The background to the complaint

1. On 27 June 2008, the Greek government notified the European Commission of its plans to privatise certain assets of Olympic Airlines and Olympic Airways Services. This involved winding up Olympic Airlines and making its employees redundant. While it was expected that the new private investor would take on some of these employees, no obligation to that effect was foreseen in the conditions of the sale. However, the Greek government announced a number of measures to support those employees who would be dismissed as a consequence of the privatisation and would not be retained by the new private investor. On 17 September 2008, the Commission concluded that the privatisation plan did not involve any State aid[1].

2. The original plan, which was to sell certain assets by public tender, was not successful because of the financial crisis. The Greek government thus entered into direct negotiations with an interested investor and, on 9 March 2009, announced that Marfin Investment Group Holding SA had agreed to pay EUR 177 million for the assets to be sold. On 10 March 2009, the Commission endorsed the revised privatisation plan[2]. On 29 September 2009, Olympic Airlines ceased its operations and Olympic Air, the new airline, commenced flights.

3. On 31 August 2009, the complainants, an Olympic Airlines employee residing in Germany and her husband (Mr R.), wrote to the Commission's Directorate-General for Energy and Transport (DG TREN). They complained that German employees of Olympic Airlines had been discriminated against. They pointed out that, by adopting law 3717/2008, the Greek government implemented support measures for the former employees of Olympic Airlines who lost their jobs as a result of the privatisation. These included compensatory payments, an early retirement scheme, and an offer of public sector jobs. However, the measures only applied to employees residing in Greece. The Commission, which approved the privatisation in a State aid decision, was at least partly responsible for this and should therefore take urgent action to bring the discrimination to an end.

4. The complainants did not receive a reply from the Commission. They consequently turned to the European Ombudsman on 23 September 2009.

5. Following the Ombudsman's intervention, DG TREN replied to the complainants on 1 October 2009. It stated that the Commission did not analyse the issue of employee rights when it took the State aid decisions in September 2008 and March 2009. It was true that, in the 2008 decision, the Commission noted that the Hellenic Republic had decided on a number of support measures in favour of the employees who would be made redundant as a result of the liquidation of the relevant companies. However, these measures were not part of the sale procedure and the Commission had not been consulted on them. DG TREN therefore did not consider that it could cancel the ongoing sales process for the reasons submitted by the complainants. It added that, in reply to a request from the Greek authorities, the Commission stated that Articles 3 and 4 of Directive 2001/23[3] (on safeguarding employees' rights in the event of transfers of undertakings) did not apply in the present case. However, this did not preclude a national court or the European Courts from coming to a different conclusion.

6. DG TREN further stated that DG Employment, Social Affairs and Equal Opportunities was responsible for questions concerning the equal treatment of Greek and non-Greek employees. It mentioned a number of legislative measures that might be relevant in this context (Directive 2009/38[4] on the European works council, Directive 2002/14[5] on informing and consulting employees, and Directive 98/59[6] on mass redundancies). Finally, DG TREN recalled that, as stated in Article 39 of the EC Treaty and Regulation 1612/68[7], EU citizens must not be discriminated against on the basis of nationality in relation to access to, or conditions of, employment. However, this only applies to cross-border situations involving at least two Member States.

7. The complainants upheld their view that the Commission's role was to scrutinise whether the privatisation process complied with EU law, including whether the principle of non-discrimination had been respected both by the plan itself and during the implementation of the plan. They further expressed their surprise at DG TREN's reference to DG Employment as being competent in relation to the matters they had raised. If that were true, DG Employment should also have been involved in the matter, they argued.

8. In further correspondence with the Commission, the complainants included a copy of the Commission's decision on the privatisation plan, as well as Greek laws 3710/2008 (which introduced special rules for winding up public companies which were in economic difficulties and had received State aid) and 3717/2008 (on the social support measures for Olympic Airlines employees). They also included copies of their correspondence with the German anti-discrimination officer, whom they had asked to intervene, but who declined to act. In his letters, Mr R. noted that, according to the protocol attached to the State aid decision, both the Commission's Secretariat-General, which is responsible for ensuring the proper application of EU law, and DG Employment agreed to the decision. The protocol even mentioned that comments made by DG Employment had been taken into account. In the complainants' view, this meant that the social support measures, which are mentioned in the State aid decision, should be implemented in a non-discriminatory manner. However, the measures only benefitted employees in Greece. It was thus strange that the Commission, which was aware of these facts, did not use its powers under Article 226 of the EC Treaty[8] in order to prevent this discrimination. It was further odd that the Commission had agreed to a similar plan for 200 employees of Olympic Catering, which was privatised in 2002, while the approximately 500 former Olympic Airlines employees who had worked outside of Greece would not benefit from any social assistance. On 29 October 2009, the complainants also informed the Ombudsman that they had submitted an infringement complaint to the Commission because the Greek authorities had not reacted to their approaches.

The subject matter of the inquiry

9. Against this background, the complainants made the following allegations and claims.

Allegations:

1) The Commission failed to reply in substance to their letter of 31 August 2009.

2) The Commission failed to take appropriate action in relation to the discrimination against Olympic Airlines employees who do not reside in Greece.

Claims:

1) The privatisation of Olympic Airlines should be suspended until appropriate safety measures have been implemented in favour of all Olympic Airlines employees who are to be dismissed.

2) The Commission should ensure that Olympic Airlines employees who are not resident in Greece receive the same benefits set out in the social package which Greece provided to employees resident in Greece. The benefits in question are referred to in the 2008 State aid decision. Alternatively, the Commission should commence an Article 226 procedure against Greece.

10. The Commission replied to Mr R.'s letter on 1 October 2009, thereby settling the first allegation. As regards the first claim, the liquidation of Olympic Airlines was completed on 29 September 2009, making it too late for the Commission to act to stop the privatisation process. This claim was therefore also not included in the Ombudsman's inquiry.

11. By letter dated 6 May 2010, the complainants submitted that the special liquidation process for Olympic Airlines, as foreseen in Greek law 3710/2008, could not be accepted as valid by German courts and other actors until the question whether EU law had been breached had been settled. Until then, the privatisation process should be declared as not being finalised. The Ombudsman considers that the complainants may thus have wished to raise a further claim directed at the Commission. However, as already noted above, the sale of the relevant assets of Olympic Airlines was completed on 29 September 2009, thereby making it impossible for the Commission to comply with the complainants' request. The complainants' further claim was therefore not taken up for inquiry.

12. On 16 May 2010, Mr R. submitted further observations. He alleged that, by requiring and supervising the sale of certain assets of Olympic Airlines, the Commission had furthered the bankruptcy of the Greek State. He claimed that the public should be informed about the mismanagement by the Commission and the Greek Government, and that the privatisation should be declared as incomplete until the unequal treatment of non-resident employees has been put to an end. According to Article 2(4) of the Ombudsman's Statute, an allegation needs to be preceded by appropriate prior administrative approaches to the institution or body concerned. The Ombudsman notes, however, that the complainants do not appear to have raised this allegation in their correspondence with the Commission. The allegation and the related claim are, therefore, inadmissible at present. However, the complainants are free to renew this allegation and related claim after having made appropriate prior approaches to the Commission. To the extent that the complainants wished to raise allegations and claims concerning the behaviour of the Greek authorities, the Ombudsman would be unable to deal with them, given that he can only assess whether there has been maladministration in the activities of EU institutions, bodies, offices, or agencies.

13. In a letter dated 25 May 2010, Mr R. alleged that both the Commission and the Hellenic Republic had violated the principle of transparency by not explaining properly the reasons for rejecting his complaint. He thus claimed that the Commission and Greece should provide a thorough explanation for their rejection of his complaint and justify their inaction. As far as this allegation and claim are directed against the Hellenic Republic, they are outside the Ombudsman's mandate. As far as they relate to the Commission, the Ombudsman considers that they reflect the fact that the complainants were not satisfied with the Commission's explanations and are thus already covered by the present inquiry.

The inquiry

14. The complaint was submitted on 23 September 2009. On 27 October 2009, the Ombudsman opened an inquiry and asked the Commission for an opinion on the second allegation and the second claim.

15. The Commission sent the English original of its opinion on 23 March 2010 and the German translation on 7 April 2010. On 8 April 2010, it was forwarded to the complainants for observations. The complainants submitted a number of letters containing their observations between 8 May and 24 December 2010.

The Ombudsman's analysis and conclusions

A. Allegation of failure to take appropriate action in relation to the alleged discrimination of Olympic Airlines employees not resident in Greece and related claim

Arguments presented to the Ombudsman

16. The complainants argued that the Commission, which was responsible for ensuring that EU law was properly applied and had agreed to the privatisation plan submitted by Greece, should have prevented the Olympic Airlines employees not resident in Greece from being discriminated against. In this context, the complainants relied on the prohibition of discrimination on grounds of nationality enshrined in the EU Treaties and on Directive 2000/43[9], which seeks to prohibit discrimination on grounds of race and ethnic origin.

17. The complainants essentially argued that the implementation of the support measures adopted by Greece amounted to indirect discrimination because they were not extended to employees who were resident in other EU Member States where Olympic Airlines had been active. The affected employees were predominantly nationals of the countries in which they were working. The majority of the employees who did not benefit from the social measures were therefore not Greek nationals. Furthermore, the complainants argued that the discrimination was racially or ethnically motivated and pointed out that most employees resident outside Greece were not members of the Greek Orthodox Church. They also did not share the same world-view as their Greek colleagues, who were much more closely involved in Greek politics. In order to support their view, the complainants put forward a number of examples highlighting the cultural differences between Greeks and Germans. They referred in particular to an incident prior to the privatisation, in which Greek employees were promoted and non-Greek employees were not.

18. In its opinion, the Commission first remarked that only migrant workers could benefit from the free movement rules set out in Article 39 EC[10] and in Regulation 1612/68. However, on the basis of the information available to the Commission, Mrs R. appeared to be a German national who worked in Germany. Moreover, the complaint related to an employment contract governed by German law. Therefore, the case did not fall under the free movement provisions. The same conclusion applied to the alleged discrimination resulting from the application of the Greek social plan and its potential effects outside of Greece.

19. In any event, the social measures adopted by the Greek government did not form part of the sale process that was communicated to the Commission under the State aid rules. The Commission referred again to its statement concerning the applicability of Directive 2001/23. It also referred to the three EU directives on employment relations that it had already mentioned in its letter dated 1 October 2010. In particular, it noted that Directive 98/59 (on mass redundancies) had been transposed into national law both in Greece and Germany. It was thus for national authorities to ensure that these rules were applied correctly and that any duties that they imposed on the employer were fulfilled.

20. As regards discrimination on grounds of race, ethnicity, or religion, the Commission stated that Directive 2000/43 was not applicable in the present case. This directive only concerns discrimination on the grounds of race or ethnic origin, which were not at issue here.

21. In their observations, the complainants referred to two letters which Mr R. had sent to the Commission on 24 and 31 December 2009. In these letters, Mr R. pointed out the extent of the discrimination by comparing the sums which employees were likely to receive. In Germany, the compensation would amount to two-and-a-half months of salary, whereas in Greece it could amount to up to 50 times as much. In reply to the Commission's arguments that Mrs R.'s contract was regulated by German law, he also noted that the Olympic Airlines branches outside Greece were in fact controlled from Athens and were not autonomous. However, Greece was hiding behind the principle that social measures are only applicable to residents. Mr R. therefore asked the Commission to commence infringement proceedings or alternatively to explain in detail why these facts did not violate EU law. He also asked for the public to be informed about the mismanagement at Olympic Airlines.

22. The complainants also underlined that the privatisation of Olympic Airlines, including offering social support measures to employees resident in Greece, would have been irreproachable if Olympic Airlines had only operated in Greece. However, this was not the case. In fact, there were 500 employees who worked outside of Greece. It was unfair and discriminatory that these employees could not benefit from the support measures available to their former colleagues in Greece merely because they were not resident in the country. Mr R. added that employees in France had obtained payments equivalent to one year's salary. He pointed out that he had informed the Commission of this fact, and reiterated his request for it to put an end to this unequal treatment.

23. Finally, the complainants noted that they had asked the Commission to provide a more detailed explanation of its finding that Directive 2000/43 was not applicable.

24. In a letter dated 30 March 2010, the Commission underlined that Directive 2000/43 intended to protect citizens from discrimination on the basis of certain racial characteristics or on the ground that they belonged to an ethnic minority. According to the Commission, these grounds could not be detected in the case raised by the complainants. Furthermore, it was made clear in Article 3(2) of Directive 2000/43 that it was not applicable to unequal treatment on grounds of nationality. In reply to further letters submitted by Mr R. to convince the Commission that this was a case of racial or ethnic discrimination, the Commission explained that (a) the complainants had not shown why it should be assumed that there was a racial or ethnic difference between Greeks and Germans and that (b) there was no evidence to suggest that the unequal treatment was actually based on such alleged racial or ethnic differences. The same applied to the arguments brought forward in relation to discrimination on grounds of religion.

25. Mr R. objected to this analysis and again submitted detailed arguments as to why he considered that there had been a breach of Directive 2000/43.

26. In a further letter, the Commission repeated its above assessment. However, it also reminded the complainants that Member States were obliged to implement Directive 2000/43 into national law and that, therefore, the application of the principles enshrined in it was a matter for national law. If the complainants remained convinced that there had been such discrimination, they should raise this matter before national courts, which were competent to apply these provisions in individual cases.

27. Subsequently, Mr R. indicated that he had brought an action alleging discrimination before a German court. However, he also noted that the Commission was still not 'communicating constructively' and had still not explained why it did not insist on ensuring that Greece kept the promise it made (in their view) in the State aid decision of 17 September 2008, namely, to adopt a social package for all Olympic Airlines employees.

The Ombudsman's assessment

28. In their present complaint, the complainants essentially question the Commission's decision to reject their complaint concerning an alleged infringement of EU law by the Hellenic Republic, which decided to limit the financial support which Greek law 3717/2008 accorded to former Olympic Airlines employees resident in Greece. The Commission found that no discriminatory treatment had occurred because (a) the free movement provisions were not applicable; (b) Directive 2000/43 on the principle of equal treatment between persons irrespective of racial or ethnic origin did not apply either; and (c) the statement made in the State aid decision that former Olympic Airlines employees would benefit from social support measures did not actually form part of the decision. The Ombudsman will deal with these three aspects of the complaint in turn.

29. The Ombudsman recalls that his inquiry in this context is limited to investigating whether the Commission acted in accordance with the rules and principles binding upon it when handling the infringement complaint, and also whether it kept within the limits of its legal authority. His investigation does not imply a review of the question whether national legislation, practices and court decisions may be contrary to Community law. The Ombudsman further recalls that the Commission enjoys a discretionary power in deciding whether to institute proceedings before the Court of Justice in relation to the alleged failure by a Member State to fulfil its obligations under EU law.

(a) Breach of the free movement provisions

30. It is settled case-law that, in order for the provisions on free movement to apply, the situation of the person concerned must fall within the material scope of application of these provisions. This means that the person concerned must have actually exercised his or her right to free movement, that is, must have moved to another country[11]. Thus, the Commission can only find unlawful discrimination under the EU rules on free movement, and thus only consider taking measures against the Member State responsible for such discrimination, if the Member State measure under scrutiny impacts on the free movement of people.

31. The Commission noted that the complainants do not fall within the scope of application because they did not make use of their right to free movement. The complainants have not disputed this statement, nor have they shown that other Olympic Airlines employees outside Greece were migrant workers falling under the EU rules on free movement. The fact that Olympic Airlines' branches in Member States other than Greece may not have been autonomous, but in fact acted on orders from the company headquarters in Athens, is irrelevant in this context. In view of the above, the Ombudsman concludes that the Commission's analysis that the free movement provisions do not apply in the present case is correct.

32. It appears useful to add that this does not mean that the complainants were left without any protection. As the Commission pointed out, the EU has adopted a number of directives on the protection of workers, which had to be implemented by the Member States. In any event, the Ombudsman notes that Mrs R. and the other Olympic employees in Germany appear to have been accorded compensation under German law, that is, a sum amounting to two-and-a-half months of salary. It further emerges from the information provided by the complainants that former Olympic Airlines employees in France have benefitted from protection under French law. It is in this sense that one must understand the statement made in 2008 by Mr Hatzidakis, the Greek Minister of Transport at the time, namely, that "the employees are all protected, whether they work here or abroad… and the employees abroad are protected according to the employment contract they have signed", which Mr R. cited in his most recent letter to the Ombudsman. The complainants have not demonstrated that the above-mentioned provisions of EU law entitled them to receive the benefits foreseen by Greek law.

33. The Ombudsman therefore concludes that there was no maladministration in relation to this aspect of the complaint.

(b) Breach of Directive 2000/43

34. The complainants submitted that Greece had breached Directive 2000/43 by discriminating against Olympic Airlines employees outside the country on grounds of racial or ethnic differences. They also argued that there had been discrimination on the ground of religion. The Commission rejected these arguments, submitting that the Directive was not applicable in the present case and that the enforcement of the national provisions adopted in order to implement it was in any event the competence of national authorities.

35. The Ombudsman notes that discrimination on grounds of religion does not appear to fall under the scope of Directive 2000/43. In any event, he considers that the Commission was correct to find that there was no indication of discrimination on grounds of race, ethnicity or religion. The complainants have not submitted any convincing arguments to show that the difference in treatment was based on a decision to single out a group (such as, for instance, Olympic Airlines employees residing in Germany) on the ground that they did not share the same religion or were racially or ethnically different to those employees residing in Greece. In fact, the arguments which Mr R. submitted to support his allegation that there were ethnic, racial and religious differences between the relevant groups were essentially based on the nationalities of the persons concerned. However, and as the Commission has correctly pointed out, Article 3(2) of the Directive excludes from the latter's scope any difference of treatment based on nationality. It appears useful to note in this context that the complainants' correspondence with the German anti-discrimination authority suggests that the latter also considers that the law implementing Directive 2000/43 was not infringed in this case.

36. The Ombudsman therefore concludes that there was no maladministration in relation to this aspect of the complaint.

(c) Breach of the Commission's State aid decision

37. The complainants relied on a statement in the Commission's State aid decision of 17 September 2008 that the Hellenic Republic would adopt certain measures to protect employees who would be made redundant as a result of the privatisation[12]. It appears that the complainants consider that the Greek authorities thus promised to grant such protection to all former Olympic Airlines employees, regardless of where they lived, and that the failure to fulfil this promise constituted a breach of the Commission's State aid decision.

38. It is already doubtful whether the Greek authorities did indeed promise to grant protection to all Olympic Airlines employees. Paragraph 76 of the Commission's State aid decision clearly states that the measures to be adopted by the Greek authorities for the benefit of Olympic Airlines employees, who would be made redundant as a direct consequence of the privatisation, did not form part of the project communicated to the Commission. In any event, the Commission found that these measures did not constitute State aid. In this context, it should be recalled that the Commission's powers in this field are based on Article 107 TFEU. The Commission's analysis is therefore limited to determining whether or not the proposed measures constituted State aid. The complainants' argument based on the Commission's State aid decision must therefore fail.

39. It is true that DG Employment was asked for an opinion in the context of the Commission's assessment of the project which the Greek authorities communicated to it. It is not clear what this opinion related to. However, given the limits of the Commission's competence as set out above, and the Commission's consistent statement that the question of employee rights was not part of its analysis when approving the privatisation, it would appear likely that DG Employment was only consulted on the question of the applicability of Articles 3 and 4 of Directive 2001/23 (on safeguarding employees' rights in the event of transfers of undertakings). Even if DG Employment had already been consulted on the measures proposed by the Greek authorities for the benefit of Olympic Airlines, this does not affect the conclusion that the Commission's decision was limited to assessing whether the relevant project involved State aid.

40. In any event, as the above sections (a) and (b) of this assessment show, there was no unlawful discrimination. The complainants' argument that the Commission should have stopped such discrimination can therefore not be upheld.

41. In view of the above, the Ombudsman considers that there was no maladministration in relation to this aspect of the complaint.

B. Conclusion

On the basis of his inquiry into this complaint, the Ombudsman closes it with the following conclusion:

There was no maladministration in the Commission's assessment of the complainants' infringement complaint.

The complainant and the Commission will be informed of this decision.

 

P. Nikiforos Diamandouros

Done in Strasbourg on 28 February 2011

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[1] State aid cases N 321/2008 Olympic Airlines, N 322/2008 and N 323/2008, Olympic Airways Services, 17 September 2008, OJ 2010 C 18, p.9. The text of the decision is available in Greek at: http://ec.europa.eu/community_law/state_aids/ transports_2008.htm

[2] State aid case N 83/2009, C(2009) 1824 final, OJ 2010 C 25, p.15. The text of the decision is available in English at: http://ec.europa.eu/eu_law/state_aids/transports-2009/n083-09.pdf

[3] Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses, OJ 2001 L 82, p. 16.

[4] Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees, OJ 2009 L 122, p. 28.

[5] Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community, OJ 2002 L 80, p. 29.

[6] Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies, OJ 1998 L 225, p. 16.

[7] Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community, OJ 1968 L 257, p. 2.

[8] Now Article 258 of the Treaty on the Functioning of the European Union (TFEU).

[9] Council Directive 2000/43/EC of 29 June 2000 implementing the principle of equal treatment between persons irrespective of racial or ethnic origin, OJ 2000 L 180, p. 22.

[10] Now Article 45 TFEU.

[11] See, for example, Case 175/78 R v Saunders [1979] ECR 1129, paragraph 46, Case 299/05 Friedrich Kemzow v Republik Österreich [1997] ECR I-2629, paragraph 16, and Joined Cases C-64 and 65/96 Land Nordrhein-Westfalen v Kari Uecker and Land Nordrhein-Westfalen v Vera Jacquet [1997] ECR I-3171, paragraph 16.

[12] This paragraph reads as follows: "(76) The Hellenic Republic will enact a series of social measures for the employees who will be made redundant when Olympic Airlines enters the liquidation proceedings. These measures are not part of the notified sale process nor of the transactions to be entered into between Pantheon and the private investor(s) and are not related to Pantheon in any way. The measures will only concern employees who will be made redundant as a result of the cessation of activities of Olympic Airlines; they will therefore not confer any direct or indirect advantage on an undertaking and will not have any effect on the market." (translation by the Ombudsman's services - the text of the decision is only available in Greek).