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EU civil servant pay row goes to court

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Published 07 January 2010

The European Commission yesterday (6 January) decided to take EU member states to court over their refusal to back a pay rise for staff at the bloc's institutions and agencies.

Commission President José Manuel Barroso won the unanimous backing of all 27 commissioners to take the case to the European Court of Justice in Luxembourg, Pia Ahrenkilde Hansen, spokeswoman for the EU executive, told journalists yesterday. 

Before Christmas, staff at the European institutions had threatened to go on strike over the bitter dispute, which was sparked by national governments' decision to block a routine salary increase for EU civil servants (EurActiv 11/12/09). 

Confirming the Commission's decision to take action before the Court of Justice, Hansen said it was now "for the court to decide" whether to annul the member states' decision. 

"We are talking here about the respect for agreed rules," the spokeswoman explained. "It is not an issue where political discretion is at play." 

Staff at the EU institutions were due to receive a 3.7% salary increase according to a formula agreed between the bloc's governments in 2004, but the Council, which represents EU member states, last year decided to reduce the pay rise to 1.85% in view of the economic crisis. 

"In the Commission's opinion, the Council has not respected the link between the annual adjustment and the evolution of purchasing power for the member states' civil servants and has not respected the Staff Regulations," Catherine Day, the EU executive's secretary-general, informed staff by email yesterday. 

"We would like to inform you that the Commission decided today to bring an action for annulment before the Court of Justice against this decision taken by the Council. In addition, it decided to authorise the Legal Service of the Commission to file this action before the Court of Justice and to ask for the application of the accelerated procedure," her message continued. 

The EU executive is expected to argue that the 3.7% increase is legally-binding according to its Staff Regulations, as previously agreed upon by EU leaders themselves. 

But with many governments slashing the salaries of civil servants at home to reduce their budget deficits in a bid to emerge from the economic crisis, they want to halve pay rises due to be awarded in Brussels too. 

"The actual amount is not the point," one national diplomat told the FT. "You simply cannot have the EU, which already has this 'gravy-train' reputation to contend with, give its staff a 3.7% pay rise this year – and certainly not while trying to push member states to cut their budget deficits." 

It is now up to the court to decide how to proceed with the matter, with a ruling on the case expected before the summer. 

Positions: 

"We want to assure the staff of all institutions and agencies – be they in Brussels or at other places of employment inside and outside the Union – that the Commission is determined to make sure that all rights and obligations of staff laid down in the Staff Regulations are respected, including the rules on salary adjustments in force," wrote European Commission President José Manuel Barroso and Vice-President Siim Kallas in a letter to staff on 23 December, announcing the EU executive's willingness to turn to the European Court of Justice. 

The European Civil Service Federation (FFPE), a trade union, wants the Court of Justice to treat the dispute as a matter of urgency, calling for the establishment of a follow-up committee to ensure that a judgement emerges within a year, before civil servants are due to be awarded their next salary increase. 

"A legal dispute of this kind, if submitted to the court, has to be resolved by the court, since there is no other means available," Francis Jacobs, a former advocate-general at the European Court of Justice, told AFP, adding that judges could be "trusted" to decide purely on legal grounds. 

"Only the EU could come up with a system in which judges and bureaucrats have the ultimate power to decide on whether to award themselves an inflation-busting pay rise in the middle of the worst recession for generations," Mats Persson, director of the Open Europe think-tank, told the Daily Telegraph, adding: "It's hard to find a clearer case of an in-built conflict of interest." 

Next steps: 
  • Before summer: Court expected to rule on dispute. 
Background: 

EU civil servants have broadly favourable terms and conditions, with good salaries, generous benefits and job security. 

The European Commission negotiates salaries on behalf of some 50,000 EU employees, including those working in the European Parliament, the European Court of Justice and the new EU diplomatic service. 

Pay rises are calculated using an agreed formula which links EU salaries to those of officials in Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Spain and the UK – some of the wealthiest and most stable members of the 27-nation bloc. This is calculated over a twelve-month period from July to July. 

Civil servants across the EU have faced pay freezes, and in some cases salary cuts, due to the deep impact of the financial crisis. 

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