The Court of Justice confirms the unlawfulness of taking nationality into account when calculating the reimbursement of annual travel expenses!

On 18 April 2024, the Court of Justice delivered a CURIA – Documents (europa.eu) judgment in which it declared unlawful the second paragraph of Article 8 of Annex VIII to the Staff Regulations, concerning the methods for calculating the flat-rate reimbursement of annual travel expenses of certain officials and other servants, was unlawful.

That provision, inserted into the Staff Regulations at the time of the 2014 reform, against the opinion of R&D and all staff representatives, shall read as follows :

• ‘1.      Officials who are entitled to the expatriation or foreign residence allowance shall be entitled, within the limit laid down in paragraph 2, in each calendar year to a flat-rate payment corresponding to the cost of travel from the place of employment to the place of origin as defined in Article 7 [of that Annex] for themselves and, if they are entitled to the household allowance, for the spouse and dependants within the meaning of Article 2 [of that Annex].
• […]
• 2.      The flat-rate payment shall be based on an allowance per kilometre of geographical distance between the official’s place of employment and his place of origin.
• Where the place of origin as defined in Article 7 [of that Annex] is situated outside the territories of the Member States of the Union as well as outside the countries and territories listed in Annex II to the [FEU] Treaty or outside the territories of the Member States of the European Free Trade Association [(EFTA)], the flat-rate payment shall be based on an allowance per kilometre of geographical distance between the official’s place of employment and the capital city of the Member State of which he is a national. […]
• […]
• 4.      Paragraphs 1, 2 and 3 of this Article shall apply to officials whose place of employment is within the territories of a Member State. […]

In its judgment, the Court now finds that the use of the distance between the place of employment and the capital of the Member State of which the staff member is a national, which is not the same as the place of origin, constitutes discrimination on grounds of nationality. Taking this nationality into account in the manner of calculating the allowance bears no relation to the objective of the rule, which is to reimburse annual travel expenses at the place of origin.

As also pointed out by R&D, the Court confirms that considerations of a purely budgetary and administrative nature cannot justify discrimination between staff members in comparable situations!

It should be borne in mind that, during the discussions on the Reform, I pointed out that the legislature had several ways of achieving the objective of budgetary rationalisation but without disregarding the purpose of Article 8 or creating discrimination on grounds of nationality between the officials concerned.

We complained that on the pretext of ‘modernising, simplifying and making their application simpler and more transparent the rules on travelling time and annual payment of travel expenses between the place of employment and the place of origin’ these new provisions had in fact led to absolutely absurd and unjustified consequences depending on the nationality of the colleague concerned.

All our comments were rejected and this abrupt and unacceptable change in the arrangements for reimbursement of annual travel expenses was finally imposed.

As we stated in the course of the negotiations, in paragraph 81 of its judgment, the Court confirms that:  

• [… considerations of a purely budgetary, administrative or staff policy nature cannot in themselves constitute an objective justification for the difference in treatment between officials in comparable situations resulting from the use of a criterion unconnected with the objective pursued by Article 8 of Annex VII to the Staff Regulations.

 It follows from the foregoing that, by holding that the difference in treatment introduced by the EU legislature according to the nationality of the officials concerned was justified by considerations of a budgetary, administrative or administrative nature relating to the management of human resources, the General Court erred in law. ’

Following that judgment of the Court of Justice, the amount of the allowance to be paid to the officials and other staff concerned is that resulting from ‘the application of an allowance per kilometre of geographical distance between their place of employment and their place of origin’.

For the future, the institutions will therefore have to amend the methods for calculating these flat-rate allowances for the colleagues affected by these provisions. However, they are not required to review the compensation paid from 2014 to 2023 .

Do not hesitate to consult us to check that the future calculations (from 2024 onwards) are carried out correctly and, if necessary, to lodge a complaint within the three-month time limit laid down in the Staff Regulations.

There are no ‘small reforms’ or ‘surgical reforms’!

In addition to the benefits for the colleagues concerned, this file is very important because it provides an enlightening example of finally understanding the true political will exercised by legislator has in the context of any reform of the Staff Regulations.

An increasing number of Member States and the most hostile factions of the European Parliament towards our civil service, are only interested in cutting, reducing, penalising at any cost and with any justification, imposing, as in the present case, even the most lenient provisions! 

All this, sometimes also on the basis of negative proposals from the Commission, presented with the illusion of being credible, in order to convince the legislator to avoid even more harmful consequences.

For these reasons, it is simply irresponsible to consider “small Reforms”, “surgical reforms”, with the illusion of power maitrising the process and negotiations by limiting them to one or the other measure.

The fact, and in particular the experience of the last two Reforms,  amply demonstrates that once the Commission has submitted its proposal for a Reform, the legislator remains free to amend any other provision of the Staff Regulations, not only those aspects which are not covered by the initial proposal, but also those which the Commission has expressly excluded from the possibility of amendment.  

Cristiano Sebastiani,

Chair