Following the unfavourable judgments delivered on Tuesday 19 November by the Court of Justice concerning the application of the method of adjusting our remuneration and pensions for 2011, many of you have shared with us your surprise and disappointment. Faced with this particularly complex situation, R&D immediately initiated an in-depth legal analysis – you will find the preliminary conclusions below.

 Background

The Staff Regulations in force in 2011 laid down a method for an annual adjustment of our salaries based on the equivalence of our purchasing power with that of national officials according to a representative basket of the Member States of the European Union. It also included an exception clause in order to take account of a sudden crisis, in which case the Commission must provide a report to demonstrate the existence and extent of such a cri­sis.

This clause stipulated that, in case of serious and sudden deterioration in the economic and social situation within the Union, on the one hand, the automatic application of this method was suspended and, on the other hand, the Parliament and the Council should decide together, on the basis of a Commission proposal, following the ordinary legislative procedure, on the salary adjustment, without being bound by the “method for annual adjustment”.

Based on the analysis of the economic situation, the Commission stated (in 2011 and 2012) that the implementa­tion of the exception clause was not valid. The Council for its part, which defended the opposite conclusion, had challenged the report provided by the Commission, and therefore had not agreed to adapt our salaries. The Com­mission had brought the matter before the European Court of Justice, considering that the Council had breached its obligations as defined in the Staff Regulations.

The judgments 

The Court rejected the Commission’s action in holding that it is for the Council and not the Commission to estab­lish, at the initial stage of the proceedings, a situation of economic and social crisis, triggering the emergency pro­cedure and the adoption of a regulation following the ordinary legislative procedure. In other words, in this case it is for the Council and the Parliament to decide on the appropriate measures proposed by the Commission.

 The consequences

Based on these decisions, the Commission is now required to submit to the European Parliament and the Council new proposals that reflect the serious and sudden deterioration in the economic and social situa­tion determined by the Council in 2011.

Fortunately, the Court, in its judgment in case C-63/12, refers in the first place to the obligation to decide on the annual adjustment of remuneration and pensions.

However, the question arises relating to the measure of discretion, in the later stage of the legislative process (involving the Parliament), as to the notion of “sudden deterioration in the economic and social situation within the Union” that the Court describes as an objective concept (paragraph 64 of the judgment). The Court indicates in fact that it is only “at this stage of the procedure”, i.e. before the intervention of Parliament, that the finding as to the existence of critical difficulties is for the Council to decide.

Therefore, it is not excluded that the Council’s finding at the stage of the procedure triggering the exception clause is questioned by Parliament or censured by the Court!

In any event, and as part of this exceptional procedure, the Commission enjoys a measure of discretion as to the measures to be proposed building, where appropriate, on other factors such as those relating to the management of human resources and in particular, the recruitment needs (paragraph 74 of the judgment). Whereas, in Regula­tion No. 1023/2013 of 22 October 2013 implementing the reform of the Staff regulations, recital 2 specifically re­fers to “difficulties currently faced by the institutions for the recruitment of officials or agents from some member states”: this regulation, following the contested adaptation, is part, however, of the difficulties that were encoun­tered in 2011 given the process of modification of the Staff Regulations.

The conclusion:

It is up to the Commission, pursuant to this judgment, to submit a proposal to Parliament and the Coun­cil that will be required to make this adjustment of remuneration and pensions.

This adjustment by the exceptional procedure seems, where appropriate, to be subject to a challenge by the Par­liament on the basis of data provided by the Commission and to appeals relating to the recognition of the sudden deterioration in the economic and social situation.

In case of disagreement between the Parliament and the Council leading to the lapse of the Commission pro­posal according to the ordinary legislative procedure (co- decision), abstaining from making a salary adjustment could also be the subject of an appeal, given the obligation to conduct an annual adjustment of remuneration and pensions as the Court noted.

The point of view of R&D:

The Commission must act and defend the rights of the staff of the institutions!

Parliament through its President – Mr Schulz – and Mrs D. Roth-Behrendt has already played a key role in the defence of our civil service and the maintenance of a fair salary adjustment method: the Commission must be able to count on their support in the framework of a new proposal that will be, without doubt, just and that will defend the staff who have suffered since 2004, and who will, in addition, be subjected to a wage freeze in 2013 and 2014, the re-introduction of the special levy, the non- adjustment of pension contributions , etc.

R&D cannot imagine that the Commission will not allow such a situation to continue; it weakens our contractual agent colleagues more and more as well as the new recruited staff. How can the Commission accept the fact that the salary of a GFII contractual agent is now below the minimum wage in Luxembourg?

We will keep you informed of the results of this procedure which is an im­portant stage in the process of redistributing roles between the Commis­sion, Council, Parliament and Court of Justice.