Strasbourg, 25 February 2004

Dear Mr X,

On 10 January 2003, you made a complaint to the European Ombudsman against the European Commission concerning the salary scales for local agents applied by the Commission Delegation in Y.

On 10 February 2003, I forwarded the complaint to the President of the Commission. On 21 February 2003, you submitted additional documents, which were forwarded to the Commission on 4 March 2003. The Commission sent its opinion on 8 April 2003. I forwarded it to you with an invitation to make observations, which you sent on 27 May 2003.

I am writing now to let you know the results of the inquiries that have been made.

THE COMPLAINT

The complainant works for the European Commission Delegation in Y as a local agent. The complaint to the Ombudsman, made in January 2003, concerns the salary scales for local agents applied by the Delegation.

According to the complainant, the relevant facts are, in summary, as follows:

When he was engaged as a local agent at the Commission Delegation in Y on 15 January 2001, he discovered that the Commission's starting salaries are non-negotiable. Approximately 3-4 months later, he became aware of the existence of two different salary scales for remunerating local agents at the Delegation. When investigating the matter further, he realised that he and one other local agent, both engaged in 2001, were in a substantially inferior salary situation compared to all other local agents performing work of the same nature and of the same level of responsibility. This resulted in him being unable to join the Pension Scheme for local agents, which requires a 5 % contribution by the employee, due to lack of financial means.

He made a request locally to have his salary brought in conformity with the salaries of the other local agents. This request was denied. During 2002, the newly elected Staff Representative for local agents brought the matter to the attention of other Staff Representatives around the world and also informed the Commission services in Brussels. Eventually, the relevant Commission unit, RELEX K.5, admitted the existence of two different salary scales for local agents at the Delegation in Y. However, the Commission has not offered a solution to the problem.

As regards the admissibility of his complaint to the Ombudsman, the complainant notes that Article 90 of the Staff Regulations is not applicable to local agents.

In substance, the complainant alleges that:

(i) Different scales are applied to remunerate local agent staff performing equivalent tasks at the Commission Delegation in Y; and

(ii) Due to the inferior salary situation, he was not able to join the Pension Scheme for local agents.

The complainant claims:

(i) Immediate application of the same salary scale used to remunerate other group I local agents;

(ii) Retroactive payment from 15 January 2001 of the salary difference and all related benefits; and

(iii) Full re-instatement of his right to contribute retroactively from the beginning of 2001 to the Commission's Pension Fund for local agents, with relevant contribution by the Commission.

THE INQUIRY

The Commission's opinion

In its opinion, the Commission made the following comments:

The complainant was recruited by the Commission Delegation in Y on 15 January 2001 as a local agent in group I. His contract is governed by the Framework Rules laying down the Conditions of Employment of Local Staff of the Commission of the European Communities serving in Non Member Countries (hereafter "FR") and the Specific Conditions of Employment (hereafter "SCE") for local staff in Y.

As regards the complainant's assertion that the Staff Regulations are not applicable to local agents, the Commission observes that Article 22 of the FR foresees a right of appeal similar to that in Article 90 of the Staff Regulations(1). The same provision has been adopted in the SCE. The contract of employment between the complainant and the Commission explicitly refers to the FR and the SCE. It is therefore not true that, for local agents, there is no system equivalent to Article 90 of the Staff Regulations. The Commission has not received a formal appeal respecting the deadlines in the FR and the SCE.

As regards the complainant's allegations, it is correct that the principles of grading, and thereby also the pay structure, are non-negotiable. It is also correct that there exist two salary scales at the Delegation in Y. The reason for this is the following: The SCE for Y foresee, in Article 17.1, that the salary of a local agent is determined and should be paid in local currency. Due to very difficult economic conditions prevailing in Y, it was decided, in 1994, to establish a reference scale in ECU, with monthly payments of the salaries converted into local currency. During 1999, it was noticed that the application of the reference scale in ECU had artificially put the salaries of the local staff well above the salaries paid on the local market by the reference employers. It was therefore justified to return to salaries fixed in local currency, as prescribed by the SCE, and to apply the principles of salary revisions set out in Article 11 of the FR(2). Furthermore, the Government in Y had introduced a new currency in the country, and it had thereby been made illegal to link salaries to other currencies.

Negotiations were carried out with the Delegation's local staff and staff representatives. Eventually, those local agents who were already employed by the Delegation signed an addendum to their contracts, accepting the conversion of their salaries from ECU to the local currency at an agreed exchange rate. Subsequently, the salaries of those local agents were "frozen" until the point in time when they will have to be revised to bring them in line with the salaries of the local market. At the same time, a second salary scale was adopted in conformity with the principles of Article 11 of the FR. This scale applies as from 1 September 1999 to newly recruited staff.

The existence of the old salary scale corresponds to the necessity to maintain acquired rights for members of the local staff employed before 1 September 1999. New recruits benefit from the new scale, which was put in place in accordance with the FR and the SCE. Both schemes foresee that the salaries of local staff at the Delegation must be fully in line with the salaries paid by the best reference employers on the market. This compromise with two scales was proposed by the local staff and was accepted by the headquarters.

In fact, the new scale is the normal scale, which has been revised annually and is currently under review for 2002. In the meantime, the old salary scale is still applicable to some individual members of local staff on the basis of their previously acquired rights. There is no proof that this situation is not in line with local legislation.

The Commission concluded by making two statements. First, the complainant has not demonstrated that the salary scale applicable to local agents since September 1999 is not in line with provisions of local legislation. Second, contrary to what the complainant states, he was never denied the right to contribute to the Pension Fund. Instead, he decided to opt out.

The complainant's observations

As regards the appeal procedure, the complainant questions how he could possibly have appealed against a measure within three months, given that the measure was implemented in September 1999 and he was employed only in January 2001. In addition, the Commission never informed him of the existence of two salary scales.

The complainant further notes, in summary, that the existence of two salary scales for posts with the same function at the Delegation has been in place for over three years with the management's full knowledge. Hence, salary discrimination persists and the Commission has taken no action to correct it.

As regards the Commission's assertion that there is no proof that the situation is not in line with local legislation, the complainant refers to an extract from the local legislation saying, in summary, that equal work shall be paid equally, without distinction of sex, nationality or age. Thus, according to local law, he is being discriminated against both on grounds of salary and on grounds of nationality, since several nationals of Y receive preferential treatment at the Delegation.

It is true that he reluctantly opted out of the Pension Fund scheme. Nevertheless, this situation was brought about by his substantially inferior salary situation.

The complainant also makes two further remarks, which he describes, however, as not being key issues in his complaint. First, he states that the grading system, with its rule that two years of professional experience outside the EU system counts as one year in the Commission, borders on discrimination. Second, he asserts that the rules requiring regular reviews of local salaries based on annual market surveys have not been followed at the Delegation.

THE DECISION

1 Preliminary remarks

1.1 The complainant is a local agent at the Commission Delegation in Y. As regards the criteria for admissibility of a complaint laid down in the Statute of the Ombudsman and in particular Article 2 (8)(3) thereof, the complainant points out, that Article 90 of the Staff Regulations is not applicable to local agents.

1.2 In its opinion, the Commission observes that the rules applicable to local agents provide for a right of appeal similar to that in Article 90 of the Staff Regulations and that no formal appeal has been made regarding the subject of the complaint. In his observations, the complainant questions how he could have appealed against a measure implemented in 1999, given that he was employed only in 2001, especially since the Commission never informed him of the existence of two different salary scales.

1.3 The Ombudsman notes the point made by the Commission, but understands that the Commission does not contest the admissibility of the present complaint. Moreover, the complainant’s allegation of discrimination appears to raise an issue of general importance. The Ombudsman therefore considers it appropriate to continue to deal with the case.

1.4 The Ombudsman also notes that, in his observations, the complainant made two remarks regarding the Commission's grading system and the review of salaries at the Delegation, which could be interpreted as new allegations against the Commission. However, since the complainant described these remarks as not being key issues of the complaint, they are not dealt with in the framework of the present complaint. The complainant could consider submitting a new complaint to the Ombudsman regarding these matters, if he so wishes.

2 Alleged salary discrimination

2.1 The complainant alleges that two different scales are applied to remunerate local agents performing equivalent tasks at the Commission Delegation in Y. The Ombudsman understands the complainant to allege, in substance, that the existence of two salary scales constitutes discrimination against those who receive less pay for the same work. The complainant also argues that the existence of the two salary scales is contrary to local legislation and that he is also being discriminated against on grounds of nationality since several nationals of Y receive preferential treatment at the Delegation.

2.2 The Commission confirms the existence of two salary scales for local agents at the Delegation in Y. It explains that, although the applicable rules foresee that local agents’ salaries should be paid in local currency, it was decided in 1994, due to the very difficult economic conditions then prevailing in Y, to establish a reference scale in ECU, with monthly payments of salaries converted into local currency. In 1999, it was noticed that the application of the reference scale in ECU had artificially put the salaries of local staff well above the salaries paid by the reference employers on the local market. Furthermore, the introduction of a new currency had made it illegal to link salaries to other currencies. It was therefore justified to return to salaries fixed in local currency, as prescribed by the Specific Conditions of Employment (the SCE) for local staff, and to apply the principles of salary revisions set out in the Framework Rules laying down the Conditions of Employment of Local Staff of the Commission of the European Communities serving in Non Member Countries (the FR).

The local agents agreed to a conversion of their salaries into local currency and their salaries were subsequently "frozen" to bring them in line with salaries of the local market. At the same time, a second salary scale was adopted in accordance with the FR and the SCE, applicable to staff recruited as from 1 September 1999.

The existence of the old salary scale corresponds to the necessity to maintain acquired rights for local agents employed before 1 September 1999. New recruits benefit from the new scale, which is the normal scale, and which has been revised annually, according to applicable rules, to keep it in line with the salaries paid by the best reference employers on the market. The complainant has not demonstrated that the new salary scale is not in line with local legislation.

2.3 The Ombudsman recalls that, according to consistent case law, the principle of equality and non-discrimination requires that comparable situations should not be treated differently, unless different treatment is objectively justified(4). In the present case, the Commission has not disputed the fact that, at the Delegation in Y, different salary scales are applied to remunerate local agents performing equivalent tasks, thus resulting in a difference in salary for local staff carrying out tasks of the same nature and of the same level of responsibility.

2.4 The Ombudsman notes, however, that the Court has held that the Community legislature is entitled to adopt, for the future, staff regulations which are less favourable for its staff, and that transitional measures safeguarding rights of staff recruited under an old, more favourable, scheme do not discriminate against staff recruited under a new, less favourable, scheme. Nevertheless, it is important to take care that the difference in treatment between the two categories is objectively justified(5).

In this regard, the Ombudsman notes that, according to the Commission, the objective of having two co-existing salary scales is twofold. The first objective is to put salaries back in line with local market salaries, as required by the FR and the SCE. The second objective is to comply with the legal provision that makes it illegal to link salaries to foreign currencies. It appears that, to attain these objectives, at the same time as maintaining acquired rights of staff already employed, the salaries under the old scale were converted into local currency and were temporarily "frozen". At the same time, a new salary scale was put in place, applicable to staff recruited after 1 September 1999. The salaries in the new scale were determined in accordance with the FR and the SCE and have subsequently been subject to annual revisions.

The Ombudsman considers that the Commission's explanation, which has not been rebutted by the complainant, provides a reasonable objective justification for the difference in treatment.

As regards the complainant's argument that the situation at the Delegation is contrary to local legislation, the Ombudsman has found no evidence to show that this would be the case.

In the light of the above, the Ombudsman finds no maladministration by the Commission as regards this aspect of the complaint.

3 Alleged inability to join the Pension Scheme

3.1 The complainant alleges that, due to his inferior salary situation, he was unable to join the Pension Scheme for local agents, which requires a 5 % contribution by the employee.

3.2 The Commission argues that the complainant was never denied the right to contribute to the pension fund. Instead, he decided to opt out.

3.3 Based on the Ombudsman's findings in 2.4 above, the complainant's salary situation does not appear to result from an act of maladministration by the Commission. The Ombudsman therefore does not consider that the Commission can be held responsible for the fact that the complainant considers that he lacks the financial means to join the Pension Scheme. The Ombudsman therefore finds no maladministration by the Commission as regards this aspect of the complaint.

4 The complainant’s claims

In view of the above findings, the Ombudsman considers that the complainant's claims cannot be sustained.

5 Conclusion

On the basis of the Ombudsman's inquiries into this complaint, there appears to have been no maladministration by the Commission. The Ombudsman therefore closes the case.

The President of the Commission will also be informed of this decision.

Yours sincerely,

 

P. Nikiforos DIAMANDOUROS

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(1) "A member of local staff may submit an appeal to the authority empowered to conclude contracts of employment against an act adversely affecting him within three months of the date of publication of the act if the measure is of general application, or within three months of the date of notification to the member of local staff concerned, but in no case later than the date on which the latter received such notification, it the measure affects a specified person. /.../"

(2) This article foresees salary revisions based on, among other things, the salary trend for similar posts on the local market.

(3) No complaint may be made to the Ombudsman that concerns work relationships between the Community institutions and bodies and their officials and other servants unless all the possibilities for the submission of internal administrative requests and complaints, in particular the procedures referred to in Article 90(1) and (2) of the Staff Regulations, have been exhausted by the person concerned and the time limits for replies by the authority thus petitioned have expired.

(4) See e.g. Case T-121/97, Richie Ryan v. Court of Auditors of the European Communities [1998] ECR II-3885, paragraph 87.

(5) Case 28/74, Fabrizio Gillet v. Commission of the European Communities [1975] ECR 463, and Case T-121/97, Richie Ryan v. Court of Auditors of the European Communities [1998] ECR II-3885, paragraph 98.