Official Journal of the European Union

EN

C series

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C/2025/3933

21.7.2025

(Case T-370/25)

(C/2025/3933)

Language of the case: French

Parties

Applicant: JL (represented by: S. Orlandi, lawyer)

Defendant: European Commission

Form of order sought

The applicant claims that the General Court should:

—annul the decision of the appointing authority not to apply the correction coefficient to calculate his remuneration in accordance with the third paragraph of Article 64 of the Staff Regulations, which is apparent from the first payslip drawn up following his posting to Luxembourg in October 2024;

—annul the decision, taken in the context of the update to the correction coefficients, to maintain the mechanism referred to in Article 64 of the Staff Regulations, in so far as it is apparent from his payslip, drawn up following the annual update of the correction coefficients, that a correction coefficient still does not apply to Luxembourg, his place of employment;

—order the European Commission to pay the costs.

Pleas in law and main arguments

In support of the action, the applicant relies on a single plea in law, which is divided into three parts.

1.First part, alleging infringement of the principle of equal treatment and illegality of paragraph 3 of Article 64 of the Staff Regulations and Articles 3(5) and 1(2) of Annex XI to the Staff Regulations of Officials of the European Union (‘the Staff Regulations’).

The Staff Regulations provides for correction coefficients (Article 64 of the Staff Regulations) to ensure equivalent purchasing power between officials, regardless of their place of employment. However, no correction coefficient is applied in Belgium or Luxembourg, since those places of employment are considered as ‘principal and original seats’.

Eurostat calculations show, however, a persistent and significant imbalance in purchasing power in Luxembourg as compared to Brussels. The correction coefficients calculated, were they to be applied to Luxembourg as in any other place of employment, would be constantly above 100 % (for example 120.8 % for 2020 and 119.6 % for 2024), going significantly beyond the 5 % threshold required for the application of a coefficient.

The exclusion of Luxembourg from that mechanism confuses the objective of general adjustments to remuneration (Article 65, based on a common index – ‘Joint Belgium-Luxembourg Index of consumer prices’ – for Belgium and Luxembourg) and that of geographic correction (Article 64), which leads to unjustified unequal treatment.

The Joint Index is not appropriate to ensure equal purchasing power because it does not reflect the differences between Luxembourg and Brussels and is significantly influenced by data from Brussels because of the distribution of staff (around 80.4 % in Brussels compared to 19.6 % in Luxembourg). That system masks the local disparities by grouping together the data for Luxembourg with those for Brussels.

The applicant argues that the justifications put forward by the Commission, such as the possibility to live in bordering countries or the fact of not taking into consideration ‘out of area expenditures’ in the statistical method are unfounded. Those ‘specifics’ are common to a number of other places of employment and cannot justify the absence of a correction coefficient for Luxembourg.

Maintaining that exclusion, despite the objective data, leads to a clear infringement of equal treatment. The legislature’s discretion, although broad, is not absolute and must respect the general principles of EU law, in particular equal treatment.

2.Second part, concerning the free movement of workers

The lack of a compensatory mechanism in Luxembourg discourages the recruitment and transfer of officials to that place of employment, creating an obstacle to the free movement of workers.

The issue of the attractiveness of Luxembourg is substantiated by the Luxembourg Government and the EU institutions based in Luxembourg (such as the Court of Justice and the Court of Auditors), which have confirmed the difference in the cost of living and the need for a correction coefficient.

Other international organisations, such as EFTA and the NSPA (NATO), apply a correction coefficient for their staff based in Luxembourg, often relying on Eurostat data, which demonstrates the incoherence of the Commission’s position.

The case-law of the Court of Justice of the European Union has established that considerations of an administrative nature or possible ‘advantages’ cannot justify a derogation from the rules of EU law if that would undermine the fundamental freedoms, including free movement.

3.Third part, alleging failure by the rule-maker to fulfil its obligation to reassess the relevance of the rules and failure to state the grounds

The European Commission is required to check periodically that the rules in force are still appropriate and amend them where they have ceased to have any justification or are no longer appropriate in the new context.

The fact that the Commission continued not to allow the correction coefficient for Luxembourg for the 2024 annual update, despite the persistent Eurostat statistical data, demonstrates an imbalance in purchasing power for almost 20 years and constitutes an infringement of that obligation.

The application of a 5 % threshold to trigger correction coefficients is not applied uniformly because places with small differences benefit from adjustments, whereas Luxembourg does not have any despite significant fluctuations.

The appointing authority failed to fulfil its obligation to state reasons by limiting itself to general assertions on the Joint Index, without setting out concrete factors justifying the continued exclusion of Luxembourg, despite the new statistical data and the recognition by the Commission of the need for an annual assessment as to whether the system is relevant.

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ELI: http://data.europa.eu/eli/C/2025/3933/oj

ISSN 1977-091X (electronic edition)

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