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BRIEF

Complaint against the adverse decision CA/D 10/14adopted by the Administrative Co ncil o! the E ropean"atent #rganisation$ %hich$ apart !rom ! rtherimplications materiali&ed thro gh the individ alimplementation o! a series o! harm! l provisions containedin it$ had the direct and immediate e'ect o! theabolishment o! recognition o! acc m lated e(perienceprior to 1)1)*01+ !or the p rpose o! a tomaticadvancement to the ne(t higher ,and s bse- ent.hori&ontal rem neration step,s. %ithin the Complainant svalid grade at the date at %hich the decision %as made

A) 22AR3 #F FAC(i) At the President’s recommendation, in its 142nd meeting of December 2014, the Administrative Council of the P!, "ith itsdecision CA#D 10#14 ado$ted a ne", single s$ine career s%stemcom$rising 1& grades ranging from '1 (lo"est) to '1& (highestgrade) ( A55E6 7 ) his decision too* e+ect as from 1 1 201 andcom$rised a series of $rovisions, "hich "ere im$lemented at t"ostages he -rst stage began on 1 1 201 and the second stage

began on 1 & 201(ii) .n the -rst stage, decision CA#D 10#14 had the direct andimmediate e+ect that for each individual P! em$lo%ee, her#hisaccumulated e/$erience on monthl% basis ceased being ta*en intoaccount for the $ur$ose of that em$lo%ee’s advancement to thene/t higher hori ontal ste$ after ac uiring additional e/$erienceof 12 or 24 months de$ending on the em$lo%ee’s seniorit% level atthe grade assigned to her#him hat element of decision CA#D10#14 "as im$lemented directl% (i e "ithout an% su$$lementar%individual decision) as from 1 1 201 as readil% recogni edthrough ins$ection of the data sho"n in a t%$ical e/am$le (afterdeletion of $ersonal information) in A55E6 8 .n A 3 , acom$arison is made of the relevant data a+ecting an em$lo%ee’sremuneration in December 2014 and in 5anuar% 201 re$roducedin the corres$onding $a% sli$s As seen at the to$ right of the $a%

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sli$ of December 2014 ( A55E6 8 , $age 1), 10 months o! accr ed seniority at grade A4, ste$ 10 is recorded .n the $a%sli$ of 5anuar% 201 ( A55E6 8 , $age 2), the accrued seniorit% of 6mean"hile 11 months 7 is no longer recorded on the $a% sli$ as

the direct conse uence of the im$ugned decision CA#D 10#148ence, retroactive elimination of earlier recognised seniorit% too*e+ect as from 1 1 201 and that state "as 9fro en: until 5une201 ( A55E6 8 , $age ;) As $er 5ul% 201 , trans$osition too*$lace from grade A4 ste$ 10 (net salar% 10 & < 4ormer A4(2) em$lo%ees of higherseniorit% have ho"ever not been trans$osed to an% grade in thene" career s%stem as rendered clear in Article &(1) and in the

able at $age 2=#2 of Decision CA#D 10#14 ( A55E6 7 )

(iii) he de$rived automatic advancement to the ne/t higher

hori ontal ste$ as from 1 1 201 is a ma?or, but not the sole,contested element of decision CA#D 10#14 @hile the $resentCom$lainant has there through e/$erienced substantial -nancialharm, the challenged decision CA#D 10#14 grants undue -nancialbene-ts to individual members of higher management, inter aliato certain em$lo%ees involved in the design of the ne" careers%stem (cf details under $oints 1 720 of the . B , infra ) .n the

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light of such considerations, decision CA#D 10#14 should bedeemed to be at odds "ith the $rinci$le of proportionality asfrom the date it too* e+ect, vis as from 1 1 201

(iv) Due to the above and additional reasons e/$osed in detailbelo", the Com$lainant -led a Be uest for Bevie" directl% "iththe Administrative Council of the P!, "hich is the a$$ointingAuthorit% that too* the contested decision CA#D 10#14 re uestingits annulment ab initio and in toto he relevant bac*ground andthe com$elling grounds behind the re uest for the annulment of the career s%stem in the form s$eci-ed in CA#D 10#14 "eree/$osed in the res$ective re uest -led "ith the AdministrativeCouncil nfortunatel%, the Council re?ected that Be uest for

revie" for allegedl% being irreceivable "ithout an% e/amination of the merits, as communicated to the Com$lainant on 14 5ul% 201b% the Chairman of the Administrative Council ( A55E6 9 ) hedecision recited in A 3 & is :nal and ma% thus be challengedbefore the Administrative ribunal of the . ! ince, the materialgrounds submitted to the Administrative Council in su$$ort of the$resent Com$laint "ere not ta*en into consideration at all, thesame grounds are currentl% re7submitted to this ribunal, $artl%mutatis mutandis, in $art B belo" (cf $oints 1 to 2

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.nstance, vis a $ro$erl% constituted A$$eals Committee, beforehaving recourse to the Administrative ribunal of the . !

(vi) he e/$lanations recited in $art B $rovide a com$rehensiveovervie" of the relevant facts and associated grounds for theoriginal re uest for revie" and for the $resent com$laint omesu$$lementar% considerations are adduced in $arts C and D ,"hich concern $rocedural and -nancial as$ects and the relief sought through the $resent com$laint

B) Detailed Considerations

I.INTRODUCTION1. In its 127 th meeting the Administrative Council was con ronted with the !R"Roadma#

document CA$11%$11& in which a inancial anal'sis wor(ed out )' Deloitte was #resented&

while e*#loring ideas intending to ado#t a glo)al inancial scheme or the +,O that would

ensure its long term inancial sustaina)ilit'.2. -ince then& several discussions have ta(en #lace )etween the +,O Administration and the

!eads o Delegations o the Contracting -tates addressing ma or issues tac(led in

document CA$11%$11 including the re"consideration o the ,ension -cheme Regulations

or +,O sta which had )een modi ied a ter a series o contentious decisions in the 'ears

2%%7 and 2%%/. It was contem#lated to design and introduce an amended career scheme

ins#ired )' changes #er ormed in other International Organisations including the

Commission o the +uro#ean Union.0. In the case of the European Union & a !I !"3+4+3 N+ OTIATIN 5OD6 had

)een entrusted with the core wor(& which ela)orated a career reform concept ca#a)le to

meet the inancial re8uirement o the enlarged Union& while res#ecting the necessar'

level o ac8uired rights as 8uoted )elow 9 ANNEX 1 :;

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9All the members o! the Body consider that$ i! a ne% career

str ct re is introd ced$ it is vital that the !ollo%ing g arantees

be obtained E

F individual guarantees on the maintenance of income levels when thenew system is introduced and guarantees on salary increases for each

o cial up to the level of the nal step of his or her grade in the current

structure;

• overall statutory guarantees in the form of minimum percentage

promotion rates. The Body stresses that the budgetary consequences of

such guarantees must, at least, correspond to those of the current

system arising from the provisions of the ta! "egulations on automaticsalary increases by step increments and historical promotion rates, based

essentially on #turnover#;

• in accordance with the above, the new system must guarantee the

same overall

income, throughout their career, to o cials who perform well. :

he ne" s%stem in "hich 9 promotion is based on merit andper!ormance : is reGected in the ervice Begulations "hich entered into

force on 1 st Ha% 2004 A s%stem foreseeing 9 e(pected ann al

promotion rates : from *0; to

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su##osed to )e in line with the document CA$0=$1< #resented to the Council earlier in

2%1

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the +,O:& vi . the national coverage o the ?%F #ensions ad ustment adopted in

document CA/" 1#/.. accordin to established international standards . That

inancial )urden 9 rom the a)olishment o which& mainl' the host countries erman' and

The Gingdom o Netherlands #ro it: has )een as(ed to )e )orn )' the +,O& )ut inall'&

throu h the combination of decisions CA/" 1#/14 and CA/" 11/14 and throu h the

recent increases of pension contributions by more than #0 has been imposed to

E*+ staff .E. B' re8uest or management review against the u#holding o the Council s decision CA$D

1%$1< was iled directl' with the Administrative Council& )ecause that decision directl'

a ects adversel' all sta mem)ers without having to im#lement that decision individuall'

at #ersonal level. This is so& )ecause each em#lo'ee lost his$her ormer status as A"& 5"&

C"categor' em#lo'ee as rom 1.1.2%1? without involvement o an additional

administrative decision. The iled re8uest should have there ore )een deemed admissi)le

recalling inter alia the De endant s own reasoning #ut orward in document CA$?E$1 ACK .B D B.'8

7. The !I !"3+4+3 N+ OTIATIN 5OD6 o the +uro#ean Union concluded that it is

,ital to introduce guarantees on salary increases for each official up to the level of the final step of his or her grade in the current structure ”; c . #oint 0 supra. The need to

#rotect the securit' o the calculable and foreseeable income at the moment that the

-ervice Regulations are amended so as to avoid inancial hardshi# is a fundamental and

essential term of employment and hence an ac2uired ri ht . An em#lo'ee might not )e

ca#a)le to #redict how to are with his career develo#ment in the uture 9c . I3OAT H. No.

02?E& considerations 12& 1

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I3O has o)viousl' recognised the im#ortance o that undamental re8uirement and

#ointed it out in J. o. !"#! 9considerations E&/&=&1%:& i.e. that the +,O as International

Organisation has a dut' o care to ensure that an' new arrangements do not cause

inancial hardshi# to sta who entered into inancial o)ligations . In H. No. 2=

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the ul ilment o certain criteria. Thus& in H. No. 027? 9consideration /: the Tri)unal #oints

out; The reform has not had the effect of unreasonably restricting the promotion

possibilities of the officials, nor was it intended to do so . In the case of the E*+ & the

intention has howe,er been )oth to #revent the seniorit' ad ustment to the salar' o

ormer grade A

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wor( outside the +,O& an o icial might have )een a)le to achieve onl' a two" to three"

'ear recognition o accrued #ension rights at an annual rate o 2F according to the

#rovisions o Article 1% ,+N-ION R+ U3ATION- o the +,O. -uch a strong discount

results rom actuarial considerations antici#ating that a new +,O em#lo'ee would 9at

least: reach the highest seniorit' ste# in his grade #rior to retirement& which is associated

with a #redicta)l' higher end salar' 9a#art rom salar' ad ustments due to in lation: than

the o icial s salar' when the national #ension rights got trans erred. The new career

system a)olishes that guarantee o seniorit' advancement and hence reduces the real

,alue of the pension ri hts transferred from a national pensions5 system to the

#ensions s'stem o the +,O.

11. According to I3OAT H. No. 02?E 9consideration 1

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deprived the complainants of the prospect of career advancement within 0urocontrol.

They can still be promoted in either of the circumstances outlined above.”

12. >ollowing the a)ove considerations& it should )e e*amined whether or ormer grade A<

and grade A

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01.12.2%1< ul illed the merits and seniorit' criteria or such #romotion. That could or

instance concern staff members e9pectin a promotion from former rade : to

rade :7 or from rade A7 to rade A4 and su)se8uentl' )e entitled to the automatic

seniorit' ad ustment ste#s o the ne*t higher grade& who should )e #romoted on the )asis

o the services delivered and #er ormance shown )' 01.12.2%1A. 8

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1?. The principle of e2ui,alence under#inning an administrative re orm is that in practice

' staff will be assigned ' to a new generic post with its associated grade1brac*et

corresponding to the former career bracket 9H. No. 027?& consideration 7:.

1E. The #rinci#le o ood faith is seen in the #resent conte*t in that the senior o icialsres#onsi)le or the design o the new career s'stem should have made all e orts to

ensure the res#ect o the principle of e2uality . Jhen an administrative re orm relating to

the ado#tion o a new career s'stem ta(es #lace& it is the o)ligation o the A##ointing

Authorit' to ensure on one hand that legitimate individual guarantees are secured 9c .

#oint 0 a)ove: and on the other hand that no roup of officials comes to the en o'ment o

unwarranted financial ad,anta es . :oth of these oals ha,e failed . The underl'ing

#hiloso#h' o the a)ove considerations inds su##ort in I3OAT H. No. 01/= 9consideration

1%: #ointing out that “' the principle of equality would be violated by this immediate

award of an advantage to a group of officials who would not yet be in a situation

comparable to that of the officials for whom the corrective mechanism of paragraph 2 of

+ppendix (( was introduced .

17. In relation to the a)ove& the Administrati,e Council5s attention was drawn to a

com#arison o the ollowing e ects ollowing rom the transitional #rovisions #ursuant

Articles ?

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arise artificially or 'ounger management em#lo'ees& who are also #ermanent +,O

o icials& and who are trans#osed to Ho) rou#s 0 and 2 as illustrated in the ne*t

#aragra#h 1/ 9this is the e ect o Article ?< 90: Article ?? 92: o the currentl' im#ugned

decision:.

1/. "ocument CA/7-/17 9cf( ANNEX 4 re#roducing the relevant #art o document

CA/7-/17 : introduces a num)er o re8uests or review& which had )een iled in 2%10 )'

several sta mem)ers and )' elected sta re#resentatives or di erent grounds )ut

without success. One o those re8uests tac(led the #ro)lems relating to lac( o clarit' in

the wording o decision CA$D 0

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" or the second em#lo'ee & the )asic salar' amounted to 1#! 87(;# EU in "ecember

#14 and 1#!.;-(inance Committee $:>C% and of the

Administrati,e Council $AC%! these are the only :odies that can pro,ide the

necessary remedies .

It is worrisome that one o the a)ove mentioned em#lo'ees was strongl' involved in thedesign o the new career s'stem and that the inall' #ro#osed scheme in document

CA$/

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and mem)ers o the 5oards o A##eal is a rather du)ious. This is so )ecause res#ective

unreasona)l' 8uic( 2"ste# seniorit' advancements in those cases would involve the

#ersonal recommendation$decision o either 4ice",residents and the ,resident& who @

according to I3OAT Case 3aw @ have )een a##ointed according to political criteria to

those #osts& or o the Chairs o the 5oards o A##eal& which would )e an act raising issues

regarding the independence of the @embers of the :oards of Appeal( >urthermore&

rom the legal #oint o view& an accelerated 2"ste# seniorit' advancement o em#lo'ees

who had )een assigned to a single"grade )rac(et 9e.g. A? or AE: #rior to decision CA$D

1%$1< would )e tantamount to accelerated hi her deferred pension ri hts or those

em#lo'ees& who have not 'et #aid or a reasona)le length o time analogous contri)utions

to the Reserve >und or ,ensions and -ocial -ecurit' 9 >*)) :. This in turn would im#l'

undue inancial )urden to >*)) at the cost o lower ran(ed +,O o icials 9c . alsorelated arguments in I3OAT H. No. 2/7?:& which cannot )e deemed law ul 9 emphasis

added :. ( The trans#osition oreseen )' decision CA/" 1#/14 breaches in a ,ery se,ere form the

principle of e2ui,alence rom the #oint view that sta & who&prior to the reform

belon ed to the same hierarchical ran' and their )asic salaries di ered onl' due to age

seniorit'& have now )een separated by ,ertical barriers as a conse8uence o decision

CA$D 1%$1< as #er 1.1.2%1? this cannot )e deemed law ul. Directors and Bem)ers o the5oards o A##eal who had )een assigned )' #romotion$selection through com#etition to

the same single"grade )rac(et associated with ormer grade A? have )een transposed

into three new hierarchically different single s#ine grades 10& 1< and 1?. Thus& a

'ounger ormer grade A? director shall have to under o two promotion procedures in

order to )e a)le to reach the same hierarchical level as an older& ormer grade A? director

trans#osed to new grade 1?. This is nothing )ut a e3discrimination deemed unlaw ul

according to undament #rinci#les o law strictl' res#ected in countries o the +uro#ean

Union 9emphasis added :.

.L JB AC8 !> 8 PB. C.P !> PB!P!B .! A . M

1=

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7( As outlined under #oint ? a)ove& the true underl'ing reasons o the re orm are reasons o

#olitical economics. At the imitative o some Bem)er -tates& earlier given guarantees had

)een ignored and )' the Council s decision CA$D 2?$%7 a huge inancial )urden was

trans erred overnight to the +,O& which& until that decision& was a inanciall' well")alanced

International Organisation. This has indu)ita)l' )een ac(nowledged )' the financial

e9perts of "eloitte as revealed )' the ollowing 8uotation rom the minutes o the 127 th

Administrative Council& document 9c . document CA$1/$11:;",. The staff representatives said the study had confirmed that the Office's negative equity

was due mainly to shifting the cost of the tax ad ustment from the member states to the

Office . They as*ed the 3eloitte representatives what the figure would be if that had not

been done ."!. The !eloitte representatives replied that in that case the Office would indeed have no

negative equity .”

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relating to the methods o #romotions having im#lications u#on salaries meet analogous

standards. Until Octo)er 2%%7& the +,O rules o #romotions enshrined in Article

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27. The im#ugned decision CA$D 1%$1< was made on the )asis o the ,resident s #ro#osal laid

down in document CA$/

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document CA#4 #1 to re?ect the -led Be uest for Bevie" 9asirreceivable: (cf also ?usti-cation in A55E6 9 ) in a ver%su$er-cial manner he su$er-cialit% of the Council’s decision isbest reali ed b% noting that the com$lete set of documents -led

"ith the Com$lainant’s Be uest for Bevie" including -ve anne/es($resent A 3 1 to ) had not been submitted to the Councilfor decision he Administrative Council had therefore beenconfronted in its 144 th meeting in 5une 201 e/clusivel% "ith thete/t of a number re uests for revie" anne/ed to documentCA#4 #1 in incomplete and de:cient !orm 8ence, theAdministrative Council’s decision announced in $resent A55E6 9too* $lace "ithout consideration of all relevant material facts heta*ing of a harmful decision "ithout even having received allrelevant document, obviousl% constitutes a serio s proced ralviolation under established international administrative la"

(ii) he termination of counting seniorit% e/$erience month after month as from 1 1 201 , in combination "ith the $rovisions of CA#D 10#14 discussed under $oint 1& of $art B , induces the nete+ect of trans$osition to an e+ectivel% lo"er ste$ in the ne" '7grade s%stem (associated "ith a lo"er net salar%) than that of theem$lo%ee’s former grade in the 9old career s%stem:, "hich "as=!ro&en> as !rom 1)1)*01+) his sort of -nancial harm is thedirect e+ect of decision CA#D 10#14 materialised as from thebeginning of 201 "ithout the ta*ing of an% su$$lementar%individual decision he Com$lainant’s Be uest for Bevie" -led"ith the Administrative Council "as therefore dul% ?usti-ed ratiomateriae hat being so, the Administrative Council has had theobligation ( duty of care ) to e/amine all other grounds that had

been raised in the -led re uest, "hich $ointed out graveunbalances bet"een the treatments of various grou$s of em$lo%ees (the most obvious 6 but not onl% 7 being the situationof A4(2) sta+ members) and allegations regarding $otentiall%favorite treatment of certain grou$s of inGuential managementoNcials (cf $oints 1 720 supra )

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(iii) Horeover, the President’s $ro$osal submitted to the Councilas basis for decision CA#D 10#14 had been made after irregularconsultation of the 'eneral Consultative Committee ('CC) havinga com$osition of contentious legitimac% as e/$lained in $art Babove ince decision CA#D 10#14 severel% a+ects sta+ issues of all P! em$lo%ees, $ro$er consultation before the 'CC (former'AC 6 'eneral Advisor% Committee 7) should be considered as amandator% re uirement for a correct overall $rocedure accordingto established Case a" of the Administrative ribunal of the . !

D) Concl sive remar?s and the relie! so ght

he abolishment of the automatic calculation of seniorit% onmonthl% basis for the $ur$ose of advancement to the ne/t higherhori ontal ste$ in the categor% and grade assigned to the $resentCom$laint "ith e+ect as from 1 1 201 is a legitimate cause of action for challenging the Council’s decision CA#D 10#14 and thesubse uent individual decision recited in A55E6 9

he direct and individual harm caused to the $resent Com$lainantthrough decision CA#D 10#14 as from 1 1 201 ma% onl% be"aived through the successful challenging of the general measureres$onsible for that $ersonal harm, vis decision CA#D 10#148ence, the relief sought in the $resent com$laint is the fullrecognition of the Com$lainant’s ac- ired right to be entitledto the ne(t ,and s bse- ent. a tomatic hori&ontal step,s.

in the categor% and grade assigned to as $er December 2014 assoon as the a$$ro$riate seniorit% $rere uisites have been ful-lled

he loss o! that right as from 1 1 201 is a ma?or -nancial harmcaused b% decision CA#D 10#14 in direct and $ersonal mannerAbiding b% the $rinci$les underscored in I@#A J. No. 3291(Consideration ), the relief sought ma% onl% be achieved b%

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setting aside the relevant $rovisions of decision CA#D 10#148ence, the $resent Com$lainant, res$ectfull% as*s theAdministrative ribunal to - ash decision CA/D 10/14 ab initioand ensure the reestablishment o! all lost rights o! the

Complainant$ and also set aside the $ersonal (and im$ugned)decision recited in Anne/ & he Com$lainant re uests *+000E R as compensation !or moral damages for the stress andinsecurit% caused b% the ado$tion of decision CA#D 10#14 and the$a%ment of *000 E R in costs

he Com$lainant, in Hunich the ; rd of e$tember 201

Angel Rumbo AR22029

EUROPEAN PATENT OFFICE ROOM !0"

#A$ER%TRA%%E 11 &!033 MUNIC'( )ERMAN$

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