Strasbourg, 23 May 2008

Dear Mr X,

On 24 August 2005, you submitted a complaint to the European Ombudsman against the European Commission concerning the latter's offer to change your contractual status from local agent to contractual agent.

On 25 October 2005, I forwarded the complaint to the President of the Commission. The Commission sent its opinion on 10 March 2006. I forwarded it to you with an invitation to make observations, which you sent on 29 March 2006.

On 6 December 2006, I made proposals to the Commission for a friendly solution in your case. The Commission sent its opinion on 27 February 2007. I forwarded it to you with an invitation to make observations, which you sent on 16 March 2007.

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

I would like to apologise for the time taken to reach a final assessment in your case.

THE COMPLAINT

The complaint concerned the European Commission's offers to [occupational group A] employed as local agents to change their contractual status from local agents to contractual agents.

The complainant, a local agent working [in occupational group A] for the Commission's Representation in Munich, received an offer on 8 April 2005 to become a contractual agent. It was clear from the offer that the complainant would be placed in Function Group I, grade 1, step 1, that is, the lowest step for contract agents. The offer stated that if the complainant were to accept it, he would be appointed for a period beginning on 1 May 2005.

Having worked for the Commission for more than ten years, the complainant considered that the grading contained in the offer was not fair. He expressed his grievance in an e-mail to the Commission's Directorate-General for Administration ("DG ADMIN") on 11 April 2005, following which he received further factual information as to the new contract he had been offered. In an e-mail of 14 April 2005 to DG ADMIN, the complainant expressed his grievances again, this time emphasising that the contract offered to him would imply that he would have to pay for social insurance, such as his pension contribution. He stated that, in order to maintain his current standard of living, his grading as a contract agent would have to be Function Group I, grade 3, step 5.

On 15 April 2005, an official at DG ADMIN replied to the complainant's e-mail of 14 April 2005. She informed the complainant that, being German herself, she fully appreciated the complainant's point regarding social insurance payments. She also stated that, in light of the fact that the Commission could only offer him a contract in grade 1, step 1, she fully understood the complainant's decision not to accept the offer to become a member of the contract staff.

On 25 October 2005, the European Ombudsman opened an inquiry into the following allegations and claim:

1. It was unreasonable to make the complainant an offer of employment as a contract agent when that offer would effectively imply that the complainant would be placed in a lower salary group than his present one. He argued that the length of his work experience, as well as the nature of such experience, should have been taken into account in order to enable him to be placed in a salary group comparable to his present one.
2. It was unreasonable to make offers of employment (to the complainant himself and to other [persons in his occupational group] in Commission delegations) which would not provide for the allowances received under the existing contracts.

The complainant claimed that new offers of contract agent employment should enable him and colleagues in similar positions to maintain the standard of living they enjoyed at the time of the offer.

THE INQUIRY

The Commission's opinion

In its opinion on the complaint, the Commission made the following remarks:

Background

The complainant was a local agent working under a contract of indefinite duration at the Commission's Representation in Munich. In accordance with Article 2 of the Annex of the Conditions of employment of other servants ("CEOS"), the Commission was obliged to make an offer of employment as a contract agent before 1 May 2005.

Local agents are staff working for the Commission under private law contact, and subject to national labour laws (in the present case, German law), while contract agents are statutory personnel covered by the CEOS. The two systems are distinct and have different provisions with respect to systems of rights and obligations, allowances, grading conditions, health insurance, and so on, which are not directly comparable.

The tasks undertaken by the complainant were classified by the Commission as Function Group I tasks. The complainant was informed that he would be offered a contract at grade 1, step 1, in the contract agent system.

During March 2005, information sessions were held for all local agents working in Representation offices. During these information sessions, representatives of the Commission explained the transition to the staff concerned.

On 14 April 2005, the Commission provided the complainant with detailed information with respect to the salary levels and other benefits, such as the pension system, under the contract agent system. In turn, the complainant informed the Commission that he did not wish to receive a formal contract offer as a contract agent.

The Commission's comments on the complainant's arguments
Preliminary remark

It should first be noted that the complainant had the possibility of lodging an appeal under the provisions of Article 90 of the Staff Regulations, which applied to local staff by analogy (Administrative Note N° 110-2004/10.09.2004, footnote 2(1)). However, the complainant did not use this opportunity but complained instead to the Ombudsman.

First allegation

The Commission applied the same criteria to all local agents working in Representation offices who were covered by Article 2(1) of the Annex of the CEOS. Local agents were graded according to the grading rules laid down in Article 86(1)(iv) of the CEOS and the Commission's general implementing provisions ("GPIs") on the recruitment and use of contract agents. These rules stated explicitly that contract agents recruited in Function Group I could only be placed in the first step of grade 1, which meant that work experience gained under previous types of contracts could not be taken into account.

Second allegation

With regard to the question of allowances, the Commission emphasised that the two systems (local agent and contract agent systems) were not directly comparable. It was not possible for the Commission to grant additional allowances to staff other than those which were foreseen under Article 2(2) of the Annex of the CEOS in the respective implementing rules referred to in Article 2(3) of the Annex.

Conclusion

In light of the above, the Commission considered that the complainant's allegations and claim were unfounded.

The complainant's observations

In his observations on the Commission's opinion, the complainant maintained his complaint and made a number of additional points:

1. German employment law prohibited the offer of new employment contracts which would lead to less favourable social benefits, with respect to, for instance, insurance and leave. This had not been respected by the Commission in the present case.
2. Even if it were correct to state that contract agents engaged in Function Group I could only be recruited in the first step of grade 1 (and that therefore work experience gained under previous types of contracts could not be taken into account), an examination of the complainant's duties would clearly show that he did not belong in Function Group I, but rather in Function Group II. According to information provided by the Commission during its information sessions, the experience of staff in Function Group II would be taken into account for the purpose of their grading in the new system.
3. Even if the situation here concerned were about the "new" employment of staff (despite those staff already having worked on other types of contracts), the complainant should have been placed in Function Group II or III, given that he had university qualifications ( CEOS, Title IV, Chapter 3, Article 2b).

The Ombudsman's attempt to reach a friendly solution(2)

The Ombudsman noted that the Commission considered (i) that it was not possible for it to grant additional allowances to contract agents other than those foreseen in relevant implementing rules, and (ii) that it was within its own discretion to establish these rules and that it had decided not to do so. The Ombudsman reached a preliminary finding that this position of the Commission could be considered to constitute an instance of maladministration. He therefore made the following proposals with a view to reaching a friendly solution to the case:

The Ombudsman invites the Commission to consider

(i) adopting, pursuant to Article 2(3) of the Annex to the [CEOS], general provisions implementing Article 2(2) of the same Annex;

(ii) offering to the complainant employment of indefinite duration as a member of the contract staff;

(iii) at the same time, informing him of its general provisions implementing Article 2(2) of the above Annex.(3)

The Commission rejected these proposals.

The specific findings and points made by the Ombudsman and the Commission are referred to in the decision part below.

THE DECISION

1 Preliminary remarks

1.1 In its opinion, the European Commission argued that the complainant had had the possibility of lodging an appeal under the provisions of Article 90 of the Staff Regulations, which applied to local staff by analogy (Administrative Notice N° 110-2004/10.09.2004, footnote 2). However, the complainant had not availed of this opportunity but had instead complained to the European Ombudsman. Nevertheless, the Commission replied to the two allegations taken up for inquiry by the Ombudsman.

1.2 With regard to the Commission's above-mentioned argument, the Ombudsman took note of the Commission's position and the reference cited therein. The footnote reference made by the Commission was contained in the following part of the main text of the Administrative Notice referred to above:

"2.1. Who may make a request?

Any person subject to the Staff Regulations of officials of the European Communities, and, by analogy, temporary staff, auxiliary staff, contract staff and special advisers covered by the [CEOS], may make a request under Article 90(1) of the Staff Regulations to the appointing authority or authority empowered to conclude contracts of employment, as appropriate.

The persons referred to in the Staff Regulations are not only the serving staff listed above but also other categories such as probationers awaiting establishment, former staff, those entitled under them in the event of death and candidates in a competition [footnote reference 2(4)]".

The content of the above part of the Administrative Notice, including footnote 2, is materially restated in the part of the Notice setting out "Who may make a complaint?" (part 5, emphasis added). In both texts, the footnotes only make references to the possibility open to local agents to make requests. Taken on face value, the Administrative Notice therefore does not appear to constitute a basis for the position that local agents are entitled to submit complaints by analogy with Article 90(2) of the Staff Regulations.

The Ombudsman also pointed out that Title V of the CEOS, which is the basic legislation containing the rules on local staff, as well as the Commission's implementing provisions on local staff(5), does not appear to provide any express legal basis for the Commission's above-mentioned position. By contrast, Article 46 in Chapter 8 and Article 117 in Chapter 10 of the CEOS provide explicitly that "[t]itle VII of the Staff Regulations, concerning appeals, shall apply by analogy" to temporary and contract agents respectively.

Moreover, the Ombudsman noted that, in the present case, the complainant had expressed his grievances to the Commission's Directorate-General for Administration ("DG ADMIN") in two e-mails (dated 11 April and 14 April 2005). Furthermore, the Commission had decided to respond in full to the allegations and claim taken up for inquiry by the Ombudsman. In these circumstances, and taking into account the above-mentioned points, the Ombudsman considered it appropriate and consistent with Article 2(8) of his Statute(6) to proceed with his assessment of the merits of the complainant's allegations and claim taken up for inquiry in the present case.

1.3 In his observations on the Commission's opinion, the complainant maintained his complaint and made a number of additional points: (i) German employment law prohibited the offer of new employment contracts which would lead to less favourable social benefits with respect to, for instance, insurance and leave. This had not been respected by the Commission in the present case. (ii) Even if it were correct to state that contract agents engaged in Function Group I could only be recruited in the first step of grade 1 (and that therefore work experience gained under previous types of contracts cannot be taken into account), an examination of the complainant's duties would clearly show that he did not belong in Function Group I, but rather in Function Group II. According to information provided by the Commission during its information sessions, the experience of staff in Function Group II would be taken into account for the purpose of their grading in the new system. (iii) Even if the situation here concerned had applied to the "new" employment of staff (although those staff had already worked on other types of contracts), the complainant should have been placed in Function Group II or III, given that he had university entrance qualifications (Conditions of employment of other servants ("CEOS"), Title IV, Chapter 3, Article 82(2)(b)).

1.4 The Ombudsman considered that these points constituted, in essence, new allegations, which did not appear to have been submitted to the Commission. In this regard, the complainant did not appear to have exhausted the possibilities of internal means of redress, as required by Article 2(8) of the Ombudsman's Statute, referred to above. The Ombudsman could not therefore deal with the merits of these allegations.

2 The main issues in dispute

2.1 The complainant alleged that it was unreasonable for the Commission to make him an offer of employment as a contract agent which (i) would effectively imply that he would be placed in a lower salary group than the one he had occupied as a local agent at the time of the offer, and (ii) did not provide for the allowances he received under his existing contract. He claimed that new offers of contract agent employment should enable him and colleagues in similar positions to maintain the standard of living enjoyed by him at the time of the offer.

2.2 In its opinion, the Commission stated that it applied the same criteria to all local agents working in Representation offices who were covered by Article 2(1) of the Annex of the CEOS. Local agents were graded according to the grading rules laid down in Article 86(1) of the CEOS and the Commission's General implementing provisions ("GPIs") on the engagement and use of contract agents. These rules state explicitly that contract agents engaged in Function Group I can only be recruited in the first step of grade 1. On 14 April 2005, the Commission provided the complainant with detailed information with respect to the salary levels and other benefits, such as the pension system, under the contract agent system.

With regard to the question of allowances, the Commission emphasised that the two systems (local agent and contract agent systems) were not directly comparable because there were different systems of rights and obligations, allowances, health insurance, and so on. Relatedly, it was not possible for the Commission to grant additional allowances to contract agents other than those which, pursuant to Article 2(2) of the Annex of the CEOS, were foreseen in the respective implementing rules referred to in Article 2(3) of the same Annex.

2.3 In his observations, the complainant maintained his allegations and claim.

2.4 Article 2 of the Annex of the CEOS provides as follows:

"1. In accordance with the [CEOS], the authority referred to in the first paragraph of Article 6 of the [CEOS] shall offer employment of indefinite duration as a member of the contract staff to any person employed by the Communities on 1 May 2004 under a contract of indefinite duration as a local staff member in the European Union or by virtue of national legislation in one of the agencies and entities referred to in Article 3a(1)(b) and (c) of the [CEOS]. The offer of employment shall be based on an assessment of the tasks to be performed by the servant as a member of the contract staff. The contract concerned shall take effect at the latest on 1 May 2005. Article 84 of the [CEOS] shall not apply to such contract.

2. Should the classification of the staff member accepting the offer of a contract result in a reduction in remuneration, the institution may pay an additional amount taking into account current difference between fiscal, social security and pension legislation of the Member State of employment and the relevant provisions applicable to the contract staff member.

3. Each institution shall adopt general provisions for the implementation of paragraph 1 and 2 in accordance with Article 110 of the Staff Regulations, as necessary.

4. A staff member who does not accept the offer referred to in paragraph 1 may retain his contractual relationship with the institution."

Article 86(1) of the CEOS provides, in full:

"1. Contract staff referred to in Article 3a shall only be recruited

(i) in grades 13, 14, or 16 for function group IV,
(ii) in grades 8, 9 or 10 for function group III,
(iii) in grades 4 or 5 for function group II,
(iv) in grade 1 for function group I."

The Commission adopted GPIs on 7 April 2004(7). However, these GPIs do not contain general provisions for the implementation of Article 2(2) of the Annex of the CEOS.

2.5 In his proposal for a friendly solution, the Ombudsman noted that Article 2(2) of the Annex of the CEOS foresaw that the classification of the staff member accepting the offer of a contract might result in a reduction in remuneration, and, for that reason, the institution might pay an additional amount, taking into account the differences between fiscal, social security and pension legislation of the Member State of employment (of local staff) and the relevant provisions applicable to the contract staff member. In this regard, the Commission had remarked that local agents are staff working for the Commission under private law contact, and subject to national labour laws (in the present case, German law). The Commission also explained that contract agents were statutory personnel covered by the CEOS. Further, it emphasised that the two systems were distinct and had different provisions with respect to systems of rights and obligations, allowances, grading conditions, health insurance, and so on, which were not directly comparable. Moreover, the complainant had stated that, in order to maintain his current standard of living, his grading as a contract agent would have to be Function Group I, grade 3, step 5. However, pursuant to Article 86(1) of the CEOS, contract staff for Function Group I was recruited only in grade 1(8). More generally, the CEOS did not impose on the institutions the obligations suggested by the complainant. In light of the above, the complainant's allegations and relevant claim, to the extent they sought to oblige the Commission to offer him a contract that placed him in a salary scale comparable to his present one and providing for the allowances received under the existing (local staff) contract, did not seem to be well founded.

2.6 Nevertheless, the Ombudsman understood the allegations and claim under inquiry as referring (not only to an obligation, dealt with above, but) also to a possibility on the part of the Commission to give allowances to contract staff members which might enable them to maintain remuneration standards comparable or close to the ones they were entitled to as local staff.

Relatedly, the Commission, which appeared to have also understood the complainant's allegations and claim in the above sense, had stated that it was not possible for it to grant additional allowances to contract agents other than those foreseen in relevant implementing rules, which it had enacted pursuant to Article 2(3) of the Annex of the CEOS. This statement, read in conjunction with the lack of such implementing rules, appeared to suggest that the Commission considered that it was within its discretion to establish such rules.

2.7 The Ombudsman arrived at the preliminary conclusion that the above position did not appear to be consonant with Article 2(2) and Article 2(3) of the Annex of the CEOS, and that the contract offer to the complainant had accordingly been made under circumstances which could be deemed to amount to maladministration on the part of the Commission. The Ombudsman therefore made the above-stated proposals for a friendly solution. The Ombudsman's specific findings were the following:

Neither Article 2(2) nor 2(3) of the Annex of the CEOS says that the institutions enjoy the discretion referred to by the Commission(9). Quite to the contrary, Article 2(3) provides that "[e]ach institution shall adopt general provisions for the implementation of paragraph … 2" (emphasis added). Hence, the adoption of general provisions implementing Article 2(2) of the Annex was provided for in terms of the mandatory "shall", which normally created an obligation impervious to administrative discretion. Further, each institution will fulfil this obligation "as necessary" ("s'il y a lieu", according to the French linguistic version; "erforderlichenfalls", according to the German version). This phrase did not negate the mandatory "shall", but simply referred to the possibility identified in Article 2(2) and, thus, set out a condition for the creation of the above-mentioned obligation. Accordingly, an institution would not have to adopt such implementing provisions in the event that it did not employ local agents or the classification of staff members accepting the offer of a contract would not lead to a reduction in their remuneration. But the institution should adopt general provisions implementing Article 2(2), if its classification of staff members as contract agents would result in a reduction in their remuneration. This did not occur in the case at hand, although it seemed that the Commission could have reasonably anticipated (and, in any event, was alerted to the fact) that the classification of the complainant (and others in a similar situation, as argued by the complainant and not contested by the Commission) as contract staff would result in a reduction in remuneration. In this regard, reference must be made to the case identified in Article 2(2), namely, the case where the classification of the staff member accepting the offer of a contract would result in a reduction in remuneration. In such a case, the staff member would obviously not be able to make a well-informed decision as to whether he or she would accept the offer of a contract, without general provisions implementing Article 2(2) and referring, in particular, to how the institution would exercise its discretionary power to pay an additional amount and to what this amount might be.

2.8 In its reply to the Ombudsman's proposal for a friendly solution, the Commission provided the following information and comments:

The Commission considered that the Ombudsman's proposals for a friendly solution were not based on complete information with respect to the situation in question.

The Commission disagreed with the Ombudsman's interpretation that Article 2(3) of the Annex of the CEOS implies that the Commission must adopt GPIs with respect to Article 2(1) and 2(2) of the Annex.

Article 2(3) of the Annex contained the phrase "as necessary" in English ("s'il y a lieu" in French or "erforderlichenfalls" in German):

"3. Each institution shall adopt general provisions for the implementation of paragraph 1 and 2 in accordance with Article 110 of the Staff Regulations, as necessary."

The Commission considered that Article 2(3) should be read together with Article 2(2), which states that:

"2. Should the classification of the staff member accepting the offer of a contract result in a reduction in remuneration, the institution may pay an additional amount taking into account current difference between fiscal, social security and pension legislation of the Member State of employment and the relevant provisions applicable to the contract staff member" (emphasis added).

The use of the word "may" (or "a la faculté" in French or "kann" in German) clearly demonstrated the legislator's intention for such measures to be optional, and at the discretion of the institution concerned. The Commission duly considered the need for such implementing provisions, and concluded that this measure was not necessary for the particular case of Local Agents working in Representations, as explained below.

The Commission noted that it had in fact adopted implementing provisions in accordance with Article 2(3) of the Annex of the CEOS. These implementing provisions (C(2005)1287) lay down the limits and scope of the measures taken by the Commission to apply Articles 2(1) and 2(2) of this Annex. However, the category of Local Agents working in Representations was not covered by these GPIs. The question of whether or not similar measures should be taken for Local Agents working in Representations was the subject of consultation meetings between the Commission and its Staff Representatives. The outcome of this consultation, which took place at the level of political consultation with Vice-President Kallas, was that the Commission decided that it was not necessary to adopt GPIs for Local Agents working in Representations. The Commission attached the minutes of this political consultation to its reply on the friendly solution proposal.

As regards parts (ii) and (iii) of the Ombudsman's friendly solution proposal, the Commission's approach to these questions (whether or not the Commission should adopt GPIs for all staff covered by Article 2 of the Annex of the CEOS) was accordingly considered extremely carefully. Evidence of this careful consideration was demonstrated by the extensive consultations with Staff Representatives. The Commission's view that it applied a balanced approach was confirmed by the fact that it was possible to reach agreement with the staff unions on it. Thus, the Commission considered that it would be inappropriate now to change position and to adopt GPIs.

Furthermore, all measures foreseen under Article 2 of the Annex had to be taken before 1 May 2005. The question of the legal basis of a Commission decision to apply these rules retroactively almost two years later could also be raised.

Given the additional elements mentioned above, the Commission did not consider that it was in a position to follow the Ombudsman's suggestion for a friendly solution.

2.9 In relation to the above proposal for a friendly solution and the Commission's reaction thereto, the Ombudsman makes the following points.

2.10 The Commission has interpreted Article 2(2) and 2(3) of the Annex in a way that leads to the conclusion that it did not violate the Article 2(3), since it was not obliged to enact general provisions implementing Article 2(2). The Ombudsman adopted a different approach in his friendly solution proposal, which was not accepted by the Commission.

2.11 The formulation of Article 2(3) creates considerable legal uncertainty as to its exact meaning, namely, as to whether the institution would be obliged to adopt general provisions implementing Article 2(2) in circumstances like the ones of the case at hand. After taking into account the Commission's legal argumentation, presented in its reply to his friendly solution proposal, and the fact that the Community Courts do not appear to have specifically addressed the above issue, the Ombudsman takes the view that the Commission's approach adopted in relation to the aforementioned legal problem is reasonable. This is the case even though it may not reflect the only reasonable interpretation of Article 2(3), as shown by the Ombudsman's analysis in his friendly solution proposal in this case. Under these circumstances, and in light of his remarks in point 2.5 above, the Ombudsman reaches the conclusion that there has been no maladministration on the part of the Commission in the present case.

3 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) "Where the rules governing the conditions of employment so provide, local staff may make requests to the appropriate authority in the same way as officials. However, disputes between local staff and an institution cannot be brought before the Court of First Instance or the Court of Justice of the European Communities: they must first be referred to the competent court in accordance with the laws in the place where the servants perform his duties. (Article 122 of the Conditions of Employment)".

(2) Article 3(5) of his Statute directs the Ombudsman to seek, as far as possible, a solution with the institution concerned to eliminate the instance of maladministration and satisfy the complainant.

(3) The Ombudsman notes that (i) as argued by the complainant and not contested by the Commission, there are also other staff members in a situation similar to the complainant's; and (ii) provisions implementing Article 2(2) of the Annex are, in any case, necessary in order to ensure that the power foreseen thereby is to be exercised in a non-arbitrary way (cf. Case T-156/95 Brigaldi and others v Commission [1997] ECR-SC I-A-171 and II-509, paragraph 53). In light of the above, the Ombudsman does not deem it appropriate, in the context of a friendly solution proposal, simply to invite the Institution to consider making a new contract offer to the complaint and providing him with information on what additional amount (if any) it would be willing to pay, if the offer were accepted.

(4) Footnote 2 in the cited document provides as follows: "Where the rules governing their conditions of employment so provide, local staff may make requests to the appropriate authority in the same way as officials. However, disputes between local staff and an institution cannot be brought before the Court of First Instance or the Court of Justice of the European Communities: they must be referred to the competent court in accordance with the laws in the place where the servant performs his duties. (Article 122 of the Conditions of employment)."

(5) Points 7.4 - 7.4.1 of the Commission's A-Z index of its implementing provisions on its intranet site, 'intracomm'.

(6) "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."

(7) "General implementing provisions on the procedures governing the engagement and the use of contract staff at the Commission", Brussels 07/04/2004, C(2004) 1313 (entered into force on 1 May 2004 and amended on 27 July 2004 (C(2004) 2862).

(8) The Ombudsman recalls that the issue of whether the complainant should have been classified in another function group, which was raised by the complainant for the first time in his observations, does not fall within the scope of the present inquiry and is not examined in the present decision (see points 1.3 and 1.4 above).

(9) The objective of Article 2(2) is to give to the institution concerned the power to decide, on a case-by-case basis, after taking into account the factors specified in the same paragraph and in application of the relevant implementing provisions, whether it would pay an additional amount of money, as an offset for the financial burdens and losses that the new contractual situation of a specific staff member would entail (cf. Case C-70/91 P Council v Brems [1992] ECR I-2973, paragraphs 16-17). The institution's failure to exercise this discretionary power would amount to an instance of maladministration.