DELIVERED ON 14 MAY 1981 (*1)

Mr President,

Members of the Court,

This is yet another staff case concerning the payment of the expatriation allowance provided for by Article 69 of the Staff Regulations of Officials of the European Communities. The conditions for the award of the allowance are laid down by Article 4 (1) of Annex VII to the Staff Regulations, which provides that it is to be paid inter alia:

“...

(b)To officials who are or have been nationals of the State in whose territory the place where they are employed is situated but who during the ten years ending at the date of their entering the service habitually resided outside the European territory of that State for reasons other than the performance of duties in the service of a State or of an international organization.”

The applicant, who took up employment on 3 September 1979 at the Joint Research Centre at Ispra as a temporary servant in Grade C 3 (Craftsman), relies on the above-mentioned provision, which by virtue of Article 21 or the Conditions of Employment of Other Servants of the European Communities applies by analogy to that category of servant.

The applicant, an Italian national who was born in 1950 in Monopoli (Italy), emigrated with his family in 1962 at the age of 12 to the Grand Duchy of Luxembourg. His family settled in Diekirch, where he completed his schooling and vocational training. In 1966 he began an apprenticeship as a car-mechanic in Ingeldorf, which he successfully completed in April 1970. On 5 May 1970 his employer granted him leave so that he could perform his military service in the Italian Navy. Immediately following his discharge on 15 April 1972 the applicant returned to his place of residence in Luxembourg and resumed employment with his previous employer. In 1976 he rented a service station in the City of Luxembourg and, after passing the examination for the Master's Diploma, took up residence there until his engagement at Ispra.

It is clear that both before and after his engagement at Ispra officials there told him that he would receive the expatriation allowance. However, his salary slip for the months of September and October 1979 did not mention the allowance and so on 11 October 1979 he sent a memorandum to Mr Ellerkmann, the Site Director at the Joint Research Centre, requesting payment of the allowance in question. Since the allowance was not paid despite the intervention of a Commission “mediator”, on 30 January 1980 the applicant submitted a formal request on a standard form under Article 90 of the Staff Regulations for payment of the expatriation allowance. The request was received by the Secretary-General of the Commission on 6 February 1980.

On 1 July 1980, after receiving no reply within the four-month period laid down by Article 90 (1) of the Staff Regulations, he submitted a complaint to the Secretary-General of the Commission under Article 90 (2) against the implied decision rejecting his request, again using a pre-printed form.

Under cover of a letter dated 8 July 1980 another letter from the Commission, dated 23 June 1980, was sent to the applicant, in which the applicant's “complaint under Article 90 (2) of the Staff Regulations” of 30 January 1980 was rejected.

On 4 September 1980 Mr Garganese brought an action before the Court of Justice in which he claims that the Court should annul the Commission's decision of 23 June 1980 and order the Commission to pay him the expatriation allowance in accordance with Article 4 (1) (b) of Annex VII to the Staff Regulations as from 3 September 1979 together with default interest at 6 % per annum on the arrears of expatriation allowance, that interest to be calculated as from the various dates on which payment fell due to the date of payment. He also asks that the Commission be ordered to pay the costs of the action.

My opinion on this matter is as follows:

I — Admissibility

The Commission, as the defendant, raises an objection of inadmissibility against the action on the ground that it was not preceded by a complaint against the act adversely affecting the applicant lodged within the period laid down by Article 90 (2) of the Staff Regulations. It submits that its refusal to grant the expatriation allowance was apparent, by implication only but nevertheless clearly, from the applicant's first salary statement which, as his letter to Mr Ellerkmann shows, came to his notice no later than 11 October 1979. The salary statement contained no entry in the column provided for the expatriation allowance, a point which the applicant cannot have overlooked in checking the statement since his attention was drawn specifically towards it by the previous conversations. The applicant should therefore have lodged a complaint through official channels against the act adversely affecting him under Article 90 (2) of the Staff Regulations within no more than three months. If he is adversely affected, he can no longer avoid the time-limits laid down by Article 90 (2) of the Staff Regulations by submitting a request under Article 90 (1). For that reason his “request” of 30 January 1980 must properly be regarded as a complaint under Article 90 (2), which was submitted out of time.

However even if his memorandum of 11 October 1979 to Mr Ellerkmann were to be regarded as a complaint, his application to the Court, which was lodged on 4 September 1980, must nevertheless have been out of time. Consequently, the Commission's reply of 23 June 1980 to the memorandum of 30 January 1980, which is the subject of the application, merely constitutes confirmation of the decision refusing payment of the allowance notified to the applicant no later than 11 October 1979 and therefore cannot of itself form the basis of an action.

As is clear from that argument, it is crucial to the question of admissibility whether the salary statement, the applicant's knowledge of which on 11 October 1979 is undisputed, may be regarded as an act adversely affecting him, which was merely confirmed by the Commission's decision of 23 June 1980.

In that regard I must agree with the defendant's submission that the sending of a monthly salary statement may cause the time for appeal to start to run, as the Court, too, has emphasized in its judgment of 21 February 1974 in Joined Cases 15 to 33, 52, 53, 57 to 109, 116, 117, 123, 132 and 135 to 137/73 Roswitha Schots, née, Kortner, and Others v Council and Commission of the European Communities and the European Parliament [1974] ECR 177 and in its judgment of 15 June 1976 in Case 1/76 Ute Wack v Commission [1976] ECR 1017. It is generally acknowledged that the purpose of such time-limits is, in the interests of legal certainty and the avoidance of excessive litigation, to bar a person's right of action upon the expiry of a certain period from the time when he learned or the act adversely affecting him. For that reason the Court also held in the above-mentioned judgments that the time for an application to the Court begins to run only where the salary statement clearly shows the decision taken. That requirement, as the Court made clear, was fulfilled in those cases.

In this case, however, my view is that, contrary to the defendant's submission, the fact that no entry was made in the column headed “Expatriation Allowance” in the first salary statement sent to the applicant could not have constituted an express announcement of the administration's intention producing legal effects and possessing the characteristics of an “act adversely affecting him” within Article 90 (2) (cf also the Court's judgment of 20 November 1980 in Case 806/79 François Gerin Commission [1980] ECR 3515.

On this point particular regard must be had to the fact that before the applicant's first salary statement was sent to him his view that he was entitled to the expatriation allowance was confirmed by the officials competent in the matter, Mr Henrichs and Mr Hauser, whereas another official, Mr Chambaud, denied — again only orally — the applicant's right to the allowance. In view of such differing attitudes it can therefore on no account be said that the first salary slip, which did not set out the reasons on which it was based, had to be considered as a decision refusing the allowance.

Further, it is clear from the extensive correspondence which subsequently took place that the departments of the Commission themselves and the mediator who was called in did not regard the salary statement as a decision within the meaning of Article 90 (2) of the Staff Regulations. Thus, to cite but a few examples, it is apparent from the letter of 16 October 1979 sent by Mr Hannaert, the Head of the Administration and Personnel Division of the Joint Research Centre at Ispra, to Mr Valsesia, the Head of the Administrative Coordination Division in Brussels, that the case was to be submitted to the Staff Regulations Division of the Commission in Brussels for its opinion. In a note dated 14 November 1979 to Mr Valsesia, which was marked as approved by the Legal Department, Mr Rogalla, the Head of the Staff Regulations Division, expressed the view that Mr Garganese was not entitled to an expatriation allowance. What is more, however, the letters of 22 October 1979 and 22 January 1980 from Mr De Groóte, who was called in as mediator, to Mr Rogalla show that he, too, did not proceed on the basis that a definitive decision had already been taken. Finally, in a memorandum of 28 January 1980 to Mr Ellerkmann, Mr Sciuto said that at that date no decision had yet been taken, and likewise it clearly emerges from Mr Ellerkmann's letter of 23 February 1980 to the applicant via Mr Sciuto that the question was still to be considered within the Commission.

Further evidence that even the Commission did not at that time regard the salary slip as a decision refusing the allowance is provided by the reasoned letter of 23 June 1980 to the applicant, in which for the first time the Commission clearly and unequivocally refused payment of the expatriation allowance. If, as the Commission now maintains, that letter were merely a measure repeating the decision refusing the allowance which had already been taken before 11 October 1979, it would have been no more than right and just to refer to the decision of refusal already taken and at the same time to inform the applicant that his “complaint through official channels” had been submitted too late.

In view of the Commission's hesitant and indecisive attitude it was only natural that, in order to set in motion the periods prescribed by the Staff Regulations, the applicant should submit a formal request under Article 90 (1) of the Staff Regulations which he expressly described as such and which was dated 30 January 1980, to the appointing authority for a decision on his case. His request was received by the appointing authority on 6 February 1981. After receiving no reply within four months, on 1 July 1980, that is to say before he received the Commission's express decision rejecting his request, he rightly lodged a complaint under Article 90 (2) within the prescribed period against the implied decision rejecting his request. Since again no decision was taken on that complaint within the four-month period laid down by Article 90 (2), the applicant lodged an application to the Court within the prescribed period on 4 September 1980. His application must therefore be considered as admissible.

II — Substance

On the substance of the application the applicant submits that he was habitually resident in Luxembourg from 1962 until he entered the service in 1979 and that consequently he is entitled to the expatriation allowance under Article 4 (1) (b) of Annex VII to the Staff Regulations. The fact that he fulfilled his obligation to perform military service does not affect his position. Nevertheless, even if it is assumed that the twenty-three months spent in Italy in performance of his military service did interrupt his period of habitual residence, the fact still remains that for at least fifteen years before he entered the service he resided in a Member State other than that in which he was later to be employed.

The defendant, relying upon the wording of the provision in question, takes the contrary view that the applicant did not habitually reside in Luxembourg during the relevant ten-year period preceding his engagement at Ispra, that is to say from 3 September 1969 to 3 September 1979, because between 5 May 1970 and 15 April 1972 he performed his military service in Italy, the State in which he was later to be employed. He returned to his country of origin for that period and was able to feel “at home” with the result that even according to the meaning and purpose of the provision in question he is not entitled to an expatriation allowance.

In my view, the defendant's contention is unconvincing for the following reasons: as the Court of Justice has made clear in a consistent line of decisions (cf. judgment of 20 February 1975 in case 21/74 Jeanne Airola ν Commission [1975] ECR 221, judgment of 20 February 1975 in Case 37/74 Chantal van den Broeck ν Commission [1975] ECR 235, judgment of 16 October 1980 in Case 147/79 René Hochstrass ν Court of Justice [1980] ECR 3005 and judgment of 15 January 1981 in Case 1322/79 Gaetano Vutera ν Commission [1981] ECR 127), it follows from the general scheme of Article 4 of Annex VII to the Staff Regulations that the official's habitual residence before he entered the service constitutes the paramount consideration in determining his entitlement to an expatriation allowance. As the Court of Justice has pointed out, in particular in the Airola and Van den Broeck cases, the object of the expatriation allowance is to compensate officials for the extra expense and inconvenience of taking up employment with the Communities and being thereby obliged to change their residence.

On the other hand, as was also stated in the above-mentioned cases, the nationality of officials is only a secondary consideration and serves only to define the effect of the length of their residence outside the territory within which they perform their duties. That means that under Article 4 (1) (b), in order to receive an expatriation allowance, officials who are nationals of the State in whose territory they perform their duties must have habitually resided outside the European territory of that State during the period of at least ten years ending at the date of their entering the service for reasons other than the performance of duties in the service of a State or of an international organization. If that is the case and if as a result of entering the service they are obliged to change their residence, they are entitled to an expatriation allowance.

In this case it is common ground that from 1962 until 1970 the applicant resided in Luxembourg, that is to say, in a Member State other than that in which he is employed in the service and of which he is a national, and that after performing his military service, which is an obligation pertaining to his status as a national, he returned immediately to his original place of residence, where he remained until he entered the service. Consequently, the sole point at issue is whether the fact that the twenty-three months spent by the applicant in the performance of his military service within the period referred to by Article 4 (1) (b) can be a reason for refusing to pay him the expatriation allowance, to which he would have been entitled if he had not fulfilled his military obligations.

Such a view must however be rejected on the basis of the general consideration, that, as is common knowledge, conscription for military service depends on a certain age-limit and that therefore the individual has in principle no choice as to when he will perform it. The defendant's interpretation would lead to a position where the applicant would be treated differently as regards the expatriation allowance depending on whether the period of military service, which he was obliged to perform regardless of his own wishes, lay outside or within the ten-year period in question. That surely cannot have been intended.

Moreover, the applicant cannot be criticized for failing to take advantage of a possible dispensation from military service for Italian nationals living abroad. Even if there such a possibility of exemption, it would not alter the fact that the applicant fulfilled his obligation to perform military service, even if he did so only to avoid the adverse consequences of a failure to fulfil that obligation which might ensue if he were later to return to Italy.

Finally, it is clear from Article 42 of the Staff Regulations that an official who is called up to perform military service prescribed by law must suffer no disadvantages relating to his employment other than the loss of his salary. As the applicant correctly maintains, that must also hold true for a person who has discharged his military service obligation before entering the service.

Also unconvincing in that regard is the defendant's argument that the applicant is not entitled to an expatriation allowance because during the ten-year period he gave up his habitual residence in Luxembourg and lived in his native country amongst his fellow countrymen whilst performing his military service. It is self-evident — without the need for a definition of the term “habitually resident” contained in the provision in question — that a person who leaves his place of residence for a limited time in order to perform compulsory military service and afterwards immediately returns to it does not give up his original habitual residence, around which his life centres. Consequently, even if, contrary to the view which I have expressed, account were to be taken only of the period of ten years immediately preceding his entering the service, his performance of compulsory military service cannot cast doubt on the fact that throughout that period he retained his habitual residence in the Grand Duchy of Luxembourg.

In particular, support for a contrary view cannot, as the defendant suggests, be found in the Court's judgment of 15 February 1976 in Case 42/75 Jean Louis Deivaux ν Commission [1976] ECR 167. In that case, during the ten-year period preceding his entering the service of the Commission in Brussels the applicant, a Belgian national, resided initially in Belgium, the country in which be was later to be employed, and then performed his military service in the Belgian army, first in Germany and later in France with Shape. In view of those facts the Court held that during his military service the applicant could not be regarded as having been resident outside Belgium, the country in which he was domiciled before this service. Consequently, for the term of military service spent outside Belgium, he was treated as if he had performed that service and retained his residence in Belgium.

However, in the present case it must be taken into account that, in contrast to the above-mentioned case, during the ten-year period before he took up employment the applicant was not resident in the country in which he was subsequently to be employed. Further, he was not resident in the country in whose armed forces he served. Moreover, quite apart from that this case does not concern the question how a national of a particular State is to be treated for the purpose of residence if he performs military service for his native country in another State. If the case cited above can provide any assistance at all in this case, it is only to the effect that in principle the performance of military service leaves residence unaffected.

Consequently, since it is established that the applicant was resident outside the State in whose territory he performs his duties during a period of more than ten years ending at the date of his entering the service and that he was obliged to change his residence as a result of entering the service, the application must be upheld.

Finally, there remains to be considered the applicant's claim for the payment of default interest. In that regard it should be observed that according to the case-law of the Court, where the withholding of an amount due is attributable to a mere mistake of law on the part of an institution in applying the Staff Regulations, default interest is in principle granted only from the date on which the person concerned submitted a complaint pursuant to Article 90 (2) of the Staff Regulations. However, in the present case, as we have seen, it is clear that the Commission, acting contrary to the promises made by its officials and seriously misconstruing the meaning and purpose of the provision in question, culpably delayed paying the expatriation allowance. For that reason I consider it justified that the applicant should be placed in the position in which be would have been if the allowance which must now be paid in arrear had been paid in accordance with the relevant provisions, that is to say in due time. That also includes interest from the various dates on which payment fell due. Since the rate of interest claimed by the applicant seems reasonable and the Commission has raised no objection in that regard, I have no hesitation in proposing that the applicant's claim should be upheld on this point too.

Consequently, the defendant is unsuccessful in all its submissions and must therefore be ordered, pursuant to Article 69 (2) of the Rules of Procedure, to pay the costs.

I therefore propose that the Court give judgment as follows on this case:

1.The Commission's decision of 23 June 1980 refusing to pay the expatriation allowance is annulled and the defendant is ordered to pay the expatriation allowance to the applicant as from 3 September 1979 in accordance with Article 4 (1) (b) of Annex VII to the Staff Regulations.

2.The defendant is ordered to pay default interest at 6 % per annum as from 3 September 1979 on the arrears of expatriation allowance, that interest to be calculated from the various dates on which payment fell due to the date of payment.

3.The defendant is ordered to pay the costs.

* Language of the case: German.