Re Employees of the Consiglio Nazionale delle Ricerche (National Research Council): E.C. Commission v Italy (Case 225/85)

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1 Re Employees of the Consiglio Nazionale delle Ricerche (National Research Council): E.C. Commission v Italy (Case 225/85) Before the Court of Justice of the European Communities ECJ (Presiding, Galmot P.C.; Kakouris and Schockweiler PP.C.; Koopmans, Bosco, Everling and Moitinho de Almeida JJ.) Herr Carl Otto Lenz, Advocate General. 16 June 1987 Action for A Declaration under Article 169 EEC. Employment. Nationality discrimination. Public service. Restriction of access to posts in the public service to local nationals pursuant to Article 48(4) EEC does not depend on the status of civil servant or on the legal relationship between the employee and the national administration, but upon the fact that the employee is responsible for exercising powers conferred by public law or for safeguarding the general interests of the State. In the case of research scientists generally, only the duties of management or of advising the State on scientific and technical questions could be described as employment in the public service for the purposes of Article 48(4). [8]-[9] The Court interpreted Article 48(2) & (4) EEC and Article 7(1) & (4) of Regulation 1612/68 in the context of Italian legislation granting established status or equivalent to research workers under contract at the National Research Council but only if they possessed Italian nationality, to the effect that such discrimination against nationals of other member-states was discriminatory, was too broad to come within the public service exception in Article 48(4) and therefore was unlawful. Representation Enrico Traversa, of the Legal Department of the E.C. Commission, for the applicant Commission. Luigi Ferrari Bravo, Head of the Department for Contentious Diplomatic Affairs,

2 assisted by Oscar Fiumara, Avvocato dello Stato, for the defendant State. The following cases were referred to in the judgment: 1. Lawrie-Blum v. Land Baden-Württemberg (66/85), 3 July 1986: [1987] 3 C.M.L.R Gaz:66/85 * Re Public Employees (No. 1) E.C. Commission v. Belgium (149/79), 17 December 1980: [1980] E.C.R. 3881, [1981] 2 C.M.L.R Gaz:149/79 3. Sotgiu v. Deutsche Bundespost (152/73), 12 February 1974: [1974] E.C.R Gaz:152/73 The following further case was referred to by the Advocate General: 4. Re French Nurses: E.C. Commission v. France (307/84), 3 June 1986: [1987] 3 C.M.L.R Gaz:307/84 The following additional cases were referred to in argument: 5. Re French Merchant Seamen: E.C. Commission v. France (167/73), 4 April 1974: [1974] E.C.R. 359, [1974] 2 C.M.L.R Gaz:167/73 6. The State v. Royer (48/75), 8 April 1976: [1976] E.C.R. 497, [1976] 2 C.M.L.R Gaz:48/75 7. The State v. Watson and Belmann (118/75), 7 July 1976: [1976] E.C.R. 1185, [1976] 2 C.M.L.R Gaz:118/75 8. Donà v. Mantero (13/76), 14 July 1976: [1976] E.C.R. 1333, [1976] 2 C.M.L.R Gaz:13/76 TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE Opinion of the Advocate General (Herr Carl Otto Lenz) A. The facts The facts of the infringement proceedings with which I am to deal today are as follows: On 20 March 1975 the Italian Republic issued Act 70 on new rules relating to public corporations and the terms of employment of staff. It is provided among other things in section 36(3) and (4) of that Act that persons employed under contract by the Consiglio Nazionale delle Ricerche (CNR) who have the requisite qualifications and fulfil the prescribed requirements should be given established posts. If that should not be possible owing to a lack of posts, the staff concerned should be kept on under contracts for an indefinite period and receive the remuneration laid down for the corresponding established posts. Section 5(3) of Act 70 refers to the legal rules in force in the civil service with regard to recruitment requirements. Those rules include the provisions of the Staff Regulations for Civil Servants, regulation 2 of which provides that Italian nationality is a requirement for appointment as a civil servant.

3 *637 Under Order 82 of 1 March 1945, taking the place of an Act, the CNR is an autonomous government agency having legal personality and answering to the President of the Council of Ministers. It is responsible, inter alia, for the coordination of the activities of the State in the various scientific fields, for drawing up technical standards, compiling bibliographic and documentary material and for conducting research of its own. Where necessitated by particular requirements of scientific research, the CNR may under section 36(1) of Act 70 of 1975 recruit foreign staff for advanced research under contract; however, the maximum duration of such contracts is five years. To date, the provisions of section 36(3) and (4) of Act 70 have not been applied to foreign researchers working for the CNR; in the view of the Italian authorities, such workers, being foreign nationals, were not entitled to be established. Instead, the researchers in question continued to be employed on contracts of limited duration. In 1981 the CNR attempted to maintain in employment researchers from other member-states of the Community at least on the basis of contracts of indefinite duration; however, that came up against resistance on the part of the supervisory bodies, which maintain that Italian nationality was also a requirement in the case of contracts of indefinite duration. In 1983 a number of researchers brought an action against the CNR before the Tribunal Amministrativo Regionale (Regional Administrative Court) of Lazio following the conclusion of new employment contracts for a limited period. Those actions were dismissed. One researcher appealed to the Consiglio di Stato (Council of State); the appeal is still pending. The fact that researchers who are nationals of other member-states are not established has a series of consequences as far as they are concenred. In the first place, their posts are less secure than those of their Italian colleagues, since the contracts of employment concluded with them from time to time are only for a limited period. Secondly, they cannot be promoted since participation in the competitions leading to promotion is restricted to Italian nationals. However, it has not been possible to establish definitely whether there is also discrimination with regard to remuneration, since it has not been made absolutely clear what is meant by 'ricostruzione della carriera' (career rebuilding) which is alleged to have given rise to a difference in remuneration. In view of this state of affairs the E.C. Commission has brought an action for failure to fulfil its obligations against the Italian Republic. It considers that the contested rules infringe the prohibition of discrimination set out in Article 48 EEC and Article 7 of Council Regulation 1612/68 *638 on freedom of movement for workers within the Community. Since the defendant complied neither with the Commission's letter of 2 August 1984 putting it on formal notice nor with its reasoned opinion issued under Article 169 EEC on 18 March 1985, the Commission brought this action before the Court of Justice. The Commission claims that the Court should (a) Declare that by discriminating, as regards conditions of work and

4 employment, against researchers working for the Consiglio Nazionale delle Ricerche who are nationals of other member-states in favour of researchers of Italian nationality working for that same body, the Italian Republic has failed to fulfil its obligations under Article 48 of the EEC Treaty and Article 7(1) and (4) of Council Regulation 1612/68 of 15 October 1968; (b) Order the Italian Republic to pay the costs. In its defence the Italian Republic does not formally contest the Commission's claims. It merely points out that the researchers concenred have been kept on under contracts for a limited period and that their remuneration corresponds to that of researchers holding established posts. For the rest, efforts are being made to enable established posts to be given to the researchers in question. Consequently the action is unnecessary. The Italian Republic repeats this assertion in the rejoinder where it also points out that the Italian Government has prepared a Bill designed to enable researchers who are nationals of other member-states to be given established posts. In the rejoinder, however, the Italian Republic claims that the Court should dismiss the application and order the applicant to pay the costs. In the course of the oral proceedings the Italian Republic substantiated its claim that the application should be dismissed. It referred to the tasks of the CNR and maintained that the employment contracts of the researchers in question do not fall within the scope of Article 48 EEC as a result of the exception provided for in Article 48(4), which stipulates that Article 48 is not to apply to employment in the public service. Officials employed by the CNR might reach the highest positions in that agency, which served the general interest of the State. Consequently, there was justification for requiring those officials to be of Italian nationality. In so far as it is necessary, I shall consider the parties' other arguments in the body of my Opinion; for the rest, reference is made to the Report for the Hearing. B. Opinion In the light of the findings made in the written and oral procedures it appears that researchers who are nationals of other *639 member-states are treated differently from Italian researchers in at least two respects: Their employment relationship is governed by contracts concluded for a limited period and is therefore less secure than the employment situation of researchers of Italian nationality. In addition, they are disqualified from taking part in the competitions which must be passed in order to be promoted. It must first be considered whether the prohibition of discrimination set out in Article 48(2) EEC is applicable to the researchers from other member-states of the Community or whether the researchers' posts at the CNR must be regarded as employment in the public service and hence the prohibition of discrimination set out in Article 48(2) EEC does not apply as a result of Article 48(4). It must be observed in that connection that, according to the Court's judgment of 12 February 1974 in Case 152/73, [FN1] the scope of the exception set out in Article 48(4) EEC cannot be determined by the nature of the legal relationship

5 between the employee and the employing administration. As the Court has recently held in its judgment of 3 June 1986 in Case 307/84, [FN2] access to certain posts cannot be limited by reason of the fact that in a given member-state the persons appointed to such posts are governed by staff regulations which provide for establishment. To make the application of Article 48(4) EEC dependent upon the legal nature of the relationship between the employee and the administration would enable the member-states to extend at will the number of posts covered by the exception laid down in that provision and hence to determine the scope of Community law unilaterally. That might result in a particular activity's being subject to different rules in different member-states by virtue of Article 48 EEC; that cannot be permitted under Community law. FN1 Sotgiu v. Deutsche Bundespost: [1974] E.C.R FN2 E.C. Commission v. France: [1986] E.C.R. 1725, [1987] 3 C.M.L.R As the Court stated in particular in Case 149/79, [FN3] in examining whether particular activities fall within the ambit of employment in the public service within the meaning of Article 48(4), it must be considered 'whether or not the posts in question are typical of the specific activities of the public service in so far as the exercise of powers conferred by public law and responsibility for safeguarding the general interests of the State are vested in it'. In its judgment of 3 July 1986 in Case 66/85, [FN4] in which the Court adhered to the wording quoted above from the judgment in Case 149/79, it was held that both the said conditions, namely the exercise of powers conferred by public law and the discharge of functions, whose purpose is to safeguard the general interests of the State, must be present at the same time, the national court having expressed the *640 view that it would be sufficient if only one of the two conditions were to be fulfilled. FN3 E.C. Commission v. Belgium: [1980] E.C.R. 3881, [1981] 2 C.M.L.R FN4 Lawrie-Blum v. Land Baden-Württemberg: [1987] 3 C.M.L.R During the oral proceedings the Italian Republic argued on the grounds of the rôle played by the CNR that researchers working for it fell within the exception provided for in Article 48(4) EEC. That view cannot be accepted, since the rôle of a public body is not sufficient evidence in itself that all its staff are involved in the exercise of powers conferred by public law and in the discharge of functions whose purpose is to safeguard the general interests of the State. Granted, the administrative organs and higher echelons of the CNR may be responsible for such tasks; however, the Italian Republic did not contest the Commission's claim that the researchers concerned are actually engaged in research work. In particular, the Italian Republic has not shown that the researchers in question are responsible for management duties in the laboratories or for advising the Stte on scientific questions. Furthermore, one cannot dismiss the Commission's argument that it is possible to infer from the

6 fact that the researchers had already been employed by the CNR for some time that the Italian Republic impliedly admits that the general interests of the State or exclusive tasks of the public authorities are not involved in this case. Furthermore, according to the case law of the Court no case for the applicability of Article 48(4) can be based on the argument that researchers from other member-states would, if established, qualify under national law for promotion to the highest echelons of the CNR. The Court has already rejected that argument in its judgment of 17 December 1980 in E.C. Commission v. Belgium. [FN5] According to that judgment the exception provided for in Article 48(4) as regards employment in the public service applies only to certain posts in the public service, not to the public service as a whole. FN5 Loc cit. at para. [20] et seq. Accordingly the posts at the CNR fall in principle within the scope of the prohibition of discrimination set out in Article 48(2) EEC. If researchers who are nationals of other member-states are placed in a worse position than national research workers in the manner described solely on account of their nationality, this constitutes an infringement of the prohibition of discrimination. That finding is not upset by the fact that the researchers in question have so far been kept on under contracts for a limited period, since they have not been employed on terms which correspond in all respects to the terms of employment as officials which are restricted to Italian nationals. It should therefore be held that, by discriminating, as regards conditions of work and employment, against researchers working for the Consiglio Nazionale delle Ricerche who are nationals of *641 other member-states in favour of researchers of Italian nationality working for the same body, the Italian Republic has failed to fulfil its obligations under Article 48(2) of the EEC Treaty and Article 7(1) and (4) of Council Regulation 1612/68. C. Conclusion On those grounds I propose that the Court should uphold the application and order the Italian Republic to pay the costs. JUDGMENT [1] By an application lodged at the Court Registry on 23 July 1985 the E.C. Commission brought an action under Article 169 EEC for a declaration that by discriminating, as regards conditions of work and employment, against nationals of other member-states working for the Consiglio Nationale delle Ricerche (National Research Council, hereinafter referred to as 'the CNR') in favour of researchers of Italian nationality working for that body, the Italian Republic has failed to fulfil its obligations under Article 48 EEC and Article 7(1) and (4) of Council Regulation 1612/68 on freedom of movement of workers within the Community. [2] Section 36(3) of Italian Act 70 of 20 March 1975 [FN6] provides that staff

7 employed under contract by the CNR on the date of that Act's entry into force (3 April 1975) are to be appointed to established posts provided that they have the requisite qualifications and fulfil the prescribed requirements. Section 36(4) provides that, in the absence of established posts, staff employed under contract are to continue to be engaged for an indefinite period and to receive the same remuneration as established staff of the corresponding level. In both cases 'account shall be taken of previous years of service for the purpose of calculating periodical increases in salary'. FN6 G.U.R.I. 2 April [3] In addition, section 5(3) of Act 70 refers to the 'legal rules in force in the civil service with regard to recruitment requirements'. These include the provisions concerning the regulations for civil servants, [FN7] section 2 of which provides that: 'Any person who satisfies the following general conditions may be appointed a civil servant: (1) possession of Italian nationality...'. FN7 Decreto del Presidente della Repubblica No. 3 of 10 January 1957, G.U.R.I., ordinary supplement to Gazzetta Ufficiale 22 of 25 January [4] The Commission, considering that the above-mentioned nationality requirement for researchers applying for established posts (or, where such posts are temporarily unavailable, for continued employment for an indefinite period) was contrary to Article 48 of the Treaty and to Regulation 1612/68, brought this action against the Italian Republic for failure to fulfil its obligations. *642 [5] Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court. [6] The first question raised by this application is whether researchers' posts at the CNR are to be regarded as being 'employment in the public service' to which the rule prohibiting discrimination set out in Article 48(2) EEC does not apply by virtue of Article 48(4). [7] In deciding this question it must be borne in mind that, as a derogation from the fundamental principle that workers in the Community should enjoy freedom of movement and not suffer discrimination, Article 48(4) must be construed in such a way as to limit its scope to what is strictly necessary for safeguarding the interests which that provision allows the member-states to protect. [8] As the Court has already stated, most recently in Case 66/85, Lawrie-Blum v. Land Baden-Württemberg, [FN8] access to certain posts may not be limited by reason of the fact that in a given member-state persons appointed to such posts have the status of civil servants. To make the application of Article 48(4) dependent on the legal nature of the relationship between the employee and the administration would enable the member-state to determine at will the posts covered by the exception laid down in that provision.

8 FN8 [1987] 3 C.M.L.R [9] It must be held that the conditions defined in the Court's case law, in particular in the judgment of 17 December 1980 in Case 149/79, E.C. Commission v. Belgium, [FN9] which a post must satisfy in order for it to be regarded as employment in the public service within the meaning of Article 48(4) EEC are not fulfilled in this case. Simply referring to the general tasks of the CNR and listing the duties of all its researchers is not sufficient to establish that the researchers are responsible for exercising powers conferred by public law or for safeguarding the general interests of the State. Only the duties of management or of advising the State on scientific and technical questions could be described as employment in the public service within the meaning of Article 48(4). However, it has not been established that those duties were carried out by CNR researchers. FN9 [1980] E.C.R. 3881, [1981] 2 C.M.L.R [10] As to the Italian Government's argument that if foreign researchers were to become part of the CNR's permanent staff, it would not be possible to deny them access, by promotion, to the higher managerial posts of that body, it is sufficient to point out that Community law does not prohibit a member-state from reserving for its own nationals those posts within a career bracket which involve participation in the exercise of powers conferred by *643 public law or the safeguarding of the general intersts of the State. However, as the Court has already stated in the Belgium judgment of 17 December 1980, cited above, the possibility that nationals of other member-states might be excluded from promotion or transfer to certain posts must not have the effect of debarring them generally from posts which are not in the public service within the meaning of Article 48(4) of the Treaty. [11] Furthermore, as the Court held in Case 152/73, Sotgiu v. Deutsche Bundespost, [FN10] even if employment in the public service within the meaning of Article 48(4) is involved, that provision cannot justify discriminatory measures with regard to remuneration or other conditions of employment against workers from other member-states once they have been admitted to the public service. FN10 [1974] E.C.R [12] It therefore falls to be determined whether the non-application of the provisions of the aforementioned Italian Act 70 [to non-italians] constitutes discrimination contrary to Article 48(2) of the Treaty and to Article 7(1) and (4) of Regulation 1612/68. [13] In this regard it must be observed that the situation of researchers who are nationals of other member-states is discriminatory by comparison with that of Italian researchers, particularly as regards job security, since they are employed by the CNR under contracts of limited duration and they have no guarantee that those contracts will be renewed. Moreover, it must be noted that the fact that researchers who are nationals of other member-states have no career structure

9 makes it impossible for them to move to higher grades and has an impact on their pay and retirement pensions. Consequently, those researchers do not enjoy a system entailing advantages and guarantees equivalent to those deriving from the status reserved for Italian nationals. [14] In those circumstances, it must be held that by discriminating, as regards conditions of work and employment, against researchers working for the Consiglio Nazionale delle Ricerche who are nationals of other member-states in favour of researchers of Italian nationality working for that body, the Italian Republic has failed to fulfil its obligations under Article 48 of the EEC Treaty and Article 7(1) and (4) of Council Regulation 1612/68. Costs [15] Under Article 69(2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs. Since the Italian Republic has failed in its submissions, it must be ordered to pay the costs. Order On those grounds, THE COURT hereby: 1. Declares that by discriminating, as regards conditions of work and employment, against researchers working for *644 the Consiglio Nazionale delle Ricerche who are nationals of other member-states in favour of researchers of Italian nationality working for that body, the Italian Republic has failed to fulfil its obligations under Article 48 of the EEC Treaty and Article 7(1) and (4) of Council Regulation 1612/ Orders the Italian Republic to pay the costs. (c) Sweet & Maxwell Limited END OF DOCUMENT

Ingetraut Scholz v. Opera Universitaria de Cagliari and Cinzia Porcedda (Case C-419/92) Before the Court of Justice of the European Communities ECJ

Ingetraut Scholz v. Opera Universitaria de Cagliari and Cinzia Porcedda (Case C-419/92) Before the Court of Justice of the European Communities ECJ (Presiding, Due C.J.; Mancini, Moitinho de Almeida and