Europäischer Bürgerbeauftragter
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1. The complainant is a Parliament official who considers himself disadvantaged by the method of calculation used by the European Parliament to determine his new basic salary, as well as his new multiplication factor (hereinafter 'MF') after his first promotion following the 2004 revision of the Staff Regulations for Officials of the European Union. The complainant alleges that Parliament uses a method different from the one used by the European Commission and all other EU institutions.
2. The Ombudsman notes at the outset that the situation challenged by the complainant in the present inquiry is different from the problem identified in the Ombudsman's decision closing his joint inquiries n° 2986/2008 and 2987/2008 concerning Parliament's Practice of automatically changing the MF to 1, two years after the first promotion of officials.
3. Article 7 of Annex XIII of the Staff Regulations to Council Regulation (EEC, Euratom) No 723/2004 of 22 March 2004[1] ("Transitional measures applicable to officials of the Communities") concerning the MF states the following:
Basic monthly salaries of officials recruited before 1 May 2004 shall be determined in accordance with the following rules:
(...)
2. For each official, a multiplication factor shall be calculated at 1 May 2004. This multiplication factor shall be equal to the ratio between the basic monthly salary paid to an official before 1 May 2004 and the applicable amount defined in Article 2(2) of this Annex[2].
The basic monthly salary paid to the official on 1 May 2004 shall be equal to the product of the applicable amount and the multiplication factor.
The multiplication factor shall be applied in order to determine the official’s basic monthly salary following advancement in step or adjustment of remunerations.
3. Notwithstanding the foregoing provisions, for periods after 1 May 2004 the basic monthly salary paid to an official shall be not less than that he would have received under the system in force before that date through automatic advancement in step in the grade formerly occupied by him. For each grade and step, the former basic salary to be taken into account is equal to the applicable amount after 1 May 2004 multiplied by the coefficient defined in Article 2(2) of this Annex.
........
5. Without prejudice to paragraph 3, for each official, the first promotion after 1 May 2004 shall, depending on the category occupied before 1 May 2004 and the step occupied at the time the promotion takes effect, lead to an increase in basic monthly salary to be determined on the basis of the following table:
For the purpose of determining the applicable percentage, each grade shall be divided into notional steps corresponding to two months of service and into notional percentages reduced by one twelfth of the difference between the percentage for the step in question and that for the next higher step with each notional step.
For the purposes of calculating the salary before promotion of an official who is not in the last step of his grade, the value of the notional step shall be taken into account. For the purposes of this provision, each grade shall also be divided into notional salaries rising by one twelfth of the two-yearly increment for that grade throughout the span of the actual steps.
6. A new multiplication factor shall be determined upon this first promotion. That multiplication factor shall be equal to the ratio between the new basic salaries resulting from the application of paragraph 5 and the applicable amount in Article 2(2) of this Annex. (…) Subject to paragraph 7, this multiplication factor shall be applied to the salary after advancement in step and adaptation of remunerations. (...)
4. On 1 May 2004, the complainant, an official of the European Parliament, was in grade C*6, step 5[3], with seniority of step, as of 1 March 2004. His MF amounted to 0.8538223, according to the tables of Article 2(2) of Annex XIII. The complainant was then awarded advancement in step as of 1 March 2006, to grade C*6, step 6 (which became AST 6, step 6 under the new Staff Regulations). On 1 January 2008, Parliament promoted him to grade AST 7, step 1. After his promotion, Parliament set the complainant's new basic salary at EUR 4 916.51 and calculated his new MF of 0.9440593, in accordance with the method used by the Institution.
5. On 5 November 2009, the complainant lodged a complaint under Article 90(2) of the Staff Regulations against Parliament's calculation of his new basic monthly salary. He also stated that, after his promotion, his MF should amount to 0.9573258 and not to 0.9440593, as Parliament had calculated it. He took the view that Parliament's method of calculation of his new salary and his new MF did not comply with Article 7(2) of Annex XIII of the Staff Regulations.
6. In his Article 90(2) complaint, the complainant further stated that Parliament's method of calculation of the notional step, on the basis of Article 7(5) of Annex XIII, was not correct and led to differential treatment of officials of the same grade and step, depending on the date of their promotion (before or after 1 May 2004). This was due to Parliament's decision whereby, in order to determine the algorithm for the calculation of the notional salary for officials before their promotion, reference was made to the MF corresponding to the next step of his/her current grade. In the complainant's view, the method adopted by the Commission to calculate the notional salary of its officials was the correct one because it did not make reference to the MF of the official's next step. He claimed that Parliament, when calculating his notional salary prior to his promotion, should have applied the MF of 0.8538223, which corresponds to the step he had at the time of the transition to the new Staff regulations (step 5), and not the MF of 0.8409561, which corresponds to his next step at the time of the promotion (step 7).
7. By decision of 8 March 2010, Parliament rejected his Article 90(2) complaint. It stated that its method of calculation of the MF was in line with the statutory rules and that its interpretation of Article 7(2) of Annex XIII of the Staff Regulations was correct. Concerning the calculation of the value of the notional step foreseen in Article 7(5) of Annex XIII, this provision did not set out a "single method of calculation" but only stated that each grade is divided into notional steps. Article 7(5) of Annex XIII did not specify the MF applicable to the calculation of the notional salary.
8. The complainant was not satisfied with Parliament's reply and on 10 June 2010, he turned to the Ombudsman.
9. The complainant alleged that, after his promotion, Parliament failed to properly calculate the MF applicable to his basic monthly salary.
10. The complainant claimed that his new basic monthly salary should amount to EUR 4 985.61. In consequence, his new MF should be 0.9573258 and not 0.9440593, as Parliament calculated.
11. On 1 September 2010, the Ombudsman opened an inquiry regarding the complainant’s allegation and above claim. In his letter to Parliament, the Ombudsman asked the Parliament to further explain the rationale for its particular practice and for the allegedly different algorithm it used to calculate the new MF, as compared to other institutions. The Ombudsman also asked Parliament to set out the financial impact its practice has on its officials who received their first promotion, as of 1 May 2004.
12. In view of the nature of the allegation raised in the complaint, and after obtaining the complainant's agreement, the Ombudsman also asked the Council of the European Union, the Court of Justice of the European Union, the European Court of Auditors ('ECA'), the European Commission ('EC'), the European Economic and Social Committee ('EESC') and the Committee of the Regions of the EU ('CoR'), for information on their respective calculation methods for the new MF in similar circumstances. The ECA replied on 14 September 2010, the EESC, on 20 September 2010, the CoR on 22 November 2010, the EC on 25 November 2010, the Court of Justice on 26 November 2010 and the Council on 3 January 2011 respectively.
13. Parliament sent its opinion, which was forwarded to the complainant with an invitation to make observations before 28 February 2011. The complainant did not submit any observations.
14. In support of his allegation, the complainant argued that Parliament's method of calculation of the MF on the basis of Article 7(5) Article XIII differed from the method used by the European Commission and by all other institutions of the European Union. The resulting differential treatment of officials was against the principle of the unity of the European Civil Service.
15. In its opinion, Parliament stated that Annex XIII of the Staff Regulations laid down transitional measures applicable to officials of the Communities following the entry into force of the reformed Staff Regulations. For officials recruited before 1 May 2004, Article 7 of Annex XIII laid down a complex mechanism in which the MF was the key factor in effecting the transition between the old salary scale and the new one which came into force on 1 May 2004. The MF, calculated on 1 May 2004, expressed the ratio between the basic salary on that date and the salary laid down by the new salary scale.
16. Pursuant to Article 7(5), (6) and (7) of Annex XIII of the Staff Regulations, the first promotion under the new rules constitutes an essential stage in the transition between the old and new salary scales. When the first promotion occurred, a new basic salary had to be set for the official concerned, together with a new MF.
17. However, the provisions of Article 7(5), (6) and (7) of Annex XIII of the Staff Regulations did not unequivocally lay down how to choose the relevant MF for calculating the notional salary. Moreover, when implementing Article 7 of Annex XIII of the Staff Regulations, Parliament had no instructions or guidelines at its disposal to show how it ought to interpret and apply these provisions.
18. For the purposes of calculating the basic salary of a newly promoted official, Parliament established an algorithm which was slightly different from that used by the Commission. Parliament applied the MF corresponding to the next step (as indicated in the table of Article 2(2) of Annex XIII) to the official's basic salary. However, the Commission applied the MF applicable to the grade and step of the official on 1 May 2004 (the "Commission's method") to this basic salary. As the relevant legislation and case law stood, there was nothing to invalidate either of these methods.
19. In relation to the calculation of the basic salary, Parliament's calculation was as follows:
First, Parliament calculated the percentage of the increase in the basic salary guaranteed in the table of Article 7 (5) of Annex XIII in the following way: From the percentage shown corresponding to the complainant's actual grade and step (3.7%), it subtracted the percentage corresponding to the step above (3.6%), multiplied by the total number of months in the complainant's step before the promotion[4];
Second, Parliament calculated the notional salary ('Sv'[5]) in the following way:
It added to the complainant's actual basic salary (EUR 5 426.68) one-twelfth of the difference between: (a) the salary for the next step in the same grade (step 7) multiplied by the relevant MF outlined in Article 2(2) of Annex XIII for that step (0,8409561); and (b) his basic salary for grade AST6 step 6 multiplied by 11[6]. The result was EUR 4 745.21[7];
Third, the actual salary after promotion was calculated in the following way: the notional salary (EUR 4 745.21) was multiplied by the percentage of the increase as calculated in the first point above (3.61%).
As a result, the complainant's basic monthly salary after promotion amounted to EUR 4916.51. On the basis of the new salary after promotion, Parliament calculated a new multiplication factor with reference to the salary contained in the new salary grid.
20. In the complainant's case, the application of Parliament's algorithm thus initially yields a result less favourable than the Commission's method. However, Parliament added that its algorithm does not systematically produce a result less favourable than that obtained by using the Commission's method. It does so only when the MF for the next step pursuant to Article 2(2) of Annex XIII is lower than the MF for the official's step on 1 May 2004. Because of the diversity of the individual situations of officials at the time of their first promotion, a minority of them were likely to be affected.
21. Moreover, Parliament emphasised the fact that its method meant that, since 1 January 2010, the complainant’s basic salary has been EUR 5 463.30 with a MF of 1[8]. By way of comparison, on the same date, his salary, according to the Commission's method, would have been EUR 5 426.09 with a MF of 0.9931889. Consequently, Parliament concluded that the initial financial disadvantage was offset by a higher basic salary that the complainant received as of 1 January 2010.
22. For the calculation of the notional salary, the Commission uses the MF assigned to the relevant official on 1 May 2004, before his/her promotion (in the complainant's case, the MF corresponding to step 5 of grade C1). According to the 'Commission's method', the notional salary is therefore calculated as follows:
The basic salary, as indicated in the new table of salaries of 1 July 2007[9] for the grade and the step in question (in the complainant's case, AST 6 step 6), plus one-twelfth of the difference between the salary for the next step in the same grade (multiplied by the MF corresponding to the complainant's grade and step on 1 May 2004, that is to say: 0.8538223). Add to this his basic salary for grade AST6 step 6, multiplied by the number of months between the creation of the complainant's step and the promotion (22) and divide by two. The actual salary after promotion is calculated in the following way: the notional salary multiplied by the percentage increase applicable[10]. As indicated by the Commission in its reply, the complainant's salary would have amounted to EUR 4 811.90.
23. The ECA provided a detailed explanation of its method. It calculates a notional salary and a "salaire garanti"[11]. For the calculation of the salaire garanti, the ECA applies the MF applicable to the official's step on 1 May 2004, as the Commission does. However, in order to calculate the notional salary, it takes into account, as Parliament does, the MF corresponding to the official's next step. Then, the ECA chooses the amount most favourable for its staff.
24. The Council of the European Union[12], the Court of Justice of the European Union, the EESC and the CoR stated that they applied the Commission's method (as described above).
25. The Ombudsman understands from the relevant provisions[13] referred to in the initial part of his decision that the MFs will vary in time with the officials' careers and will tend to approach 1, when the concerned officials will be paid according the new pay grid. The first MF was established for each official on 1 May 2004 and is applicable when determining the official's basic salary following advancement in step or adjustments of remunerations[14], up to the first promotion, when a new MF has to be calculated. After the first promotion, other MFs will have to be calculated to take account of the official's advancement in step or subsequent promotions until the official's MF becomes equal to or higher than 1(Article 7(7) of Annex XIII)[15].
26. Having carefully examined the calculation methods used by the institutions, the Ombudsman concludes that the only difference between the "Commission's method" and "Parliament's method" concerns the way they calculate the notional basic salary before promotion and more precisely, how they calculate the value of seniority in grade before that promotion. Whereas, when calculating the value of the notional step, the Commission applies the MF assigned to the official on 1 May 2004 (in the complainant's case AST6 step 5), Parliament's method encompasses two MFs: (i) the MF determined on 1 May 2004 (in the complainant's case AST6 step 5); and (ii) the MF corresponding to the above step at the time of promotion (in the complainant's case AST 6 step 7)[16].
27. The Ombudsman agrees with Parliament that the relevant provisions of the Staff Regulations (Article 7 (5) of Annex XIII) do not clearly define which MF has to be applied for calculating the notional salary: the MF corresponding to the official's grade and step on 1 May 2004 (before his/her promotion) as the Commission does, or the two MFs as Parliament does. Moreover, the Ombudsman acknowledges that the Court of Auditors also appears to apply Parliament's method.
28. However, the Ombudsman notes that the last sentence of Article 7, paragraph 2, stipulates that the MF calculated on 1 May 2004 for each official, "...shall be applied in order to determine the official's basic monthly salary following advancement in step or adjustments of remunerations." Even if, when it comes to calculating the basic salary after the first promotion, the situation is not one of advancement in step, all institutions must, for that purpose, calculate the value of the seniority in step at the time of promotion (the notional step), which is indeed the financial value of the time that has passed between the two steps. The Ombudsman wonders why the institution calculating the value of the notional step should use a different MF to the one they use to calculate the step increase foreseen in the above-mentioned paragraph 2 of Article 7. Parliament has been unable to put forward any rationale for its method of calculation.
29. The Ombudsman also agrees with the argument submitted by the Commission to justify its method: Article 7(5) of Annex XIII explains precisely, on the one hand, how to determine the percentage applicable and, on the other hand, how to calculate the notional salary before promotion. If the legislator had intended to apply two different multiplication factors to determine the value of the seniority of step before promotion, it would have mentioned it expressly, not only because the calculation of that value would be more complicated, but it would also be difficult to reconcile with the last sentence of Article 7(2), as quoted above.
30. The Ombudsman notes that the Court of Justice, the Council of the European Union, the EESC and the CoR have a different approach[17]. They follow the Commission's method and apply the MF corresponding to the step of the official on 1 May 2004, to calculate the notional basic salary before his/her promotion. It appears therefore that, in summary, the majority of the EU institutions apply the Commission's method.
31. Even if it is arguable that the interpretation of these legal provisions is difficult and/or these provisions allow for different interpretations, it is clear that the various methods used have an impact on the calculation of the salaries of officials. The Ombudsman considers that, in the absence of clear authoritative interpretation by the Courts in the present case, and given that the legal interpretation adopted by Parliament is not manifestly unreasonable, he should not consider that his own interpretation is necessarily the correct one. Therefore, although he considers that the arguments mentioned in points 27 and 28 above strongly support the "Commission's method", the Ombudsman will not affirmatively conclude that Parliament acted incorrectly, nor that Parliament's actions constitute an instance of maladministration. In these circumstances, there is no justification for making further inquiries into the complainant's allegation and claim.
32. The Ombudsman considers, however, that the situation his inquiry has revealed is unsatisfactory and regrets that the institutions were not able to agree and apply a common approach concerning the method used to calculate officials' salaries after promotion despite of the existence of various interinstitutional bodies created with the precise intention of ensuring the uniform application of the Staff Regulations. This is even more surprising when the question of salaries of officials recruited under the old Staff Regulations and the financial impact of the new salary grid was a key political issue during the negotiation of the 2004 revision of the Staff Regulations.
33. As the complainant's case clearly showed, the different methods of calculation used by the EU institutions lead to differences in salaries which are unacceptable and, contrary to Parliament's view, cannot be considered minimal. As rightly pointed out by the complainant, the principle of the unity of the European Civil Service implies that all the institutions should interpret and apply the Staff Regulations to their staff members in a consistent manner. The Ombudsman will, therefore, make a further remark concerning the need for the EU institutions to agree on a common methodology to apply Article 7(2) of Annex XIII and thus put an end to the divergent interpretations and differences of treatment that the present inquiry identified.
34. Moreover, another revision of the Staff Regulations is already underway. In the Ombudsman’s view, it is important that the institutions should take action now to avoid a situation arising in which this new revision leads to similar divergences of practice, which undermine the unity of the European civil service. The Ombudsman will, therefore, make a further remark below.
On the basis of his inquiry into this complaint, the Ombudsman does not consider that there is any justification for making further inquiries into the complaint and closes the case.
The principle of the unity of the European Civil Service implies that all the institutions should interpret and apply the Staff Regulations in a consistent manner.
The Ombudsman considers, therefore, that the EU institutions should agree on a common methodology to apply Article 7(2) of Annex XIII and thus put an end to the divergent interpretations and resulting differences in treatment that the present inquiry identified.
The Ombudsman also considers that, before the next revision of the Staff Regulations, the EU institutions should put in place a mechanism to (i) identify difficulties of interpretation of the revised provisions and (ii) reach a common position at an early enough stage to avoid divergences occurring in practice. According to the principle of loyal cooperation, each institution should avoid premature commitments and decisions that would make it difficult for it to accept and implement a common position.
The complainant and Parliament will be informed of this decision.
The Ombudsman finds it appropriate to also inform the Presidents of the institutions which contributed to his inquiry, as well as the Presidents of the administrative bodies in charge of harmonising the implementation of the Staff regulations of EU officials (College of Heads of Administration and Staff Regulations Committee[18]), of this decision.
P. Nikiforos Diamandouros
Done in Strasbourg on 10 November 2011
[1] OJ L 124, 27 April 2004, p. 1.
[2] Article 2(2) of Annex XIII of the Staff Regulations reads as follows:
"Subject to the provisions of Article 7 of this Annex, basic monthly salaries shall be determined for each grade and step as provided for in the following tables (...)". These tables lay down the new basic salaries in the new pay scale and the MF that will apply to each grade and step in order to guarantee that the basic salaries of the officials as of 1 May 2004 will not change with the entry into force of new Staff Regulations.
[3] During the transitional period of the implementation of the Staff Regulations, the officials´ grades were marked with a *.
[4] 3.7% - (3.7-3.6%) x 11/12 = 3.60833 (rounded off to 3.61%). The Ombudsman notes that this is an undisputed method used by all institutions.
[5] "Salaire virtuel" in French.
[6] the number of months between the establishment of the complainant's step before the promotion (22), divided by two
[7] Sv=5 426.68 x 0.8538223+ [1/12x (5 654.72x0.8409561-5 426.68x0.8538223)x 11] = 4 745.21. The Ombudsman notes the underlined two different MF used in this algorithm.
[8] The Ombudsman points out that this statement is inaccurate. The higher salary indicated by Parliament does not result only from the practice or algorithm that is in question in the present case, but also from another practice of Parliament, which consists in automatically raising the MF to 1, two years after the date of the official’s first promotion. The Ombudsman has criticised this practice in his decision closing the joint inquiries n° 2986/2008 and 2987/2008.
[9] See tables of the basic salaries of the new salary grid on 1 July 2007.
[10] The percentage applicable is 3.61% in the present case.
[11] In the Ombudsman's understanding, all institutions make this same calculation.
[12] In its reply to the Ombudsman's request for information, the Council stated that it also applied the "Commission's method" and that the slight difference resulted in the fact that the Council rounded off the result to 3 decimals and the Commission, to 1 decimal.
[13] The Ombudsman recalls that the Court of Justice is the highest authority in interpreting EU law.
[14] See Article 7(2) of Annex XIII last paragraph.
[15] This complex mechanism has been fully explained in the General Court's judgment of 2 July 2010, in case T-485/08 P, points. 90-93 and130 and ff.
[16] See footnote 7 above.
[17] As European Ombudsman's services proceed.
[18] The Staff Regulations Committee was established by the Staff Regulations of Officials of the European Union.
