TO BE ENTITLED . THE APPLICANTS ALSO SEEK AN ORDER REQUIRING THE ECONOMIC AND SOCIAL COMMITTEE TO PAY THEM COMPENSATORY INTEREST ON ACCOUNT OF THE LOSS OF PURCHASING POWER IN THE INTERVENING PERIOD .
2 ON 20 JANUARY 1981 THE COUNCIL ADOPTED , PURSUANT TO ARTICLE 65 OF THE STAFF REGULATIONS , REGULATION ( EURATOM , ECSC , EEC ) NO 187/81 ADJUSTING THE SALARIES AND PENSIONS OF OFFICIALS AND OTHER SERVANTS OF THE EUROPEAN COMMUNITIES AND THE WEIGHTINGS APPLYING THERETO ( OFFICIAL JOURNAL 1981 , L 21 , P . 18 ), DEPARTING FROM THE CORRESPONDING PROPOSAL SUBMITTED BY THE COMMISSION ON 9 DECEMBER 1980 .
3 IN PURSUANCE OF THAT REGULATION , ON 10 FEBRUARY 1981 THE COUNCIL ADOPTED REGULATION ( EURATOM , ECSC , EEC ) NO 397/81 FIXING THE TABLES OF SALARIES AND OTHER COMPONENTS OF REMUNERATION ( OFFICIAL JOURNAL 1981 , L 46 , P . 1 ).
4 ON 16 MARCH 1981 THE COMMISSION BROUGHT AN ACTION REQUESTING THE COURT TO DECLARE VOID REGULATION NO 187/81 AND ARTICLES 1 ( A ), 2 ( A ) AND ( B ) AND THE FIRST PARAGRAPH OF ARTICLE 11 OF REGULATION NO 397/81 .
5 IN ITS JUDGMENT OF 6 OCTOBER 1982 IN CASE 59/81 ( COMMISSION V COUNCIL ( 1982 ) ECR 3329 ), THE COURT DECLARED VOID REGULATION NO 187/81 AND THE AFORESAID PROVISIONS OF REGULATION NO 397/81 .
6 IN ORDER TO COMPLY WITH THAT JUDGMENT , THE COUNCIL ADOPTED REGULATION NO 3139/82 OF 22 NOVEMBER 1982 , ACTING ON A PROPOSAL FROM THE COMMISSION DATED 29 OCTOBER 1982 .
7 THE COMMISSION , IN ITS CAPACITY AS THE APPOINTING AUTHORITY , PROCEEDED TO CALCULATE AND PAY SALARY ARREARS PURSUANT TO THE AFORESAID REGULATION FOR THE PERIOD FROM 1 JULY 1980 UNTIL THE DATE OF PAYMENT .
8 EACH OF THE APPLICANTS LODGED A STANDARD-FORM COMPLAINT UNDER ARTICLE 90 ( 2 ) OF THE STAFF REGULATIONS CONTENDING THAT ACCOUNT HAD TO BE TAKEN OF THE LOSS OF PURCHASING POWER DURING THE PERIOD IN RESPECT OF WHICH THE ARREARS WERE PAID PURSUANT TO COUNCIL REGULATION NO 3139/82 AND CLAIMING DEFAULT INTEREST WHICH , IN THEIR VIEW , SHOULD HAVE BEEN PAID TOGETHER WITH THOSE ARREARS .
9 THOSE COMPLAINTS WERE REJECTED BY EXPRESS OR IMPLIED DECISIONS , WHEREUPON THE APPLICANTS COMMENCED THESE PROCEEDINGS .
10 BY JUDGMENT OF 4 JULY 1985 , THE THIRD CHAMBER OF THE COURT DECLARED THE APPLICATION INADMISSIBLE IN SO FAR AS IT CONTAINED A CLAIM FOR THE PAYMENT OF COMPENSATORY INTEREST , AND REFERRED THE OTHER CLAIMS PUT FORWARD BY THE APPLICANTS TO THE FULL COURT FOR CONSIDERATION .
11 THE APPLICANTS MAINTAIN THAT IN EACH CASE THE APPOINTING AUTHORITY WAS UNDER AN OBLIGATION TO PAY INTEREST ON THE SALARY ARREARS ON ACCOUNT OF THE DELAY IN PAYMENT .
12 IN SUPPORT OF THEIR ARGUMENT THE APPLICANTS REFER TO ARTICLE 62 OF THE STAFF REGULATIONS , WHICH PROVIDES THAT AN OFFICIAL WHO IS DULY APPOINTED IS ENTITLED TO THE REMUNERATION CARRIED BY HIS GRADE AND STEP AND THAT HE MAY NOT WAIVE HIS ENTITLEMENT TO REMUNERATION , AND TO THE FIRST PARAGRAPH OF ARTICLE 16 OF ANNEX VII TO THE STAFF REGULATIONS , WHICH PROVIDES THAT PAYMENT OF REMUNERATION IS TO BE MADE ON THE 15TH DAY OF EACH MONTH FOR THE MONTH THEN CURRENT . IN THEIR VIEW , IT FOLLOWS FROM THOSE PROVISIONS THAT , IN THE EVENT OF A DELAY IN PAYMENT , DEFAULT INTEREST SHOULD BE PAID ON THEIR REMUNERATION .
13 THE APPLICANTS ALSO CONTEND THAT THE FAILURE TO PAY DEFAULT INTEREST IS CONTRARY TO ARTICLE 65 ( 1 ) OF THE STAFF REGULATIONS , WHICH ESTABLISHES A PROCEDURE FOR THE ANNUAL REVIEW OF REMUNERATION OF OFFICIALS AND OTHER SERVANTS OF THE COMMUNITIES IN ACCORDANCE WITH THE CRITERIA APPLIED IN THE METHODS APPROVED BY THE COUNCIL , ACTING ON A PROPOSAL FROM THE COMMISSION . THEY EMPHASIZE THAT , IN THIS CASE , THE COUNCIL DECIDED , WHEN IT ADOPTED REGULATION NO 3139/82 , THAT COMMUNITY OFFICIALS WERE ENTITLED AS FROM 1 JULY 1980 TO HAVE THEIR REMUNERATION ADJUSTED . ACCORDINGLY , THE APPOINTING AUTHORITY WAS OBLIGED TO PAY DEFAULT INTEREST TO THOSE OFFICIALS IN ORDER TO TAKE ACCOUNT OF THE FACT THAT ALMOST TWO YEARS HAD ELAPSED SINCE THE DATE ON WHICH THOSE SUMS SHOULD HAVE BEEN PAID TO THEM UNDER THE STAFF REGULATIONS .
14 THE COMMISSION OBSERVES THAT ARTICLE 62 OF THE STAFF REGULATIONS MERELY LAYS DOWN IN GENERAL TERMS THAT OFFICIALS ARE ENTITLED TO REMUNERATION AND MAY NOT WAIVE THEIR ENTITLEMENT TO IT ; THIS DOES NOT MEAN THAT THE CONTENT OF THE RIGHT TO REMUNERATION MAY NOT BE AMENDED IN COMPLIANCE WITH THE STAFF REGULATIONS SINCE ARTICLE 62 THEREOF IS ENTIRELY UNCONNECTED WITH THE AMOUNT OF REMUNERATION , WHICH IS DETERMINED BY ARTICLES 63 , 64 , 65 AND 66 OF THE STAFF REGULATIONS . THE COMMISSION ALSO CONSIDERS THAT ARTICLE 65 ( 1 ) OF THE STAFF REGULATIONS LEAVES THE CHOICE OF THE MOST APPROPRIATE MANNER AND FORM IN WHICH TO IMPLEMENT A POLICY ON REMUNERATION TO THE COUNCIL . THAT PROVISION DOES NOT ESTABLISH A SYSTEM OF AUTOMATIC INDEXING OR AUTOMATIC INCREASES BUT MERELY LAYS DOWN A PROCEDURE FOR ADJUSTMENT IN WHICH THE COUNCIL HAS A BROAD DISCRETION . IT FOLLOWS , IN THE COMMISSION ' S VIEW , THAT ARTICLE 65 ( 1 ) OF THE STAFF REGULATIONS DID NOT REQUIRE THE COMMISSION , ON ITS OWN INITIATIVE , TO PAY DEFAULT INTEREST ON THE SALARY ARREARS WHICH FORMED THE SUBJECT-MATTER OF REGULATION NO 3139/82 , SINCE THAT REGULATION DID NOT PROVIDE FOR THE PAYMENT OF SUCH INTEREST .
15 IT SHOULD BE NOTED THAT ARTICLE 62 OF THE STAFF REGULATIONS AND ARTICLE 16 OF ANNEX VII TO THE STAFF REGULATIONS , WHICH ARE RELIED UPON BY THE APPLICANTS , DETERMINE ONLY THE TIME OF PAYMENT OF THE SALARY DUE PURSUANT TO THE RULES IN FORCE . THEY DO NOT PROVIDE FOR THE PAYMENT OF JINTEREST IN THE EVENT OF DELAY IN THE ENTRY INTO FORCE OF REGULATIONS FIXING THE REMUNERATION OF OFFICIALS AND OTHER SERVANTS RETROACTIVELY . ARTICLE 65 ( 1 ) OF THE STAFF REGULATIONS MERELY ESTABLISHES A PROCEDURE FOR THE ANNUAL REVIEW OF OFFICIALS ' REMUNERATION WHICH STARTS IN SEPTEMBER , NORMALLY LASTS A FEW MONTHS AND LEADS TO THE ADOPTION OF A REGULATION WHICH NECESSARILY HAS RETROACTIVE EFFECT FROM 1 JULY OF THE PRECEDING YEAR . NOTWITHSTANDING THE FACT THAT THOSE REGULATIONS NECESSARILY HAVE RETROACTIVE EFFECT , ARTICLE 65 MAKES NO PROVISION FOR THE PAYMENT OF DEFAULT INTEREST .
16 IT FOLLOWS THAT THE SUBMISSIONS ALLEGING AN INFRINGEMENT OF ARTICLES 62 AND 65 ( 1 ) OF THE STAFF REGULATIONS MUST BE REJECTED AS UNFOUNDED .
17 NEXT , THE APPLICANTS MAINTAIN THAT THE COMMISSION SHOULD HAVE PAID THEM DEFAULT INTEREST PURSUANT TO A GENERAL PRINCIPLE , WHICH EXISTS IN THE LAWS OF THE MEMBER STATES AND HAS BEEN RECOGNIZED IN DECISIONS OF THE COURT , TO THE EFFECT THAT ANY DELAY IN THE DISCHARGE OF A PECUNIARY OBLIGATION GIVES RISE TO AN OBLIGATION TO PAY DEFAULT INTEREST . THEY MAINTAIN THAT THE APPOINTING AUTHORITY IS REQUIRED TO PAY DEFAULT INTEREST WHERE THERE HAS BEEN AN EXCESSIVE AND ABNORMAL DELAY IN THE ADOPTION OF THE REGULATION ENVISAGED BY ARTICLE 65 ( 1 ) OF THE STAFF REGULATIONS . IN THEIR VIEW , THAT IS THE CASE HERE SINCE THERE WAS A DELAY OF ALMOST TWO YEARS IN THE ADOPTION OF REGULATION NO 3139/82 .
18 THE COMMISSION MAINTAINS THAT , EXCEPT IN CASES WHERE INTEREST STARTS TO ACCRUE AUTOMATICALLY BY VIRTUE OF A LEGAL PROVISION , THE POSSIBILITY OF CLAIMING DEFAULT INTEREST IS CONDITIONAL ON FORMAL NOTICE HAVING BEEN GIVEN BEFOREHAND . IN THIS CASE , THAT CONDITION HAS NOT BEEN FULFILLED SINCE THE STAFF REGULATIONS DO NOT PROVIDE FOR THE AUTOMATIC PAYMENT OF DEFAULT INTEREST AND THE APPLICANTS DID NOT SUBMIT A CLAIM FOR SUCH INTEREST BEFORE THEY WERE PAID THE PRINCIPAL SUM OWED TO THEM BY THE COMMISSION .
19 IT MUST BE BORNE IN MIND THAT IN ANY EVENT AN OBLIGATION TO PAY DEFAULT INTEREST CAN ARISE ONLY WHERE THE AMOUNT OF THE PRINCIPAL SUM OWED IS CERTAIN OR CAN AT LEAST BE ASCERTAINED ON THE BASIS OF ESTABLISHED OBJECTIVE FACTORS . IN THIS CASE , A DEBT OF A CERTAIN OR ASCERTAINABLE AMOUNT CAME INTO BEING ONLY WITH THE ENTRY INTO FORCE OF REGULATION NO 3139/82 .
20 THE POWERS CONFERRED ON THE COUNCIL BY ARTICLE 65 OF THE STAFF REGULATIONS FOR ADJUSTING THE REMUNERATION AND PENSIONS OF OFFICIALS AND OTHER SERVANTS AND FOR FIXING THE WEIGHTINGS APPLICABLE TO SUCH REMUNERATION AND PENSIONS INVOLVE THE EXERCISE OF A DISCRETION . NO CERTAINTY EXISTS AS TO THE AMOUNT BY WHICH THE REMUNERATION AND PENSIONS WILL BE ADJUSTED OR THE MANNER IN WHICH THE WEIGHTINGS WILL BE FIXED UNTIL THE COUNCIL HAS EXERCISED THOSE POWERS AND ADOPTED THE REGULATION ON THE MATTER . ALTHOUGH IN ITS AFORESAID JUDGMENT OF 6 OCTOBER 1982 IN CASE 59/81 THE COURT HELD THAT THE COUNCIL MUST , IN THE EXERCISE OF ITS DISCRETION , TAKE CERTAIN FACTORS INTO CONSIDERATION , IT DID NOT , CONTRARY TO THE APPLICANTS ' ASSERTION , EITHER DETERMINE THE AMOUNTS WHICH WERE ACTUALLY PAYABLE TO OFFICIALS AND OTHER SERVANTS PURSUANT TO ARTICLE 65 OF THE STAFF REGULATIONS OR ESTABLISH THE OBJECTIVE CRITERIA ENABLING THOSE AMOUNTS TO BE DETERMINED SUFFICIENTLY PRECISELY .
21 SIMILARLY , THE ARGUMENT THAT THE RETROACTIVE EFFECT OF REGULATION NO 3139/82 CONSTITUTED RECOGNITION OF THE FACT THAT THE SUM OWED TO EACH OFFICIAL WAS ALREADY CERTAIN AT EACH DATE ON WHICH REMUNERATION WAS PAYABLE UNDER THE STAFF REGULATIONS , CANNOT BE ACCEPTED . BEFORE THE ENTRY INTO FORCE OF REGULATION NO 3139/82 , THE AMOUNT OF THE PRINCIPAL SUM OWED WAS UNCERTAIN . AS REGARDS THE PERIOD FOLLOWING THE ENTRY INTO FORCE OF THE REGULATION , THE APPLICANTS HAVE NOT ARGUED THAT THERE WAS A DELAY IN THE PAYMENT OF THE SUMS DUE PURSUANT TO THAT REGULATION .
22 A FURTHER QUESTION WHICH COULD ARISE IS WHETHER AN OBLIGATION TO PAY DEFAULT INTEREST SHOULD BE RECOGNIZED WHERE THERE WAS AN UNJUSTIFIED DELAY IN ACTUALLY DETERMINING THE AMOUNT OF THE REMUNERATION OWED . HOWEVER , IN THIS CASE , THE COUNCIL ADOPTED REGULATION NO 3139/82 WITH ALL DUE DILIGENCE ON 22 NOVEMBER 1982 IN COMPLIANCE WITH THE COURT ' S JUDGMENT OF 6 OCTOBER 1982 .
23 IT FOLLOWS THAT , IN THIS CASE , THERE IS NO OBLIGATION TO PAY DEFAULT INTEREST . ACCORDINGLY , THOSE OF THE APPLICANTS ' CLAIMS WHICH WERE REFERRED BY JUDGMENT OF 4 JULY 1985 OF THE THIRD CHAMBER OF THE COURT TO THE FULL COURT FOR CONSIDERATION MUST BE REJECTED . THE APPLICATION MUST THEREFORE BE DISMISSED IN ITS ENTIRETY .
Decision on costs
COSTS
24 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE , THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS IF THEY HAVE BEEN ASKED FOR IN THE SUCCESSFUL PARTY ' S PLEADING . HOWEVER , UNDER ARTICLE 70 OF THE RULES OF PROCEDURE , IN PROCEEDINGS BROUGHT BY SERVANTS OF THE COMMUNITIES , INSTITUTIONS ARE TO BEAR THEIR OWN COSTS .
Operative part
ON THOSE GROUNDS ,
THE COURT
HEREBY :
( 1 ) DISMISSES THE APPLICATION .
( 2 ) ORDERS THE PARTIES TO BEAR THEIR OWN COSTS .
Full & Egal Universal Law Academy