Parliament censured over pay dispute

The European Parliament has been reprimanded for "serious maladministration" because it unfairly treated its officials, depending on whether they were promoted before or after the introduction of new salary scales in 2004.

Ruling in September on a complaint made in 2008, the European Ombudsman Paraskevas Nikiforos Diamandouros also said parliament had given its own officials a financial advantage over those working for other European Union institutions, because of the way it handled the transition to the new staff regulations.

In 2010, the parliament rejected the ombudsman's recommendation that it should set out how it would correct the error. And, concluding the case on 29 September, Diamandouros said there was "no real prospect of political action by parliament that would lead the administration to change its position".

When new staff regulations were introduced in May 2004, provisions were made to bring existing employees gradually into line by using a multiplication factor based on the basic monthly salary. The complex formula included an article stating that if, after a promotion, an official's multiplication factor was less than one, they would remain in the same step of their pay grade until another promotion or a new multiplication factor was calculated.

But the parliament automatically assigned a multiplication factor of one to all officials, two years after a promotion – as long as the promotion took place subsequent to the new regulations coming into force. This was a different interpretation of the rules to that made by other EU institutions.

The complaint to the ombudsman was made by two members of staff whose last promotion was shortly before the 2004 rules were in place. That meant their multiplication factor did not automatically rise to one after two years, and therefore they were disadvantaged compared with colleagues who had been promoted to the same grade a few months later. Parliament deemed the first promotion under the new rules to be the switch-over point.

The two officials asked for their multiplication factor to be increased to one but the parliament's appointing authority rejected their request. And although the ombudsman opened an inquiry in 2009, parliament insisted there was no legal basis for the pair to be given the higher rating.

It added in its defence that by creating the two-year rule it was trying to make the transition period as short as possible. But Diamandouros could find no good reason for this in his investigation; particularly as the European Court of Auditors had said the regulations should be applied evenly across all EU institutions. The ombudsman said he was "puzzled by the parliament's unilateral decision to abstain".

Responding to the parliament's arguments, the two employees said the multiplication factor system had been devised "to ensure that all officials recruited before 1 May 2004 were gradually transferred, in an orderly and non-discriminatory way, from the old salary scale to the new one. Parliament deliberately and wilfully thwarted this purpose by deciding unilaterally to pursue the 'legitimate objective' of reducing the transitional period".

The back-and-forth continued, with parliament saying that its interpretation of the rules had been applied to 90 per cent of its staff and so there were few who remained concerned about the issue. Diamandouros said he "cannot understand or accept this argument either". He said information technology tools were available, and used by other institutions, for the recalculation of basic salaries and multiplication factors.

The ombudsman said there was no need for the parliament to recover money paid erroneously. But he concluded his inquiry by making an official 'critical remark' that parliament's practice "leads to the unfair treatment of its officials" and "gives a clear financial advantage to its officials over officials working for other EU institutions".