Dumitrescu and Schwarz v Commission (Civil service - Flat-rate payment of travel expenses - Judgment) [2024] EUECJ C-567/22P (18 April 2024)

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(Appeal – Civil service – Second subparagraph of Article 8(2) of Annex VII to the Staff Regulations of Officials of the European Union – Flat-rate payment of travel expenses from the place of employment to the place of origin – Regulation (EU, Euratom) No 1023/2013 – New calculation rules – Officials whose place of origin is outside the territories of the Member States as well as outside the countries and territories listed in Annex II to the FEU Treaty and the territories of the Member States of the European Free Trade Association (EFTA) – Principle of equal treatment)

FOUR APPEALS under Article 56 of the Statute of the Court of Justice of the European Union, brought on 25 August 2022,

Vasile Dumitrescu, official of the European Commission, residing in Berchem-Sainte-Agathe (Belgium),

Guido Schwarz, official of the European Commission, residing in Brussels (Belgium) (C‑567/22 P),

European Commission, represented by T.S. Bohr and G. Gattinara, acting as Agents,

Court of Justice of the European Union, represented by J. Inghelram and A. Ysebaert, acting as Agents,

European Parliament, represented by E. Taneva and J. Van Pottelberge, acting as Agents,

Council of the European Union, represented by M. Bauer, X. Chamodraka and T. Verdi, acting as Agents,

composed of C. Lycourgos, President of the Chamber, O. Spineanu-Matei (Rapporteur), J.‑C. Bonichot, S. Rodin and L.S. Rossi, Judges,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

1 By their respective appeals, Mr Vasile Dumitrescu and Mr Guido Schwarz (C‑567/22 P), YT and YU (C‑568/22 P), YV (C‑569/22 P) and ZA (C‑570/22 P) (together, ‘the appellants’) seek to have set aside, respectively, the judgments of the General Court of the European Union of 15 June 2022, Dumitrescu and Schwarz v Commission (T‑531/16, ‘the judgment under appeal in Case C‑567/22 P’, EU:T:2022:362); of 15 June 2022, YT and YU v Commission (T‑532/16, ‘the judgment under appeal in Case C‑568/22 P’, EU:T:2022:363); of 15 June 2022, YV and Others v Commission (T‑533/16, ‘the judgment under appeal in Case C‑569/22 P’, EU:T:2022:364); and of 15 June 2022, YY and ZA v Court of Justice of the European Union (T‑545/16, ‘the judgment under appeal in Case C‑570/22 P’, EU:T:2022:366) (together, ‘the judgments under appeal’), by which the General Court dismissed their actions seeking the annulment of the decisions of the European Commission (T‑531/16 to T‑533/16) and of the Court of Justice of the European Union (T‑545/16) to reduce or withdraw, as from 1 January 2014, the reimbursement of annual travel expenses, in order for the appellants to maintain a relationship with their place of origin.

2 Annex VII to the Staff Regulations of Officials of the European Union, in the version prior to the entry into force of Regulation (EU, Euratom) No 1023/2013 of the European Parliament and of the Council of 22 October 2013 amending the Staff Regulations of Officials of the European Union and the Conditions of Employment of Other Servants of the European Union (OJ 2013 L 287, p. 15) (‘the former Staff Regulations’), entitled ‘Remuneration and reimbursement of expenses’, included Section 3, entitled ‘Reimbursement of expenses’, subsection C of which, entitled ‘Travel expenses’, comprised Articles 7 and 8 of that annex. Article 7(1) provided that an official was entitled to reimbursement of travel expenses for himself or herself, his or her spouse and his or her dependants actually living in his or her household, in various circumstances. Under Article 7(3):

‘An official’s place of origin shall be determined when he takes up his appointment, account being taken of where he was recruited or the centre of his interests. The place of origin as so determined may by special decision of the appointing authority be changed while the official is in service or when he leaves the service. While he is in the service, however, such decision shall be taken only exceptionally and on production by the official of appropriate supporting evidence.

‘1. Officials shall be entitled to be paid in each calendar year a sum equivalent to the cost of travel from the place of employment to the place of origin as defined in Article 7 for themselves and, if they are entitled to the household allowance, for the spouse and dependants within the meaning of Article 2.

2. The flat-rate payment shall be based on an allowance per kilometre of distance between the official’s place of employment and place of recruitment or origin;

4. The preceding provisions shall apply to officials whose place of employment is within the territories of the Member States. …

4 The Staff Regulations of Officials of the European Union, in the version resulting from Regulation No 1023/2013 (‘the Staff Regulations’), have been applicable, subject to some of their provisions not concerned by the present joined cases, since 1 January 2014, in accordance with Article 3(2) of that regulation.

‘(2) … it is necessary to ensure a framework for attracting, recruiting and maintaining highly qualified and multilingual staff, drawn on the broadest possible geographical basis from among citizens of the Member States, and with due regard to gender balance, who are independent and who adhere to the highest professional standards, and to enable such staff to carry out their duties as effectively and efficiently as possible. In that respect, it is necessary to overcome the current difficulties experienced by the institutions in recruiting officials or staff from certain Member States.

(12) In its conclusions of 8 February 2013 on the multiannual financial framework, the European Council pointed out that the need to consolidate public finances in the short, medium and long term requires a particular effort by every public administration and its staff to improve efficiency and effectiveness and to adjust to the changing economic context. That call reiterated in fact the objective of the 2011 Commission proposal for amendment of the Staff Regulations of Officials [of the European Union] and the Conditions of Employment of Other Servants of the European Union, which strove to ensure cost-efficiency and acknowledged that challenges currently faced by the European Union require a particular effort by each and every public administration and each and every member of its staff to improve efficiency and to adjust to the changing economic and social context in Europe. The European Council called moreover, as part of the reform of the Staff Regulations, for the adjustment of remuneration and pensions of all staff of the Union institutions through the method to be suspended for two years and for the new solidarity levy to be reintroduced as part of the reform of the salary method.

(24) The rules on travelling time and annual payment of travel expenses between the place of employment and the place of origin should be modernised, rationalised and linked with expatriate status in order to make their application simpler and more transparent. In particular, the annual travelling time should be replaced by home leave and limited to a maximum of two and a half days.’

‘The Court of Justice of the European Union shall have jurisdiction in any dispute between the Union and any person to whom these Staff Regulations apply regarding the legality of an act affecting such person adversely within the meaning of Article 90(2). In disputes of a financial character the Court of Justice shall have unlimited jurisdiction.’

7 Annex VII to the Staff Regulations is entitled ‘Remuneration and reimbursement of expenses’. That annex includes Section 3, entitled ‘Reimbursement of expenses’, subsection C of which, entitled ‘Travel expenses’, comprises Articles 7 and 8 of that annex. Article 7(1) provides that an official is to be entitled to a flat-rate payment corresponding to the cost of travel for himself or herself, his or her spouse and his or her dependants actually living in his or her household, in various circumstances. Under Article 7(4):

‘An official’s place of origin shall be determined when he takes up his appointment, account being taken in principle of where he was recruited or, upon express and duly reasoned request, the centre of his interests. The place of origin as so determined may by special decision of the appointing authority be changed while the official is in service or when he leaves the service. While he is in the service, however, such decision shall be taken only exceptionally and on production by the official of appropriate supporting evidence.

‘1. Officials entitled to the expatriation or foreign residence allowance shall be entitled, within the limit set out 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 this annex] for themselves and, if they are entitled to the household allowance, for the spouse and dependants within the meaning of Article 2 [of this 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 this annex] is 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] and 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 whose nationality he holds. …

4. Paragraphs 1, 2 and 3 of this Article shall apply to officials whose place of employment is within the territories of the Member States. …

9 The background to the disputes, as set out in the judgments under appeal, may be summarised as follows.

10 The appellants are officials of an EU institution, namely either the Commission (Cases C‑567/22 P to C‑569/22 P) or the Court of Justice of the European Union (Case C‑570/22 P). They all have a place of employment within the territories of the Member States and a place of origin outside the territories of the Member States as well as outside the countries and territories listed in Annex II to the FEU Treaty and the territories of the EFTA States.

11 Following the entry into force of Regulation No 1023/2013, the institution that employs each of them determined the amount due to them in respect of the flat-rate payment of travel expenses from the place of employment to the place of origin under the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations. Under that provision, that payment now corresponds to an allowance per kilometre of geographical distance between the official’s place of employment and the capital city of the Member State of whose nationality he or she holds, on the basis of a kilometre scale.

12 The method for calculating that allowance resulting from that provision entailed for each of the appellants a significant reduction in relation to the amount to which they were entitled under Article 8 of Annex VII to the former Staff Regulations, going so far as not to make a flat-rate payment for the officials whose place of employment was less than 201 km from the capital city of the Member State whose nationality they hold.

13 After lodging an unsuccessful complaint against the decisions determining for the first time the amount of the flat-rate payment of travel expenses to which they were entitled under Article 8 of Annex VII to the Staff Regulations, the appellants brought actions for annulment of those decisions before the Civil Service Tribunal, those actions having then been transferred to the General Court.

14 In the action brought in Case T‑531/16, the appellants concerned submitted five heads of claim, by which they claimed that the General Court should, in essence:

– annul the decision by which the Commission applied the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations for the first time in respect of them;

– annul any decision adopted by the Commission in respect of them pursuant to that provision from 2015 onwards;

– order the Commission to reimburse their annual travel expenses to their place of origin covering their actual expenses and on the basis of Article 8 of Annex VII to the former Staff Regulations, together with default interest; and

15 In the actions for annulment brought in Cases T‑532/16, T‑533/16 and T‑545/16, the appellants concerned submitted three heads of claim, by which they claimed that the General Court should, in essence:

– annul the decision by which the defendant institution in each of those cases, namely, the Commission and the Court of Justice of the European Union respectively, applied the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations for the first time in respect of them;

– annul the decisions by which that institution rejected their complaints; and

16 In each of the cases that gave rise to the judgments under appeal, the General Court, first of all, rejected the heads of claim seeking the annulment of the decisions rejecting the complaints, after finding that those decisions had no independent content.

17 In addition, by the judgment under appeal in Case C‑567/22 P, the General Court dismissed as inadmissible, first, the second head of claim, seeking the annulment of future Commission decisions, in the light of the hypothetical nature of those decisions, being acts not yet adopted, and, secondly, the fourth head of claim, in so far as it sought an order that that institution pay annual travel expenses on the basis of the provisions of the former Staff Regulations, on the ground that it was not for it to issue injunctions to the administration in the context of the review of legality based on Article 91 of the Staff Regulations.

18 Next, the General Court examined, in each of the cases giving rise to the judgments under appeal, the pleas put forward by the appellants in support of the first head of claim, seeking the annulment of the decisions by which the defendant institutions concerned had applied the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations for the first time in respect of the appellants, on account, in essence, of the illegality of that provision.

19 Those pleas alleged, first, infringement of Article 45 TFEU, secondly, in Case T‑531/16, failure to observe the general principle of equality of treatment, thirdly, infringement of the purpose of Article 8 of Annex VII to the Staff Regulations, combined in Case T‑531/16 with the general principle of the right of an official to retain personal ties with the place where that official has his or her principal interests and with Article 7 of the Charter of Fundamental Rights of the European Union (‘the Charter’), and, fourthly, failure to observe the principles of the protection of legitimate expectations and acquired rights. Since the General Court rejected all those pleas, it rejected that first head of claim.

20 Consequently, in the judgment under appeal in Case C‑567/22 P, the General Court also rejected the claim of the appellants concerned that the Commission should be ordered to reimburse their annual travel expenses to their place of origin on the basis of their actual expenses.

21 Accordingly, the General Court dismissed the actions in Cases T‑531/16 to T‑533/16 and T‑545/16 in their entirety.

22 Lastly, the General Court ordered the appellants to pay the costs in each of those cases.

23 By their appeals in Cases C‑567/22 P to C‑569/22 P, the appellants concerned claim that the Court of Justice should:

– uphold in their entirety the actions for annulment that they brought before the General Court; and

24 The Commission contends that the Court should dismiss the appeals in those cases and order the appellants concerned to pay the costs.

25 The European Parliament and the Council of the European Union, which, as interveners at first instance, have lodged a response in accordance with Article 172 of the Rules of Procedure of the Court of Justice, also contend that the appeals in those cases should be dismissed and the appellants concerned ordered to pay the costs.

26 By his appeal in Case C‑570/22 P, the appellant concerned claims that the Court of Justice should:

– uphold in its entirety the action for annulment that he brought before the General Court; and

– order the Court of Justice of the European Union to pay the costs in both sets of proceedings.

27 The Court of Justice of the European Union contends that the appeal in that case should be dismissed and that the appellant concerned should be ordered to pay the costs.

28 The Parliament and the Council also contend that the appeal in that case should be dismissed and that the appellant concerned should be ordered to pay the costs.

29 Pursuant to Article 54(2) of the Rules of Procedure, the Vice-President of the Court decided on 24 May 2023 to join Cases C‑567/22 P to C‑570/22 P for the purposes of any oral part of the procedure and the judgment.

30 In support of their appeal, the appellants in Case C‑567/22 P put forward three grounds of appeal, alleging, first, infringement of Article 45 TFEU, failure to state reasons, an error of legal characterisation and distortion of the evidence in the file; secondly, infringement of the purpose of Article 8 of Annex VII to the Staff Regulations, failure to observe the general principle relating to the right of an official to retain personal ties with the place where that official has his or her principal interests, infringement of Articles 7 and 8 of the Charter and distortion of the evidence in the file; and, thirdly, failure to observe the principle of equal treatment.

31 In support of their appeals, the appellants in Cases C‑568/22 P to C‑570/22 P put forward two grounds of appeal, the first being identical to the first ground of appeal in Case C‑567/22 P and the second alleging infringement of the purpose of Article 8 of Annex VII to the Staff Regulations and failure to observe the principle of proportionality.

32 It should be noted at the outset that, on the one hand, the second, third and, in part, fourth heads of claim of the appellants concerned in Case T‑531/16 and, on the other hand, the second head of claim of the appellants concerned in Cases T‑532/16, T‑533/16 and T‑545/16 were rejected by the General Court, respectively, in paragraphs 26 to 28 of the judgment under appeal in Case C‑567/22 P, in paragraph 22 of the judgment under appeal in Case C‑568/22 P, in paragraph 23 of the judgment under appeal in Case C‑569/22 P and in paragraph 22 of the judgment under appeal in Case C‑570/22 P, on the basis of the findings summarised in paragraphs 16 and 17 above.

33 Although the appellants seek to have the judgments under appeal set aside also in so far as those heads of claim were rejected, it should be noted that those findings are not criticised as such in the context of the appeals and are not covered by any grounds submitted in support of those appeals.

34 In that regard, it should be recalled that, in accordance with Article 168(1)(d) of the Rules of Procedure, an appeal must contain the pleas in law and arguments relied on and a summary of those pleas in law.

35 In accordance with the case-law, the legal arguments supporting the application to have set aside the contested paragraphs of the judgment under appeal must be indicated precisely, failing which they will be inadmissible (see, to that effect, judgment of 23 November 2021, Council v Hamas, C‑833/19 P, EU:C:2021:950, paragraph 50 and the case-law cited).

36 It follows that the appeal in Case C‑567/22 P must be dismissed as inadmissible in so far as it seeks to have set aside the judgment under appeal in that case as regards the rejection of the second and third heads of claim in the action in Case T‑531/16 and the fourth head of claim in that action to the extent that it sought an order that the Commission pay annual travel expenses on the basis of the provisions of the former Staff Regulations, since nothing has been indicated to support the appeal in that regard.

37 On the same grounds, the appeals in Cases C‑568/22 P to C‑570/22 P must be dismissed as inadmissible in so far as they seek to have set aside the judgments under appeal in those cases as regards the rejection of the second head of claim in the actions in Cases T‑532/16, T‑533/16 and T‑545/16.

38 Consequently, it is necessary to examine the substance of the appeals in so far as they seek to have the judgments under appeal set aside as regards the rejection of the first head of claim, by which each of the appellants sought, in so far as it concerned him or her, annulment of the decision by which the institution of which the appellant in question is an official had applied the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations for the first time in respect of him or her.

39 The first ground of each of the appeals comprises, in essence, three parts, alleging, first, infringement of Article 45 TFEU, secondly, failure to state reasons and, thirdly, distortion of the evidence in the file and an error of legal characterisation.

40 By the first part, the appellants submit, primarily, that the General Court examined the plea relating to the infringement of Article 45 TFEU, put forward in support of their actions for annulment, only as regards their argument that the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations entails discrimination on grounds of nationality, even though they had argued that that provision also constitutes an obstacle to the free movement of workers and that the examination of their plea from that angle would have required a specific analysis. As a result, the General Court failed to respond to the plea submitted to it and thus failed to fulfil its obligation to state reasons.

41 By a complaint put forward in the alternative in the context of the first part of the first ground of appeal, the appellants claim, in essence, that, in any event, the General Court erred in law in validating the criterion of nationality contained in the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations without having examined whether that criterion was admissible and proportionate in the light of the purpose of that provision.

42 By the second part, the appellants submit that the General Court made an ‘error of reasoning’ by incorrectly referring to paragraph 51 of the judgment of 25 March 2021, Álvarez y Bejarano and Others v Commission (C‑517/19 P and C‑518/19 P, EU:C:2021:240).

43 By the third part, the appellants complain that the General Court distorted evidence in the file and made two errors of legal characterisation, the first by classifying as ‘borderline cases’ those of 756 officials or other members of staff whose place of origin was outside the territories of the Member States on 1 January 2015 and the second as regards the consequences of the use of the criterion relating to nationality in the context of the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations, by classifying as ‘fortuitous problems’ the substantial, or almost total, reduction in the payment of travel expenses to those officials.

The complaint in the first part of the first ground of appeal, alleging failure to state reasons

44 In the first part of their first ground of appeal, the appellants put forward, primarily, a complaint alleging a failure to state reasons, which must be examined first. By that complaint, they submit that the General Court failed to rule on their argument relating to the existence of an obstacle to the free movement of workers, examining their plea alleging infringement of Article 45 TFEU only from the perspective of their argument relating to the existence of discrimination on grounds of nationality.

46 It must be pointed out that the duty to state reasons in decisions is an essential procedural requirement which must be distinguished from the question whether the reasoning is well founded, which is concerned with the substantive legality of the measure at issue. The reasoning of a decision consists in a formal statement of the grounds on which that decision is based. If those grounds are vitiated by errors, the latter will vitiate the substantive legality of the decision, but not the statement of reasons in it, which may be adequate even though it sets out reasons which are incorrect (judgments of 10 July 2008, Bertelsmann and Sony Corporation of America v Impala, C‑413/06 P, EU:C:2008:392, paragraph 181 and the case-law cited, and of 24 November 2022, Thunus and Others v EIB, C‑91/21 P, EU:C:2022:928, paragraph 90 and the case-law cited).

47 In the present cases, in its examination of the plea alleging infringement of Article 45 TFEU that was put forward in each of the actions for annulment brought before it, the General Court held that ‘in so far as the applicants claim that [the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations] constitutes an obstacle in that it discourages them from exercising their freedom of movement in order to accept employment in the EU civil service, it must be held that that argument is indissociable from that relating to the allegedly discriminatory nature of [that provision] in so far as it establishes a difference in treatment based on nationality between workers as regards their conditions of work’.

48 By those findings, the General Court expressly took into account the appellants’ arguments relating to the existence of an obstacle, but carried out an analysis that led it to examine it in conjunction with the arguments by which the appellants alleged failure to observe the principle of non-discrimination.

49 Consequently, the complaint in the first part of the first ground of appeal alleging failure to state reasons must be rejected as unfounded.

The complaint in the first part of the first ground of appeal, alleging failure to observe the principle of non-discrimination on grounds of nationality

50 By the complaint submitted in the alternative in the first part of their first ground of appeal, which it is appropriate to examine next, the appellants submit, in essence, that the General Court erred in law in validating the criterion relating to nationality set out in the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations by reference to the objective of Regulation No 1023/2013, on the basis of reasons relating to the budgetary, administrative and staff policy considerations that it deemed to be legitimate, without ascertaining whether that criterion was admissible and proportionate in the light of the aim of Article 8 of that annex, namely to grant benefits to enable the officials concerned and their dependants to travel at least once a year to their place of origin.

51 That complaint concerns more specifically paragraphs 72 to 78 of the judgment under appeal in Case C‑567/22 P, paragraphs 38 to 41 and 57 to 59 of the judgment under appeal in Case C‑568/22 P, paragraphs 39 to 42 and 62 to 64 of the judgment under appeal in Case C‑569/22 P and paragraphs 38 to 41 and 60 to 62 of the judgment under appeal in Case C‑570/22 P.

52 In that regard, the appellants submit, in essence, that the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations involves direct discrimination on grounds of nationality and that the General Court failed to observe the principle of non-discrimination by finding that the grounds that it identified as being those that led to the adoption of that provision are legitimate, without assessing either the proportionality of that provision or the adequacy of the criterion based on nationality contained therein in relation to the objective pursued by Article 8 of that annex.

53 According to the appellants, the General Court did not examine whether that criterion is appropriate or adequate in the light of the possibility, for the officials concerned, to travel at least once a year to their place of origin in order to maintain family, social and cultural ties there, in accordance with the relevant general principle of the EU civil service in that regard.

54 The appellants in Case C‑568/22 P claim that, although the place of origin for both of them has been determined as being Buenos Aires (Argentina), which is more than 11 000 km from Brussels (Belgium), this being their place of employment, they received a different amount as payment of travel expenses, calculated by reference to the distance between Brussels and Rome (Italy) or Madrid (Spain), which are the capitals of the Member States of which they are, respectively, nationals, that distance corresponding to less than 15% of the distance separating their place of employment from their place of origin. The appellants in Case C‑567/22 P illustrate the consequences of applying the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations by observing that another appellant, whose place of origin has also been determined as being Buenos Aires, and whose place of employment is Luxembourg (Luxembourg), has the reimbursement to which he is entitled calculated by reference to the distance between Luxembourg and Brussels, the capital of the Member State whose nationality he holds, and does not receive any amount by way of flat-rate payment of travel expenses, since the latter distance is less than 201 km.

55 The appellants also submit that the EU legislature had several options for achieving the objective of budgetary streamlining taken into consideration by the General Court without disregarding the purpose of Article 8 or introducing discrimination on grounds of nationality between the officials concerned, for example by using as a reference point for calculating the payment of travel expenses the point of the journey to the place of origin situated at the external border of the European Union, by setting a ceiling or by reducing the amount of the benefit.

57 In particular, the Commission submits that the General Court correctly held that the criterion of nationality of the official was adequate, since, in paragraphs 72 and 73 of the judgment of 25 March 2021, Álvarez y Bejarano and Others v Commission (C‑517/19 P and C‑518/19 P, EU:C:2021:240), the Court of Justice accepted its relevance in particular in the context of Article 8 of Annex VII to the Staff Regulations. Furthermore, the Commission, the Parliament and the Council submit that the fact that an official’s place of origin is in a third country is an objective factor capable of justifying the adoption of a specific rule in that regard, that factor being the sole cause of the difference in reimbursement, to the exclusion of the nationality of the officials concerned, which is merely a secondary criterion.

58 The Parliament also submits that the General Court correctly took into consideration the fact that the criterion of nationality is objective and capable of allowing a simple, transparent and non-discriminatory application of Article 8 of Annex VII to the Staff Regulations to officials whose place of origin is outside the territories of the Member States.

59 In addition, the Council maintains that nationality is a criterion of differentiation that is commonly accepted in the law governing the EU civil service, on the basis of a presumption that a person’s nationality constitutes a strong indication of the existence of multiple and close ties between that person and the country whose nationality he or she holds, which would preclude the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations from being regarded as inherently discriminatory.

60 It should be noted that, after finding that it was appropriate to examine the appellants’ arguments relating to the failure to observe the principle of non-discrimination on grounds of nationality in the context of the plea alleging infringement of Article 45 TFEU, the General Court held, in essence, that the appellants’ argument that the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations constituted an obstacle was indissociable from their argument relating to the existence of a difference in treatment on grounds of nationality. As regards that line of argument, it noted, in essence, that the appellants claimed that officials with the same place of employment within the territories of the Member States and the same place of origin outside the European Union should receive the same amount in respect of the flat-rate payment of travel expenses, even if they have different nationalities.

61 In that regard, the General Court found that, under the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations, the amount of that payment for the officials concerned is actually determined on the basis of their nationality.

62 However, first, it asserted that that provision does not concern entitlement to that payment, but concerns only the method of calculating that amount, and found that the EU legislature must be afforded a broad discretion in that regard.

63 Secondly, it stated, in essence, that the EU legislature may resort to categorisation, including, where appropriate, the choice of a criterion based on nationality, provided that that categorisation is not discriminatory in essence in the light of the objective that it pursues. In the present cases, the choice of such a criterion is based on legitimate objectives, namely the need to modernise and streamline the rules on the payment of travel expenses, in order to make their application simpler and more transparent, and the search for cost-effectiveness in a socio-economic context in Europe requiring public finances to be consolidated. Furthermore, the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations is proportionate to the objective pursued by the legislature, related to those legitimate grounds of modernisation, streamlining and optimisation of cost-effectiveness. In an area in which the legislature has broad discretion and where, therefore, the legality of a measure can be adversely affected only if the measure is manifestly inappropriate having regard to the objective it pursues, the legislature adopted an objective criterion that is by nature a simple, transparent criterion, the application of which makes it possible to make savings.

64 As a preliminary point, it should be noted that, in their actions before the General Court, the appellants did not dispute the very fact that, by Regulation No 1023/2013, the EU legislature had amended the method of calculating the flat-rate payment of travel expenses. In that regard, it must be borne in mind that the legal link between an official and the administration is based upon the Staff Regulations and not upon a contract. Thus, the rights and obligations of officials, as well as those of members of the contract staff that derive from the provisions of the Staff Regulations which are applicable to them by analogy, such as Article 8 of Annex VII to the Staff Regulations, may, subject to compliance with the requirements of EU law, be altered at any time by the legislature (see, to that effect, judgment of 25 March 2021, Álvarez y Bejarano and Others v Commission, C‑517/19 P and C‑518/19 P, EU:C:2021:240, paragraphs 49 and 50 and the case-law cited).

65 One of those requirements is the principle of equal treatment, enshrined in Article 20 of the Charter (judgment of 25 March 2021, Álvarez y Bejarano and Others v Commission, C‑517/19 P and C‑518/19 P, EU:C:2021:240, paragraph 51 and the case-law cited).

66 In that regard, it should be recalled that the principle of equal treatment is a general principle of EU law of which the principle of non-discrimination laid down in Article 21(1) of the Charter is a specific expression (judgment of 14 July 2022, Commission v VW and Others, C‑116/21 P to C‑118/21 P, C‑138/21 P and C‑139/21 P, EU:C:2022:557, paragraph 140 and the case-law cited).

67 The principle of equal treatment requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (judgment of 25 March 2021, Álvarez y Bejarano and Others v Commission, C‑517/19 P and C‑518/19 P, EU:C:2021:240, paragraph 52 and the case-law cited).

68 In order to be able to determine whether or not there is a breach of that principle, it is necessary to take into account, inter alia, the subject matter and purpose of the provision which allegedly breaches that principle (judgment of 25 March 2021, Álvarez y Bejarano and Others v Commission, C‑517/19 P and C‑518/19 P, EU:C:2021:240, paragraph 65 and the case-law cited).

69 Furthermore, when provisions of the Staff Regulations such as those at issue in this instance are involved, and in the light of the broad discretion which the EU legislature enjoys in that regard, there is a breach of the principle of equal treatment only where the legislature makes a distinction which is arbitrary or manifestly inappropriate in relation to the objective pursued (judgment of 25 March 2021, Álvarez y Bejarano and Others v Commission, C‑517/19 P and C‑518/19 P, EU:C:2021:240, paragraph 53 and the case-law cited).

70 In the present cases, the purpose of Article 8 of Annex VII to the Staff Regulations, in conjunction with Article 7 of Annex V thereto, relating to home leave, the duration of which is additional to that of annual leave, is to grant a benefit enabling an official and his or her dependants to visit, at least once a year, his or her place of origin, in order to maintain family, social and cultural ties there (judgment of 25 March 2021, Álvarez y Bejarano and Others v Commission, C‑517/19 P and C‑518/19 P, EU:C:2021:240, paragraph 66).

71 By granting that benefit, Article 8 contributes to the implementation, in respect of the officials concerned, of the general principle of law governing the EU civil service that it must be possible for an official to retain personal links with the place where his or her principal interests are situated, notwithstanding his or her entry into the service and the distance between that place and the place of employment (see, to that effect, judgment of 2 May 1985, De Angelis v Commission, 144/84, EU:C:1985:171, paragraph 13).

72 To that end, Article 8(1) provides that all officials whose place of origin is different from the place of employment and who are entitled to an expatriation or foreign residence allowance are to be granted a financial benefit consisting in the flat-rate payment of annual travel expenses from the place of employment to the place of origin, irrespective of the latter’s location.

73 Article 8(2) lays down the methods for calculating that financial benefit. To that end, that provision provides, in its first subparagraph, that that flat-rate payment is established on the basis of the geographical distance between the official’s place of employment and his or her place of origin, while stating, in the second subparagraph, that, where the place of origin is outside the territories of the Member States as well as outside the countries and territories listed in Annex II to the FEU Treaty and the territories of the EFTA States, that flat-rate payment is to be established on the basis of the geographical distance between the place of employment of the official concerned and the capital city of the Member State whose nationality he or she holds.

74 The difference in treatment alleged in the context of the present complaint concerns the officials whose place of origin is outside the European Union, depending on the Member State whose nationality they hold.

75 It must be held that, in the light of the objective of enabling personal ties to be maintained with the place where they have their principal interests, all officials entitled to an expatriation or foreign residence allowance are in a comparable situation.

76 In that regard, the present cases differ from those which gave rise to the judgment of 25 March 2021, Álvarez y Bejarano and Others v Commission (C‑517/19 P and C‑518/19 P, EU:C:2021:240), since, as is apparent from paragraphs 68, 71 and 74 of that judgment, the difference in treatment at issue in those cases concerned two categories of officials who were not in comparable situations. Among the officials whose place of origin was different from the place of employment, one category included those who were entitled to an expatriation or foreign residence allowance and were therefore, in principle, regarded as being barely or not integrated into the society of the Member State of employment, and who, as a result, were in the greatest need of receiving reimbursement of travel expenses, whereas the other category was that made up of officials who were not entitled to such allowances, to the extent that they could be regarded as having a closer connection with their place of employment.

77 By contrast, the fact that, in the cases that gave rise to that judgment, that difference in treatment related to the entitlement to the flat-rate payment of travel expenses itself, whereas the difference in treatment alleged in the present cases concerns the method of calculating it, is irrelevant, since compliance with the principle of equal treatment is required in all cases.

78 As regards the use of a criterion of nationality, it is true that the Court has already held that it could constitute an objective element capable of affecting the grant of a financial benefit, in the present cases the foreign residence allowance, because such a criterion was, inter alia, directly related to the aim pursued by the grant of that benefit, namely to compensate for the disadvantages linked to the status of foreign national (see, to that effect, judgment of 16 October 1980, Hochstrass v Court of Justice, 147/79, EU:C:1980:238, paragraphs 12 to 14).

79 However, in the present cases, the criterion of nationality on the basis of which the flat-rate payment of travel expenses to which the officials concerned are entitled is calculated has no connection with the objective pursued by Article 8 of Annex VII to the Staff Regulations, since it results in the calculation of travel expenses on the basis of a distance unrelated to the distance between the place of employment and the place of origin of the persons concerned.

80 It follows from the foregoing that, by adopting a calculation criterion based on the location of the capital city of the Member State of which the officials referred to in the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations are nationals, that provision introduces an arbitrary distinction between officials whose place of origin is outside the European Union, since that payment is calculated on the basis of a criterion that has no connection with the place of origin of those officials.

81 Admittedly, the objective of ensuring cost-effectiveness in a socio-economic context in Europe requiring consolidation of public finances and a particular effort on the part of each public administration and its staff in order to improve effectiveness and efficiency, and the objective of modernisation and streamlining in relation to travel expenses, set out in recitals 12 and 24 of Regulation No 1023/2013 respectively, may justify limiting the grant of the benefit concerned to officials who are most in need of it (see, to that effect, judgment of 25 March 2021, Álvarez y Bejarano and Others v Commission, C‑517/19 P and C‑518/19 P, EU:C:2021:240, paragraph 68), or even a reduction of that benefit. However, considerations of a purely budgetary, administrative or staff policy nature cannot in themselves constitute an objective justification for the difference in treatment established between officials in comparable situations resulting from the use of a criterion that is completely unrelated to the objective pursued by Article 8 of Annex VII to the Staff Regulations.

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

83 Accordingly, it is necessary to uphold, in each of the appeals, the complaint in the first part of the first ground of appeal relating to a failure to observe the principle of non-discrimination on grounds of nationality and, therefore, to set aside the judgments under appeal as regards the rejection of the first head of claim in the actions for annulment and, consequently, as regards, on the one hand, the rejection of the request contained in the fourth head of claim in Case T‑531/16 and, on the other hand, the order that the appellants pay the costs in Cases T‑531/16 to T‑533/16 and T‑545/16, without it being necessary to examine the other parts of the first ground of the appeals.

84 By their third ground of appeal, the appellants in Case C‑567/22 P submit, in essence, that the General Court erred in law in affirming the difference in treatment established in Article 8(2) of Annex VII to the Staff Regulations among officials entitled to a flat-rate payment of travel expenses from the place of employment to the place of origin, by laying down different methods for calculating that payment for those whose place of origin is outside the territories of the Member States of the European Union as well as outside the countries and territories listed in Annex II to the FEU Treaty and the territories of the EFTA States.

85 The third ground of appeal concerns, more specifically, paragraphs 59 to 63 of the judgment under appeal in Case C‑567/22 P.

86 The appellants in that case submit that the General Court was wrong to hold that the difference in treatment established between the two categories of officials concerned, who are in comparable situations as regards the subject matter and purpose of Article 8 of Annex VII to the Staff Regulations, was justified by legitimate objectives, referred to in recitals 2 and 12 of Regulation No 1023/2013. The General Court wrongly held that, in the light of the broad discretion enjoyed by the EU legislature in that regard, it was not manifestly inappropriate to establish different methods of calculating that financial benefit for officials whose place of origin is outside the territory of the European Union, referred to in the second subparagraph of Article 8(2), in order to achieve those objectives. The General Court failed to examine whether that difference in treatment was proportionate in the light of the objective pursued by Article 8 itself.

87 Those appellants refer, in that regard, to the arguments that they put forward in the context of the first ground as regards the complaint concerning a failure to observe the principle of non-discrimination on grounds of nationality.

88 The defendant institutions dispute the merits of the third ground of appeal in Case C‑567/22 P.

89 In particular, the Commission submits that the General Court examined the comparability of the two categories of officials concerned as regards the subject matter and purpose of Article 8 of Annex VII to the Staff Regulations and found that the payment provided for in that article is comparable for those two categories of officials. Furthermore, the General Court correctly concluded, having regard to the objectives of the reform of the Staff Regulations introduced by Regulation No 1023/2013 and the broad discretion enjoyed by the legislature, that the legislature had neither drawn an arbitrary distinction nor made a manifestly inappropriate choice.

90 The difference in treatment alleged in the context of the present ground of appeal concerns officials whose place of origin is outside the European Union compared with those whose place of origin is within the European Union.

91 It follows from paragraph 75 above that, in the light of the objective of enabling personal ties to be maintained with the place where they have their principal interests, all officials entitled to an expatriation or foreign residence allowance are in a comparable situation, whether their place of origin is within or outside the territory of the European Union.

92 The distinction drawn between the officials concerned according to whether their place of origin is within or outside the European Union is unrelated to that objective.

93 Therefore, the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations introduces, in that regard, an arbitrary distinction to the detriment of officials whose place of origin is outside the European Union.

94 Moreover, as has been pointed out in paragraph 81 above, considerations of a purely budgetary, administrative or staff policy nature cannot in themselves constitute an objective justification for the difference in treatment established between officials in comparable situations resulting from the use of a criterion that is completely unrelated to the objective pursued by Article 8 of Annex VII to the Staff Regulations.

95 It follows from the foregoing that, by holding that the difference in treatment established by the EU legislature between officials entitled to the flat-rate payment of travel expenses from the place of employment to the place of origin depending on whether the latter is within or outside the European Union was justified by considerations of a budgetary or administrative nature or related to the management of human resources, the General Court erred in law.

96 Therefore, the third ground of appeal in Case C‑567/22 P must also be upheld and, accordingly, the judgment under appeal in that case must be set aside to the same extent as stated in paragraph 83 above.

97 Having regard to the upholding of the complaint relating to a failure to observe the principle of non-discrimination on grounds of nationality, put forward in the first part of the first ground of the appeals, and of the third ground of appeal in Case C‑567/22 P, relating to a failure to observe the principle of equal treatment, there is no need to examine the other grounds of the appeals.

98 In accordance with the second sentence of the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, if the decision of the General Court is set aside, the Court of Justice may itself give final judgment in the matter, where the state of the proceedings so permits.

99 In the present cases, in the light, in particular, of the fact that the actions brought by the appellants concerned in Cases T‑531/16 to T‑533/16 and T‑545/16 are based, in essence, on a plea of illegality that has been the subject of exchanges of arguments before the General Court, the examination of which does not require the adoption of any additional measure of organisation of procedure or of inquiry, the Court of Justice finds that it is appropriate to give final judgment in those matters since the state of the actions so permits.

100 In view of the fact that the judgments under appeal have been set aside in part, the Court must rule only on the first heads of claim for annulment of those actions and on the claims of a financial character submitted in Case T‑531/16.

101 Before the General Court, the appellants each sought the annulment of the decision by which the institution of which he or she is an official applied the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations for the first time in respect of him or her.

102 In support of that claim, they pleaded the illegality of that provision, based, inter alia, on the failure to observe the principle of non-discrimination on grounds of nationality.

103 It follows from the examination of the appeals, in particular paragraphs 80 to 83 above, that that plea of illegality is well founded.

104 Consequently, the first head of claim for annulment of the actions in Cases T‑531/16 to T‑533/16 and T‑545/16 must be upheld and, accordingly, the decisions by which the institution of which each of the appellants is an official determined for the first time his or her entitlement to the flat-rate payment of annual travel expenses pursuant to the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations must be annulled.

105 Before the General Court, the appellants concerned in Case T‑531/16 argued that the annulment, in particular, of the decision determining the amount of the reimbursement of their travel expenses for 2014 should entail the reimbursement of their annual travel expenses to the place of origin based on their actual expenses, plus default interest from 12 June 2014.

106 The General Court held, without examining the admissibility of that claim for reimbursement, that it had to be refused as a result of the rejection of the heads of claim for annulment, since it was closely related to them.

107 In that regard, it must be borne in mind that Article 91(1) of the Staff Regulations provides that the EU judicature has jurisdiction in any dispute between the European Union and any person to whom the Staff Regulations apply regarding the legality of an act adversely affecting such a person within the meaning of Article 90(2) thereof, and that, in disputes of a financial character the EU judicature has unlimited jurisdiction.

108 ‘Disputes of a financial character’, within the meaning of Article 91(1), include all those concerning the payment by an institution to an official or other staff member of a sum which he or she considers to be due to him or her under the Staff Regulations or other measure governing their working relations (see, to that effect, judgment of 18 December 2007, Weißenfels v Parliament, C‑135/06 P, EU:C:2007:812, paragraph 65 and the case-law cited).

109 In principle, the unlimited jurisdiction conferred on the EU judicature by Article 91(1) of the Staff Regulations entrusts it with the task of providing a complete solution to the disputes brought before it, that is to say to rule on all the rights and obligations of the official or other staff member, save for leaving to the institution in question, under the control of those Courts, the implementation of such part of the judgment and under such precise conditions as those Courts shall determine (judgment of 18 December 2007, Weißenfels v Parliament, C‑135/06 P, EU:C:2007:812, paragraph 67).

110 Thus, the EU judicature is therefore able to order an institution, in an appropriate case, to pay a sum to which the official or other staff member concerned is entitled under the Staff Regulations or another legal measure (see, to that effect, judgment of 18 December 2007, Weißenfels v Parliament, C‑135/06 P, EU:C:2007:812, paragraph 68).

111 It follows from the foregoing grounds that the annulment of the decisions at issue in Case T‑531/16 stems from the illegality, found by way of a plea of illegality, of the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations, on which those decisions were based.

112 Since that provision must therefore be disapplied, the amount of the travel expenses payable to each of the appellants concerned in Case T‑531/16 in respect of 2014 must be determined solely in accordance with the provisions of the first subparagraph of Article 8(2) of Annex VII to the Staff Regulations.

113 It follows that the Commission must be ordered to pay each of the appellants concerned in Case T‑531/16 a sum corresponding to the difference between the amount of the travel expenses already received for 2014 and that resulting from the application of an allowance calculated per kilometre of geographical distance between their place of employment and their place of origin, together with default interest at the statutory rate.

114 Under Article 184(2) of the Rules of Procedure, where the appeal is unfounded or where the appeal is well founded and the Court itself gives final judgment in the case, the Court is to make a decision as to the costs.

115 Under Article 138(1) of those rules, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

116 Since the Commission and the Court of Justice of the European Union have been unsuccessful in the present appeals and, for the most part, in the actions before the General Court and since the appellants in Cases C‑567/22 P to C‑569/22 P and C‑570/22 P respectively have applied for costs against those institutions, those institutions must, in addition to bearing their own costs, be ordered to pay those incurred by the respective appellants both at first instance and in the present appeals.

117 In accordance with Article 140(1) of the Rules of Procedure, which applies to appeal proceedings by virtue of Article 184(1) thereof, Member States and institutions which have intervened in the proceedings are to bear their own costs. The Parliament and the Council, interveners at first instance, are to bear their own costs.

1. Sets aside the judgments of the General Court of the European Union of 15 June 2022, Dumitrescu and Schwarz v Commission (T‑531/16, EU:T:2022:362); of 15 June 2022, YT and YU v Commission (T‑532/16, EU:T:2022:363); of 15 June 2022, YV and Others v Commission (T‑533/16, EU:T:2022:364); and of 15 June 2022, YY and ZA v Court of Justice of the European Union (T‑545/16, EU:T:2022:366), in so far as, by those judgments, the General Court dismissed the actions of Mr Vasile Dumitrescu and Mr Guido Schwarz (T‑531/16), YT and YU (T‑532/16), YV (T‑533/16) and ZA (T‑545/16) seeking the annulment of the decision by which the European Commission (T‑531/16 to T‑533/16) and the Court of Justice of the European Union (T‑545/16) determined the flat-rate payment of travel expenses for the first time in respect of them pursuant to the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations of Officials of the European Union, in the version resulting from Regulation (EU, Euratom) No 1023/2013 of the European Parliament and of the Council of 22 October 2013 amending the Staff Regulations of Officials of the European Union and the Conditions of Employment of Other Servants of the European Union, and in so far as, by those judgments, the General Court ruled on the costs;

3. Annuls the Commission decisions determining Mr Vasile Dumitrescu’s and Mr Guido Schwarz’s entitlement to flat-rate payment of travel expenses pursuant to the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations of Officials of the European Union, in the version resulting from Regulation No 1023/2013, as those decisions are reflected in their salary statements for the month of June 2014;

4. Annuls the Commission decisions determining YT’s and YU’s entitlement to flat-rate payment of travel expenses pursuant to the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations of Officials of the European Union, in the version resulting from Regulation No 1023/2013, as those decisions are reflected in their salary statements for the month of June or the month of July 2014;

5. Annuls the Commission decision determining YV’s entitlement to flat-rate payment of travel expenses pursuant to the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations of Officials of the European Union, in the version resulting from Regulation No 1023/2013, as that decision is reflected in his salary statement for the month of July 2014;

6. Annuls the decision of the Court of Justice of the European Union determining ZA’s entitlement to flat-rate payment of travel expenses pursuant to the second subparagraph of Article 8(2) of Annex VII to the Staff Regulations of Officials of the European Union, in the version resulting from Regulation No 1023/2013, as that decision is reflected in his salary statement for the month of July 2014;

7. Orders the Commission to pay Mr Vasile Dumitrescu and Mr Guido Schwarz each a sum corresponding to the difference between the amount of the travel expenses already received for 2014 and that resulting from the application of an allowance calculated per kilometre of geographical distance between their place of employment and their place of origin, together with default interest at the statutory rate;

8. Orders the Commission, in addition to bearing its own costs, to pay those incurred by Mr Vasile Dumitrescu and Mr Guido Schwarz both in the procedure before the General Court in Case T‑531/16 and in the appeal in Case C‑567/22 P, those incurred by YT and YU both in the procedure before the General Court in Case T‑532/16 and in the appeal in Case C‑568/22 P, and those incurred by YV both in the procedure before the General Court in Case T‑533/16 and in the appeal in Case C‑569/22 P;

9. Orders the Court of Justice of the European Union, in addition to bearing its own costs, to pay those incurred by ZA both in the procedure before the General Court in Case T‑545/16 and in the appeal in Case C‑570/22 P.

10. Declares that the European Parliament and the Council of the European Union shall each bear their own costs.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Dumitrescu and Schwarz v Commission (Civil service - Flat-rate payment of travel expenses - Judgment) [2024] EUECJ C-567/22P (18 April 2024) URL: http://www.bailii.org/eu/cases/EUECJ/2024/C56722P.html Cite as: [2024] EUECJ C-567/22P, ECLI:EU:C:2024:336, EU:C:2024:336

Court of Justice of the European Communities (including Court of First Instance Decisions)