Judgment_paragraph 2. · Luigi De Pascale v European Commission (164/80)

2.In its defence the Commission observes that as regards the instances of lack of consultation neither the Economic and Social Committee nor the Court or Auditors are institutions within the meaning of the Treaties and accordingly the Council was not legally obliged to seek their opinions. According to the provision in Article 1 of the Staff Regulations the Economic and Social Committee and the Court of Auditors shall be treated as institutions of the Communities solely “for the purposes of the application of the Staff Regulations”, not in connection with the establishment or amendment of them. Moreover, Regulation No 3085/78 is in fact a provision based in principle on Article 24 of the Merger Treaty and not on Article 110 of the Staff Regulations. It is an effective amendment to the Staff Regulations and as such falls exclusively within the purview of the Council; it must not be viewed as a general provision for giving effect to the Staff Regulations within the meaning of Article 110; the twofold consultation provided for in that article is not therefore required in this case.As to the allegation of insufficient consultation the Commission observes that the applicant's view would be well founded if, after a first proposal from the Commission was put forward, and before the Council adopted any decision on it, a quite new proposal was submitted, that is to say, one concerning other matters or making substantial amendments (cf. a contrario Case 41/69 ACF Chemie/arma [1970] ECR 661). For the same reasons the consultative procedure provided for in Article 24 of the Merger Treaty does not have to be repeated every time a minor alteration is made. In this case by a communication of 29 November 1978 the Commission suggested to the Council that Article 1 of the initial proposal of April 1977 be reworded. A comparison with the last-mentioned texts shows clearly that the new provisions do not amount to a substantial amendment. In the case of pensions, in particular, updating the relevant exchange rates on the basis of the European unit of account had the same financial consequences as those resulting from the application of Regulation No 3085/78. In fact, the exchange rates used for implementing the general budget of the Communities as at 1 July 1978 were strictly related to the value of the currencies considered (Belgian francs on the one hand, other currencies on the other) with respect to the European unit of account on the same date.The Parliament was certainly not led intő error but acted on full knowledge of the circumstances. Its opinion was that it was “appropriate... to abandon the exchange ratios introduced in 1965”, and it noted the Commission's assurance that its proposal would “in no way affect the real value of the payments to officials in the form of remunerations, pensions and allowances”. From the report of the Committee on Budgets, moreover, it emerges that “as regards pensions... the transition to the EUA system... will likewise entail no change, to the extent that the pensions are paid in the currency of the country of residence of the beneficiary. However, there will no longer be any advantage to be gained from opting, pursuant to Article 45 of Annex VIII to the Staff Regulations, for payment in currencies other than of the country of residence.”The Court has defined the extent of the obligation to consult the Parliament in two recent judgments (Case 138/79 Roquette and Case 139/79 Maizena [1980] ECR 3333 and 3393) as a requirement which “implies that the Parliament has expressed its opinion”, without prejudice to the cases, judgment on which was reserved by the Court, where the Parliament, by its own conduct and regardless of all efforts made by the Council to obtain its opinion, makes it impossible to observe the requirement of consultation.As regards the breach of general principles the defendant considers that the applicant's criticisms are totally without foundation. The applicant educes from the concept of “vested rights” an opinion contrary to the case-law of the Court (cf. Case 28/74 cited above in which it was held that “an official cannot in any case claim a vested right unless the facts giving rise to that right arose under a particular set of Staff Regulations prior to the amendment decided upon by the Community-authority”). That is precisely the view which appears to have been taken also by the national courts and by the Administrative Tribunal of the United Nations (see Puvrez, 4 December 1961, Clunet Reports 1963, p. 117). That ruling is the logical consequence of the view that the official's relationship is governed not by contract but by regulations (cf. the opinion of Mr Advocate General Gand in Case 20/68 Pasetti-Bombardella [1969] ECR 235, at p. 250), a view which has been endorsed by the most authoritative sources (cf. Professor P. Weil, “La nature du lien de fonction publique dans les organisations internationales”, Revue Générale de Droit International Public 1963, p. 274). It also forms the corollary of the principle that administrative measures must not be retroactive. The “advantages lawfully acquired” by the applicant are fully safeguarded as regards the favourable conditions which were applied on payment of his pension prior to 1 October 1979. On the other hand, it is no longer possible to speak of a “vested right” to have those same favourable conditions maintained in force as regards pension payments made after the Staff Regulations were amended.In order to prove an unfavourable change in the fundamental conditions of such a kind as to influence the applicant's decision to agree to be bound by the Staff Regulations, it must also be shown on what grounds the applicant relied, when he entered the service in 1958, to perceive that the pension scheme in force contained a guarantee for officials that it would remain unchanged so as to guarantee them for all time the advantages which existed before the reforms in question. The floating of currencies after 1971, in conjunction with the fact that the IMF rates continued to be used and the option afforded by Article 45 of Annex VIII to the Staff Regulations, brought about the unfair situation which conferred advantages on certain officials when in fact such treatment was in no way supported by the ratio legis of the provision.The staff could not have been under any misapprehension any more than the Parliament as to the practical repercussions on pensions of the updating of exchange rates. An administrative circular distributed in May 1978 pointed out that “the recalculation of the weightings would ensure that bringing the rates of exchange up to date will have no undesirable effects, since the currency in which payment is made is that (...) of the country of residence in the case of pensioners...”. Before that a circular distributed by the staff unions dated 23 February 1978 contained the following remark: “Many pensioners will find that their pension has been dramatically altered. The Commission'must consider such problems on a case-by-case basis together with the Staff Committee in order to avoid unacceptable situations arising”.As regards alleged discrimination between officials, in particular where transfers of money are concerned, and pensioners the Commission contends that the only legal principle applicable is that there must be no arbitrary discrimination for which there are no objective grounds rather than that the principle of equality is applicable. The situations in this instance, however, are not the same or even comparable. According to the third subparagraph of Article 4 of Regulation No 3085/78 the new system was to be introduced, in the case of pensions and allowances which would be reduced, only from 1 October 1979, whereas the regulation was to apply from 1 April 1979, in particular as regards transfers. In addition the reduction in pensions was to be effected in stages. As to the transitional measures which were adopted at the time and to which the applicant refers they concern the calculation of national maintenance costs in determining entitlement to the allowance for persons treated as dependent children and therefore have nothing whatsoever to do with the comparison to which he refers.The Commission is opposed to the adoption of any compensatory measures which, according to the applicant, should be based on the general duty of assistance which is incumbent upon the defendant. The latter has shown that such a wide definition of the duty of assistance conflicted with the fact that the employment relationship in the public service is governed by regulations. It would appear that an incorrect view of the concept of “vested rights” already raised is at the root of the matter. Article 24 of the Staff Regulations may not therefore be relied upon for that purpose (cf. the opinion of Mr Advocate General Dutheillet de Lamothe in Joined Cases 63 to 65/70 Bode and Others [1971] ECR 549, at p. 557) and the result of its being relied upon would be to render ineffectual the power of the authority responsible for the Staff Regulations to enact with immediate effect provisions adapting those regulations to economic realities even if such an adaptation were to erode or eliminate the advantages previously enjoyed.