VP v Cedefop (Civil service - Request for renewal of a contract for an indefinite period - Judgment) [2020] EUECJ T-187/18 (16 December 2020)

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(Civil service – Members of the temporary staff – Request for renewal of a contract for an indefinite period – Decision not to renew – Manifest error of assessment – Right to be heard – Article 26 of the Staff Regulations – Liability – Material damage – Non-material damage)

European Centre for the Development of Vocational Training (Cedefop), represented by M. Brugia, acting as Agent, and by T. Bontinck and A. Guillerme, lawyers,

Application under Article 270 TFEU for (i) annulment of Cedefop’s decision of 12 May 2017 not to renew the applicant’s contract as a member of the temporary staff for an indefinite period and, as far as necessary, of the decision of 1 December 2017 rejecting her complaint of 9 August 2017 against the decision of 12 May 2017 and (ii) compensation for the material and non-material damage which the applicant allegedly suffered as a result of those decisions,

composed of A. Marcoulli, President, S. Frimodt Nielsen and C. Iliopoulos (Rapporteur), Judges,

1 The European Centre for the Development of Vocational Training (Cedefop) was established by Regulation (EEC) No 337/75 of the Council of 10 February 1975 (OJ 1975 L 39, p. 1). The version of Regulation No 337/75 which applies to the present case is that resulting from Council Regulation (EC) No 2051/2004 of 25 October 2004 amending Regulation No 337/75 (OJ 2004 L 355, p. 1).

‘1. The Director shall be responsible for the management of the Centre and shall implement the decisions of the Governing Board and the Bureau. He shall be the legal representative of the Centre.

2. He shall prepare and organise the work of the Governing Board and the Bureau and provide the secretariat for their meetings.

4. He shall be responsible for all staff matters and for engaging and dismissing staff.

‘The staff of the Centre shall be subject to the regulations and rules applicable to the officials and other servants of the European Communities.

The Centre shall exercise, in respect of its staff, the powers devolved to the appointing authority.

The Governing Board shall, in agreement with the Commission, adopt the appropriate implementing rules.’

4 Article 26 of the Staff Regulations of Officials of the European Union (‘the Staff Regulations’), applicable to members of the temporary staff pursuant to Article 11 of the Conditions of Employment of Other Servants of the European Union (‘the CEOS’), as amended, inter alia, by Regulation (EU, Euratom) No 1023/2013 of the European Parliament and of the Council of 22 October 2013 (OJ 2013 L 287, p. 15), provides that:

(a) all documents concerning his administrative status and all reports relating to his ability, efficiency and conduct;

Documents shall be registered, numbered and filed in serial order; the documents referred to in subparagraph (a) may not be used or cited by the institution against an official unless they were communicated to him before they were filed …’

‘For the purposes of these Conditions of Employment, “temporary staff” means:

‘(f) staff engaged to fill a post which is included in the list of posts appended to the section of the budget relating to an agency as referred to in Article 1a(2) of the Staff Regulations and which the budgetary authorities have classified as temporary, except heads of agencies and deputy heads of agencies as referred to in the Union act establishing the agency and officials seconded in the interests of the service to an agency.’

‘Temporary staff to whom … Article 2(f) applies may be engaged for a fixed or indefinite period. The contracts of such staff who are engaged for a fixed period may be renewed not more than once for a fixed period. Any further renewal shall be for an indefinite period.’

‘Apart from cessation on death, the employment of temporary staff shall cease:

8 The internal note from the Director of Cedefop of 30 October 2013, entitled ‘Timelines for information about renewal of contracts’, states the following:

‘Our practice to date has been to inform staff members 6 months before the expiry of their contract about the renewal or non-renewal of their contract. This timeframe is based on the provisions of Article 47(ii) of the [CEOS], which stipulates that temporary agents who are in their second contract have to give up to six months’ notice to Cedefop.

Given the time required for staff to find new employment if their contract is not renewed, it is recommended, as a matter of good practice and whenever possible, to inform staff 9 months in advance (but 6 months in advance at the latest). The [Department of Human Resources] will adjust the timing for the initiation of the renewal procedure accordingly.’

9 The applicant, VP, was recruited by Cedefop on 16 November 2007 as a member of the temporary staff to perform the duties of ‘Legal Advisor’ of Cedefop for an initial period of five years. Her contract was renewed on 16 November 2012 for five years and thus expired on 15 November 2017. The applicant’s contract was governed by Article 2(f) of the CEOS.

10 On 30 January 2017, the Deputy Director of Cedefop (‘the Deputy Director’), acting in her capacity as the applicant’s line manager and reporting officer, recommended to the authority empowered to conclude contracts of employment (‘the AECE’), the Director of Cedefop (‘the Director’), that the applicant’s expiring contract be renewed with effect from 16 November 2017. In support of that recommendation, the Deputy Director submitted a very positive appraisal report of the applicant’s work and professional performance.

11 On 14 February 2017, having been informed by the Deputy Director that the Director had not signed the decision to renew her contract and that he was considering abolishing Cedefop’s Legal Service altogether, the applicant requested a meeting with the Director and the Deputy Director. Following that request, the Director invited the applicant to a meeting on the same day. Despite requests from the applicant and the Deputy Director to that effect, the Director did not allow the Deputy Director or any third party to attend that meeting. At that meeting, the Director informed the applicant that he was considering a restructuring of the administration and, more specifically, the discontinuance of the Internal Legal Service and that, with that in mind, he was considering not renewing her contract.

12 By email to the applicant at 19.25 on the same day, copied to the Deputy Director, the Director described the content of the meeting in the following terms:

‘We discussed the future of the Legal Service today and I have informed you that owing to financial and human resource pressures on Cedefop’s operations that I believe that it is in the interest of the organisation to consider not renewing your contract.

I was very disturbed at your comments that you plan to use your legal network to place pressure on me, that you intend to sue me personally to embarrass me and Cedefop and to work to prevent the renewal of my contract.

Unfortunately, there was no one there to record our discussion. I can certainly understand if you are unhappy and even angry with my decision. However, staff should always be aware that their interest must be balanced with the general interest of [Cedefop]. People also say things in the heat of the moment. However, your comments in my view cannot be otherwise interpreted but as threats and intimidation. I would not wish to make the mistake of misunderstanding your meaning.

Consequently, I am asking you to clarify, in writing, if I have understood correctly what you said to me …’

13 By email sent to the Director on the same day at 19.51, the applicant also summarised the content of the meeting of 14 February 2017 and expressed her surprise at the Director’s decision to abolish the Internal Legal Service, in view of the essential role of that service within Cedefop. The Deputy Director and the Director of the Human Resources Department of Cedefop (‘the Director of the Human Resources Department’) were copied in on that email.

14 By email of the same day at 20.49, in response to the Director’s email of 19.25, the applicant reiterated the content of the meeting described in her previous email of 19.51 and denied having threatened the Director by explaining, in essence, that she had ‘simply stated’ that she ‘would use all procedural and legal means available to [her] as [a] long-standing lawyer and legal expert who has a myriad of personal and professional acquaintances who happen to be lawyers and EU experts too’.

15 By email of 15 February 2017, sent to the Director at 11.18, the Director of the Human Resources Department, following up on the applicant’s email sent the previous day at 19.51, stated that it was unprecedented for the Human Resources Department not to have been consulted on a staff matter with such wide-ranging legal and organisational implications. Specifically, she stated that ‘[Human Resources] and the legal department are the only competent functions in this respect, and since the Legal Adviser is directly concerned, the consultation of [Human Resources] is surely essential’. Furthermore, she stated that meetings where such sensitive matters are discussed should be held in the presence of third parties to preserve the rights of all parties concerned and that it was regrettable that the applicant’s repeated requests were not heeded. Second, she noted that, since the applicant’s performance was consistently rated as high, an automatic renewal is the norm and that, therefore, there is no discretionary power for the Director as AECE. Finally, she concluded that the interest of the service was unequivocally in favour of maintaining the Legal Service within Cedefop.

16 By email of 15 February 2017 sent to the Director at 14.43, the Deputy Director fully supported the analysis of the Director of the Human Resources Department, stating (i) that the applicant’s contract for the position of Legal Advisor should be considered automatically renewable given the documented consistently excellent performance of the jobholder and (ii) that she strongly disagreed with the Director’s intention to abolish the Legal Service and to terminate the applicant’s contract, in the absence of any solid arguments in support of such a radical and sensitive decision which risks negatively impacting Cedefop’s functioning and reputation.

17 By email of 15 February 2017 sent to the Director at 18.03, the six Heads of Department of Cedefop expressed their concern that the Director was considering the possibility of abolishing the Internal Legal Service and requested a meeting on this matter.

18 By email of 15 February 2017, at 20.21, the Director replied to the email from the Director of Human Resources, writing, inter alia, that he had never been advised before that his discretion to renew or not to renew any fixed-term contract was limited by the performance or promotion of the individual concerned. According to the same email, the Director considered that it had been appropriate to speak personally to the person concerned, which he had done to explain his position to her, to hear that person’s views and to balance the interests of Cedefop. In addition, he stated:

‘The legal function is, indeed, a function. It is not an individual and I do not intend to abolish the function. However, I can assure you that I am giving careful consideration to your points and to the renewal or not of the contract in question.’

19 In an email sent to the applicant on 16 February 2017 at 7.47, the Director reiterated his position in the following terms:

‘Thank you for your emails of 14 February 2017. I appreciate that you have taken the opportunity to clarify your remarks which I am taking seriously into account.

I have spoken to you personally to explain that owing to financial and human resource pressures on Cedefop’s operations that I believe that it is in the interests of the organisation to consider not renewing your contract.

The reductions in Cedefop’s resources have led to excessive workload among colleagues and to negative priorities and the cancellation [of] planned operational projects. Despite decreasing resources, demands on Cedefop have increased. Our Programming Document 2018-2020 clearly states that there is an increasing risk that Cedefop will not be able to fulfil the various mandates and requests under the present circumstances. The Commission has made repeatedly clear that no additional resources will be provided to Cedefop.

To ensure that Cedefop can continue to carry out its core business effectively and with a forthcoming cross-cutting evaluation that will specifically look at how Cedefop can pool resources with other agencies, no support services, which account for a considerable proportion of Cedefop’s resources, can regard [themselves] immune from the pressures that the Centre faces as a whole.

I understand your disappointment with my consideration. However, in the best interests of all concerned, I wanted to inform you as soon as possible. I am also within the established timelines for information about renewal of contracts (Cedefop Note 30/10/2013).’

20 By email of 16 February 2017, at 11.56, the Director replied to the email of 15 February 2017 from the Heads of Department of Cedefop stating (i) that they had been ‘misinformed’ and that the Internal Legal Service would be subject to a review, as would the whole administration, including the Directorate, and (ii) that a draft note announcing the cost-benefit review would be sent to them shortly for their information.

21 By email of 16 February 2017, at 14.19, the Director of the Human Resources Department replied to the Director’s email of 15 February 2017 addressed to her, stating, first, that any management decision with potentially adverse consequences for individual staff members should be subject to consultation with the Human Resources Department. Next, she noted that, in the past, he had agreed to renew each contract and that the decision not to renew the applicant’s contract therefore constituted an unusual occurrence which warranted seeking advice from the Human Resources Department before speaking with the jobholder concerned, in particular since the applicant had received excellent staff reports throughout her career. Furthermore, she considered it obvious that an independent, professional and experienced internal legal service was mandatory to ensure the proper functioning of Cedefop. Lastly, she concluded that any transfer of the applicant’s ‘administrator’ (AD) grade post to the operational departments would not result in any cost saving, since any outsourcing of the legal service would be very costly.

22 By letter of 20 February 2017, the Deputy Director sent the Director a detailed assessment, in order to complement her email of 15 February 2017, setting out the risks associated with the decision envisaged by the Director in the following terms:

‘I was sincerely surprised about your sudden and unexpected idea – that you mentioned to me on 13 February [2017] in the context of my reminder as regards the renewal of [the applicant’s] contract – that you were considering a possible discontinuation of the in-house legal service at Cedefop. This is all the more surprising as we both request [the applicant’s] help and legal advice in almost all aspects of the administration and thus rely on her expertise on a daily basis. You have acknowledged last year that our legal service (essentially [the applicant] as experienced legal expert) is confronted with such [a] high workload that increasing the staffing of the service should be undertaken when and if feasible. I regret that you did not include me as Deputy Director and Internal Control Coordinator (ICC) in such considerations as this puts me once more in the uncomfortable position of disagreeing with your (seemingly) already taken stance, which you say is based on a need for efficiency gains. I consider such [an] undertaking as disruptive. I also would like to stress from the outset that such intention constitutes a substantial organisational change for which consultations with the Bureau and Governing Board … are required, in particular as [Governing Board] members have strongly supported the establishment of an internal legal function in the wake of the irregularities that were committed by high-level staff members of Cedefop between 2001 and 2005.’

23 On 9 March 2017, the applicant, in her capacity as Legal Advisor, issued a note containing an updated analysis of the workload of Cedefop’s Legal Service.

24 On 9 March 2017, the six Heads of Department of Cedefop sent a note to the Director expressing their concern about his intention to outsource the Legal Service, which reads as follows:

‘We are writing to you to express our strong concern about your ongoing considerations to externalise the legal advice function. The renewal of the contract of Cedefop’s Legal Adviser appears to be on hold for this reason which is an unusual step considering consistent past practice to renew contracts as a standard procedure.

We regret that you have not involved any of us in such a decision which would have a direct and adverse impact on Cedefop’s work, in particular as regards [the] legality and regularity of Cedefop’s actions and transactions. Since the establishment of the in-house legal service function, the Legal Advisor of Cedefop has continuously assisted all departments and services in legal matters on a daily basis, and her advice has always been sound, timely and reliable.

As internal service users, we believe that the independent internal legal advice function is indispensable for Cedefop’s daily work. Maintaining the existing internal legal service in its current form is essential to allow for any ad hoc legal questions (e.g. procurement, contractual, HR) as well as general legal issues (e.g. copyright, access to documents, conflict of interest) that occur on a frequent basis to be addressed in house – often at short notice – with the required legal expertise, quality standards, independence and understanding of the Cedefop context and processes.’

25 By email of 9 March 2017, at 12.29, the Head of the Communication Department of Cedefop sent an email to the applicant by which, following the Director’s email of 16 February 2017, he requested clarification as to the Director’s view that the Heads of Department had been ‘misinformed’ about his considering the possibility of abolishing the Internal Legal Service.

26 By email of 10 March 2017, at 21.59, the applicant replied to that email stating that she considered that the Director had given incomplete and misleading information to the Heads of Department and that, at the meeting of 14 February 2017, the Director had indicated to her that he wished to abolish the Internal Legal Service and move her post to the operational departments.

27 By note of 10 March 2017, the applicant sent the Director a request for renewal of her contract setting out all the reasons why she considered that renewal was justified. The applicant claimed inter alia that an independent legal advice function exists in all EU institutions and in most, if not all other EU agencies, even the smallest ones, in order to ensure the lawfulness of their actions. She noted that the legal advice function had been created at Cedefop following a five-year period marked by serious and repeated irregularities.

28 By letter of 14 March 2017 addressed to the Chair of Cedefop’s Governing Board (with a copy to the Director), the applicant’s lawyer presented the factual background and the legal framework of the present dispute and invited the Bureau of the Governing Board to instruct the Director to renew the applicant’s contract.

29 On 16 March 2017, the applicant sent an email clarifying the organisation of the Internal Legal Service to all the Heads of Department of Cedefop, stating in particular that the Legal Advisor was assisted by a trainee, a part-time external lawyer and external law firms in litigation matters.

30 On 17 March 2017, a meeting of the Enlarged Bureau of Cedefop’s Governing Board was held, in particular in relation to the letter of 14 March 2017 sent by the applicant’s lawyer. At the meeting, the Chair of Cedefop’s Governing Board informed the other members that she had requested advice from the Legal Service of the European Commission on two issues, namely on whether and how to respond to the applicant’s lawyer’s letter of 14 March 2017 and on the legality of the procedure with regard to the notice for the contract renewal. Two members expressed their surprise, observing that negative priorities and ways of overcoming financial problems had been discussed at the last Enlarged Bureau meeting and that the outsourcing of the Legal Service had not been mentioned. The Chair concluded (i) that the analysis of the changes in the administration proposed by the Director in relation to the operational areas should be presented at the next Bureau meeting and (ii) that the Director should consult the Governing Board before taking any decision about the in-house legal service, which would constitute a major organisational transformation for Cedefop.

31 By letter of 31 March 2017, the Director replied to the applicant’s lawyer’s letter of 14 March 2017, which had been sent to the Chair of Cedefop’s Governing Board, in the following terms:

‘I have been asked to reply as Cedefop’s director and in my capacity as the [AECE] with responsibility for all staff matters including engaging and dismissing staff.

1. Each case of renewal of a contract must be assessed on its merits. Previous decisions should not have an impact on the case at hand. As director of Cedefop, it is my responsibility to assess the Agency’s operations and take care for their optimisation. In this context, I am considering the possible renewal of [the applicant’s] temporary contract ending otherwise in November 2017. All other interpretation of our discussion on 14 February 2017 is superfluous.

2. In line with optimising Cedefop’s operations and their cost-effectiveness, I am currently analysing and assessing how best to secure legal advice for Cedefop in order to form an objective picture of the situation … I will then make an informed and reasoned decision concerning the renewal of [the applicant’s] contract. In doing so, I will of course consider her advice. However, as the issues concerned are non-legal matters, it is opportune and fair to have a broader view. On this basis I can make a non-biased decision.

3. At this point I am not in any position to sign the renewal, as I am still considering all options and implications. I will make a decision in due time …

4. I should point out that the irregularities and the allegedly criminal offences by staff members that you mention refer to a situation of the past, not the present … Given her legal adviser role and assuming her knowledge of the procedures, for [the applicant] to ask her lawyer to alert the Governing Board about her contract even before I have taken a decision on the matter cannot be considered a loyal, ethical practice.

I can assure you that in making up my mind I will put the interest of Cedefop and the service above any other consideration.’

32 By email of 31 March 2017, the Director sent the applicant a copy of that reply, stating that it also responded to the various points raised in the note of 10 March 2017 by which the applicant had requested the renewal of her contract.

33 On 31 March 2017, the Director sent an email to all staff announcing that he had launched a review of Cedefop’s administration and that he wanted to outline to them the reasons for the review and how it would be carried out. More specifically, he stated as follows:

‘The working group will examine through a cost-benefit analysis the scope for streamlining Cedefop’s internal administrative processes to ensure legality, regularity and accountability, while minimising the administrative burden (examining established procedures, layers of hierarchy, division of work between teams or units, IT systems, etc.).

As you may know, later this year Cedefop will undergo an external cross-cutting evaluation, organised by the European Commission. As well as the performance of Cedefop in terms of its relevance, effectiveness, efficiency, coherence and EU added value, the evaluation will examine both operational and administrative cooperation between Cedefop, Eurofound, ETF and EU-OSHA.

To strengthen its position, Cedefop must be able to present an efficient administration that is proportional to the needs of a medium-sized agency, with the right balance between operations and administration. To be able to respond to findings and proposals of the evaluation we must be proactive to be able to show that we have thoroughly examined how we work and that we are confident that it represents the most efficient way of doing things. The working group will start its work next week and is expected to complete it by 8 September 2017.

I wish to be clear that it is not the purpose of the review to reduce staff in Cedefop. The review may lead to a consideration of moving people from administration to operations. However, any moves will be carried out in the context of career planning and professional development …’

34 On 7 April 2017, before leaving the service, the Director of the Human Resources Department sent the Director two notes: the first reiterating the need for an internal legal service and its advice function for Human Resources and the AECE, and the second containing her views on the review of Cedefop’s administration.

35 By letter of 12 April 2017, the applicant’s lawyer replied to the letter of 31 March 2017 indicating that the legal issues at issue had not been addressed and reiterating the request for renewal of the applicant’s contract.

36 On 12 April 2017, the Director issued a document entitled ‘Review of Cedefop’s in-house Legal Service’ announcing the creation of a Working Group on the Legal Service. According to that document, the purpose of the review was to strive for efficiency gains and to explore the feasibility of alternative ways of providing legal services, while maintaining the required standards of legality and regularity. According to the planned schedule, the outcomes of the analyses would be available two weeks before the meeting of the Bureau of the Governing Board on 29 and 30 June 2017. The Group delivered its preliminary conclusions on the risk assessment on 7 June 2017 and, on 23 June 2017, it issued two analysis documents with a view to the meeting of the Bureau of the Governing Board of 29 and 30 June 2017. The final versions of the documents produced by the Working Group on the Legal Service were submitted by the Director to Cedefop’s Governing Board for the meeting of 5 and 6 October 2017.

37 By email of 25 April 2017, at the Director’s request, the applicant communicated to him the list of registered documents of the Legal Service from 2012 to 2016.

38 By email of 28 April 2017, the applicant submitted a detailed statement of budgetary expenditure relating to the Legal Service. According to that statement, annual legal expenses for the period from 2008 to 2016 averaged EUR 24 941.81. Annual translation expenses for the period from 2012 to 2016 averaged EUR 15 562.06.

39 On 11 May 2017, the Director submitted to the Governing Board a draft interim report of the Working Group on the Legal Service.

40 By letter of 12 May 2017, the Director replied to the applicant’s lawyer’s letter of 12 April 2017 in the following terms:

‘2. I note … your interpretation regarding the deadline of the renewal decision; the issue was addressed in my answer of 31 March 2017. That I was not in a position to renew [the applicant’s] contract was announced to her during our meeting on 14 February 2017

5. I reserve myself as far as the meaning and the rightfulness of your address to the Governing Board is concerned. Nevertheless, in this regard, it should be pointed out that you erroneously consider and unduly elaborate that the [AECE] criticised your client for having made appeal to a lawyer; this is a fundamental right fully respected by Cedefop.

6. In any event, thank you for your other advice. Be sure that I have taken it into account. Finally, as I respect your role in defending the interests of your client, I would appreciate you letting me define the interests of my service without creating external pressures.’

41 By decision of 12 May 2017, the Director informed the applicant that her contract would not be renewed. More specifically, he stated as follows:

‘After careful consideration of the interests of the service and of your own interests, I have decided to abide by my announcement to you on 14 February 2017 not to renew your contract, which will cease on 15 November 2017.

As you will know, Article 47(b)(i) of the [CEOS] provides that employment of a member of the temporary staff ceases, “where the contract is for a fixed period … on the date stated in the contract”. While these conditions allow for the possibility for contracts of temporary staff to be renewed, this is not a right but a matter for the discretion of the competent authority. Moreover, according to settled case-law, the institutions enjoy a broad discretion to organise their departments in keeping with the tasks entrusted to them and to assign the staff available to them in the light of such tasks.

Given the challenges Cedefop faces, the pressures on its resources and the consistent requirement to align human resources to strategic operational needs, I have decided to adjust Cedefop’s internal structure. The post that you have been occupying will be transferred to operational areas of work. The tasks you perform will be carried out through alternative internal arrangements, with support from other EU bodies and external legal expertise.

My decision has been reached after carefully taking into account many issues. These include the developments foreseen in Cedefop’s programming document 2017-2020, which expresses concern that budgetary constraints in terms of financial and human resources need to be reconsidered as there is an increasing risk that Cedefop will not be able to fulfil the various mandates and requests under the present circumstances. I have carefully considered the correspondence between us and the letters of your lawyer and colleagues’ points made in their joint memo of 9 March 2017. I have also given due consideration to your professional and personal conditions and the perspectives in your career.

Irrespective of this, I am afraid that the way you have handled your case, by involving staff and the Governing Board and by intimidating me through legal arguments, namely suggesting that I am “obliged” to renew your contract, and other opportunity considerations [do] not leave me any room for renewing your contract.

I would have much preferred you to have addressed the matter with me in an objective and substantiated manner, as you were and are always welcome to do.

It is exactly in this context of personal trust that I invited you to discuss the matter with me without the presence of a third person. However, your persistent behaviour since our meeting on 14 February 2017 has taken from me any sense of trust in you, creating a wall between us rendering any future cooperation impossible, especially in the highly sensitive relationship between the Director and Legal Adviser.’

Events occurring after the adoption of the decision of 12 May 2017 and up to the lodging of the complaint

42 By note of 15 May 2017, the Deputy Director highlighted the risks incurred by Cedefop and the applicant’s excellent performance and exemplary conduct and asked the Director to reconsider the decision of 12 May 2017.

43 By note of 16 May 2017, the Staff Committee of Cedefop, which had not been informed of the existence of the decision of 12 May 2017, sent a note to the Director stating that the applicant had still not been informed of his decision concerning the renewal of her contract and reminding him that the renewal should be effected at the latest six months before the date on which the contract was to expire. The Committee also stated that it was aware of his recent decision to establish a Working Group on the Legal Service to seek efficiency gains and explore alternative ways of providing legal services. However, in particular in view of the fact that the final results of the analysis of this working group would only be available in mid-June 2017, almost five months before the expiry date of the applicant’s contract, the Staff Committee asked the Director to confirm whether a decision on non-renewal had already been taken and the grounds of that decision; whether the results of the relevant working group had been taken into account and; in case of non-renewal, how the Director could ensure the continuity of the Legal Service while respecting the required standards of legality and regularity.

44 By memorandum of 24 May 2017, the Director replied to the Staff Committee that he had decided not to renew the applicant’s contract. More specifically, he stated as follows:

‘In making this decision I have carefully considered many issues, including developments foreseen in Cedefop’s programming document 2017-2020, which expresses concern that budgetary constraints in terms of financial and human resources need to be reconsidered as there is an increasing risk that Cedefop will not be able to fulfil the various mandates and requests under the present circumstances. I have also taken into account the initial findings of the review of the legal service. I am currently exploring various ways of Cedefop structuring its legal function to ensure legality, regularity and accountability …’

45 On 7 June 2017, the Cedefop Working Group on the Legal Service published its preliminary conclusions on the risk assessment. The Group found as follows:

‘The externalisation of all legal services to be procured in the market and the lack of a specialised lawyer in-house would bring several risks for Cedefop which have been assessed as critical and, as such, would require inclusion in the Risk Management Plan which is an integral part of the work programme. The risks relate in particular to:

(a) increased financial uncertainty and higher costs for Cedefop … as compared to having a dedicated legal expert in-house who is responsible for the legal advice provided, which would inevitably imply the identification of negative priorities in other areas of activity (high financial risk);

(b) reduced efficiency in terms of increased timelines of responses by external lawyers to Cedefop’s queries which may impact on the Centre’s ability to respect its (statutory) deadlines and its ability to deliver more generally (high reputational and legal risk);

(c) effectiveness, including the inability to perform in-house proper quality control of the legal services provided by external lawyers, loss of in-house culture and sensitivity to regularity, compliance and anti-fraud framework, lack of independence of legal services provided thus leading to increased risk of non-compliance, irregularities and errors (high irregularity, reputational and legal risks).

Finally, in the short term, especially in light of the current absence of the Head of [Human Resources] and of the Head of Resources/Administration, the externalisation of the in-house legal service creates a critical systemic risk for Cedefop not to be in a position to ensure continuity of its work until the new arrangement is known and fully implemented (the time this will take is uncertain also in light of recent past experience of recruitment).

It should be noted that for several of the risks identified through the risk analysis exercise, the actual feasibility of proposed mitigation actions is questionable and should be analysed. This relates in particular to procuring external legal services [from] a pool of Law firms to compensate for the absence of an in-house specialised lawyer.’

46 By letter of 15 June 2017, one of Cedefop’s Heads of Department withdrew his support for the note of 9 March 2017 which the six Heads of Department had sent to the Director to express their concern about the outsourcing of the Legal Service.

47 On 15 June 2017, the applicant received an official appraisal of her professional performance for 2016. The appraisal concluded that she had ‘worked consistently with a high degree of efficiency, professionalism and accuracy and … that she possesses the knowledge, skills and competences needed to perform her job to a high standard and to the full satisfaction of all concerned’.

48 With a view to the meeting of the Bureau of Cedefop’s Governing Board of 29 and 30 June 2017, the Director sent the Bureau two analysis documents, namely in the words used by the Director ‘the preliminary report of the Working Group to review Cedefop’s administration’ and ‘the note and interim report from the Director based on the information gathered from the Working Group to review the Legal Service’.

49 The second of those analysis documents sent to the Bureau consists of two parts: the first part is entitled ‘Note from the Director on the review of the Legal Service’ and the second part ‘Review of Cedefop’s in-house Legal Service – interim report’. In the first part, which essentially corresponds to the ‘Summary’ appearing in the second part, the Director stated as follows:

‘... 2. In early 2017, the unfruitful recruitment procedure of the Head of the Department of Resources and Support and the sudden departure of the Head of Human Resources triggered the decision to restructure administrative support services, including the legal services, with a view to transferring resources to operational areas.

3. An internal review of the administration was proposed to the Bureau at its meeting of 17 March 2017. The Bureau agreed and asked for results for the Governing Board meeting in October 2017. Following discussions with colleagues, it was agreed to separate the administration review from that of the legal service and two separate working groups were established.

4. The purpose of the review is: “to strive for efficiency gains and to explore the feasibility of alternative ways to provide legal services while keeping the required standards for legality and regularity.”

6. The central findings of the interim report [footnote in the original: ‘A draft interim report was delivered by the Director on 11 May 2017’] are that:

– The conditions that required the legal function to be set up in its current form – namely concerns over legality in the wake of an OLAF investigation and charges against Cedefop staff – no longer exist.

– The evidence is that Cedefop’s strong record of legality etc. is primarily achieved, not through the many systems that Cedefop has in place and its staff following and implementing guidelines and procedures for ex ante and ex post controls related to finance and human resources.

– There is no reason to assume independence of legal advice would be compromised by changes to the current legal function. Although knowledge of rules and procedures is broadly spread across Cedefop, notably in the administration, the current legal service is heavily centralised. For example, there is no back up mechanism for when the legal adviser is absent.

– The cost of the current legal service – around EUR 195 000 a year (including human resources) – appears disproportionate for an agency of Cedefop’s size. The risk assessment argues that it is not necessary for Cedefop to retain the legal function in its current form.

– There is scope to change the structure of Cedefop’s internal legal function, to meet its needs while reducing its cost.

– Ensure that legal advice reflects an understanding [of] Cedefop’s context;

– Systemise exchanges of expertise with EU institutions and agencies on legal advice on issues that are common to them all (procedures, implementing regulations, etc.);

– Reinforce independence by avoiding concentration of legal advice into a single point of knowledge;

8. Discussions with the [Commission’s Internal Audit Service] showed there to be no one model of legal service across agencies. It is for agencies to decide what arrangements best suit their needs.

9. There is no one solution among EU agencies on how to provide an internal legal function. An overview of other EU agencies has revealed a multitude/pluralist range of services from single legal advisors to legal officers (lower grades), [or] to a combination of legal/administrative functions. Some agencies have no internal legal function at all.

10. The aim is for Cedefop to have an internal legal function that is cost effective, lean, proportional to its remit, and which provides support to staff in human resources and in finance and procurement.

11. Several measures are foreseen to strengthen Cedefop’s internal legal function that will enable savings to be deployed into the operational departments and take into account the findings of the interim report on the review of the legal service. These include:

– continue and renew trust in colleagues working in human resources and in finance and procurement who are highly professional and who substantially mitigate risks and irregularities;

– recruit a Head of the Department of Resources and Support and a Head of Human Resources with a legal background. The officers will back up each other and represent Cedefop on IALN[,] the professional network of legal advisors of the EU;

– continue to use the Greek law firm currently under contract with Cedefop for litigation services in Greek law courts or Greek administration which may include the police; they could also be used for infrequent issues such as cases involving the European Ombudsman, MoUs, contractual matters;

– maintain arrangements with selected external lawyers in rare cases of litigation involving staff matters or matters related to European administration;

– explore ways of systemising exchanges of expertise with EU institutions and agencies on legal advice on issues that are common to them all (procedures, implementing regulations, etc.);

– establish a service level agreement with an EU agency to share legal services and to provide advice tailored to EU organisational needs, especially in relation to the application of regulations, communication with staff and externals on matters of legal complications, ethics and integrity measures;

12. These measures would provide a strong internal legal function, be cost effective, and establish a back-up system for legal advice. They would also eradicate an established internal process of resorting to legal advice for issues that could be resolved at a procedural/relational level. Importantly, they would ensure that legality, regularity and compliance remain the cornerstone of Cedefop’s management culture.

13. The review of the legal service will continue. Financial information is still being collected and the findings will be reviewed. Final proposals will be presented to the Governing Board in October.’

50 On 27 June 2017, the applicant’s lawyer sent a letter to the Chair of Cedefop’s Governing Board informing her of the events that had occurred since the letter of 14 March 2017. The letter stated, inter alia, the following:

‘All services belonging to the administration of Cedefop have a significantly higher head-count than the Legal Service consisting of one Legal Advisor and one … assistant. It is incomprehensible why the Director decided to suppress an essential service consisting of one legal expert when all other services have not been reviewed, most of which are certainly very costly in comparison with the Legal Service, also when considering the staff costs alone.

It should be noted that the Director removed the Directorate [of Cedefop] from the scrutiny of the [Working Group] on the administration once it was clear that he would create a separate [working group] on the review of the legal service, which forms part of the Directorate. He further decided at this point that the results of the [Working Group] on the administration would be due in September only, as opposed to the original due date of early May when the Directorate, and thus the Legal Service, was still under the remit of the [Working Group] on the administration. He also decided not to await the conclusions of the [Working Group] on the administration when deciding on the non-renewal of the contract of my client …’

51 On 29 and 30 June 2017, the Bureau of Cedefop’s Governing Board met. Its members discussed the future of the Internal Legal Service. In view of the fact that the work of the Working Group on the Legal Service was still ongoing and in view of the risk assessment finalised on 7 June 2017, which had concluded that the abolition of the Internal Legal Service would entail considerable risks, the Chair of the Bureau stated as follows:

‘Members … advised Cedefop to ask quickly for the support of an external expert. A proposal, including the assessment of the external expert, should be ready for the [next meeting of the Governing Board]. Two vacancies were on the way and as of November there would be no legal service. A decision had to be taken quickly.’

52 On 14 July 2017, the Director replied to the letter of 27 June 2017 from the applicant’s lawyer. That reply included the following comments:

‘I take note of the persistence of your client to keep on addressing … the [Governing Board] despite my letter of … March 2017. Besides, you refer to the internal talks of the Enlarged Bureau … without naming your source and with the only objective to discredit the [AECE] in the eyes of the members of the [Enlarged Bureau]. In this way, you corroborate one of the bases of the non-renewal decision in question …’

53 On 9 August 2017, the applicant lodged a complaint, within the meaning of Article 90(2) of the Staff Regulations, against the decision of 12 May 2017 with the Appeals Committee of Cedefop, which acknowledged receipt thereof on 10 August 2017.

Events subsequent to the lodging of the complaint and until the adoption of the decision rejecting the complaint

54 On 28 September 2017, the Commission’s Internal Audit Service (‘the IAS’) published a note entitled ‘IAS consulting engagement on CEDEFOP’s efficiency-gains review of its legal service – Final results’. The IAS explains in that note that, on 13 July 2017, Cedefop sought the opinion of the IAS on the risk assessment that it had performed as part of the efficiency-gains review of its legal service. In that regard, the IAS concludes as follows:

‘Despite the overall reasonable methodological approach … and the Director’s interim report, we found that the actual implementation of this approach and the way in which the risk assessment was conducted (i.e. dysfunctional working group, which limited the sources of input and failed to agree on the output, shortcomings in the inputs and consultation process) affected the quality and the reliability of the final output/results. Furthermore, the numerous deficiencies in the assumptions, combined with the low-quality and incomplete input data, make the cost-benefit analysis incomplete and, thus, insufficient to support a reasoned decision.

The IAS considers that the comparative risk assessment and cost-benefit analysis are of insufficient quality and maturity to constitute a reasonable basis for a management decision as regards the reorganisation of Cedefop’s legal function.

In the absence of a fully operational legal function, as a result of the decision not to renew the contract of the current legal advisor, and the partial implementation of the mitigating measures, we draw your attention to the high risk situation to which Cedefop may be exposed as from November 2017 …’

55 On the same day, 28 September 2017, the Director sent a letter to the Director-General of the IAS, stating that he was ‘very disappointed’ about the publication of the IAS note on that day, because, ‘although this is in line with the original timetable’, he expected publication on 29 September 2017, after the IAS had received Cedefop’s comments on the draft conclusions of that note.

56 On 29 September 2017, the Director-General of the IAS replied to the Director’s letter in the following terms:

‘The scope of the consultation engagements should be clearly defined and agreed upon. In this case, the agreed scope was the review of the two documents provided to us on 11 September 2017. In order to respect the deadlines for your forthcoming Governing Board meeting of 5-6 October, a tight timeline was agreed for our draft and final consulting notes, as well as for the receipt of your comments. The IAS met its deadlines, whilst also waiting an extra day in order to receive your comments.

Your suggestion that [one of the directors of the IAS] agreed to send the final document only on 29 September [2017] appears to be a misunderstanding. When the IAS was informed by [Cedefop’s] services that the new version [of the documents originally submitted to the IAS] had already been sent to the [Governing] Board, while according to the original schedule, it should have been sent together with the IAS note, the IAS team finished the note as planned in order to ensure that it could still reach the [Governing] Board before the meeting [of 5-6 October 2017].’

57 Furthermore, the Director-General of the IAS explained that the IAS had not agreed to analyse subsequent versions of the documents that were the subject of that consultation. He noted, however, that the IAS team had performed a light review of the subsequent version sent to the IAS and the Governing Board on 23 September 2017 and that this had been reflected in the IAS final note under the heading ‘Post-fieldwork developments’.

58 On 29 September 2017, the Director-General of the Commission’s Directorate-General (DG) for Employment, Social Affairs and Inclusion sent a note to the Chair of Cedefop’s Governing Board containing the analysis of the Commission’s Legal Service on the competences of the Governing Board and the Director regarding reorganisations, as had been requested at the meeting of 29 and 30 June 2017. That analysis states as follows:

‘The [Governing Board’s] role is to define the broad strategic orientations of the Agency, notably through the adoption of the medium term priorities and the annual work programme, and to monitor their implementation. The Founding Regulation explicitly states that the Director is “responsible for the management of the Centre” and “for all staff matters”, which competences are therefore not assigned to the Governing Board. It follows from this that the Director has the authority to decide on Cedefop’s organisational structure.’

59 On 3 October 2017, the applicant’s lawyer sent a letter to the Director, asking him to withdraw, in writing and orally at the meeting of Cedefop’s Governing Board on 5 and 6 October 2017, the allegation of ‘issues of conduct’ as made at the meeting of 29 and 30 June 2017 which are claimed to have led to a ‘loss of trust’, and the claim in the documentation distributed to Governing Board members that the applicant had not complied with the rules applicable to public contracts. Such allegations were not only unfounded, but also undermined the applicant’s good reputation with more than 90 members of the Governing Board and also with Cedefop’s management and staff.

60 On 5 and 6 October 2017, Cedefop’s Governing Board held its annual meeting. The agenda provided inter alia for a discussion on the assessment of Cedefop’s Internal Legal Service, in particular on the basis of the final report of the Working Group on the Legal Service. Following a discussion in which several participants raised doubts about the solution advocated by the Director, the Chair concluded that the exercise of the risk assessment and cost-effectiveness analysis would be complemented and improved by the various elements of all the discussions, past and present, as well as by the final results of the IAS’s work and the letter of 29 September 2017 from the Director-General of the Commission’s DG for Employment, Social Affairs and Inclusion. This exercise was to be carried out with the IAS or an external contractor (an auditor). The Director was to present the new results to the Bureau on 5 December 2017. He was also to have interaction with Bureau members before that date.

61 At that same meeting, Cedefop’s Governing Board voted on whether to renew the term of office of the Director, who did not receive the absolute majority of votes required by Cedefop’s Founding Regulation.

62 On 25 October 2017, the applicant was invited to participate in a hearing before the Appeals Committee of Cedefop.

63 By letter of 13 November 2017, the applicant’s lawyer announced that the applicant would not participate in that hearing.

64 On 13 November 2017, the applicant submitted an ‘update’ on the complaint of 9 August 2017, in order to supplement it and to further develop some of the arguments in the light of new and additional facts.

65 On 16 and 17 November 2017, the Appeals Committee of Cedefop met in relation to the complaint lodged by the applicant on 9 August 2017. In the course of that meeting, the Appeals Committee invited and heard the applicant’s line manager, namely the Deputy Director, and the Director, as competent authority for the adoption of the decision of 12 May 2017.

66 On 27 November 2017, the consulting firm instructed by Cedefop delivered its final report on the review of Cedefop’s In-house Legal Service.

67 By decision of 1 December 2017, the Appeals Committee rejected the applicant’s complaint as unfounded (‘the decision rejecting the complaint’).

68 By application lodged at the Court Registry on 9 March 2018, the applicant brought the present action.

69 By letter of the same date, the applicant requested anonymity, in accordance with Article 66 of the Rules of Procedure of the General Court, which was granted to her.

71 On 30 October 2018 and 7 January 2019, the reply and the rejoinder respectively were lodged at the Court Registry.

72 The parties did not request a hearing under Article 106(1) of the Rules of Procedure. The General Court considers that it has sufficient information available to it from the material in the file and has decided, pursuant to Article 106(3) of the Rules of Procedure, to rule on the action without an oral part of the procedure.

– order compensation for her material and non-material damage, evaluated ex æquo et bono at EUR 120 000;

75 According to settled case-law, a claim for annulment formally directed against the decision rejecting a complaint has the effect of bringing before the General Court the act against which the complaint was submitted, where that claim, as such, lacks any independent content (judgment of 13 December 2018, CN v Parliament, T‑76/18, not published, EU:T:2018:939, paragraph 39; see also, to that effect, judgment of 17 January 1989, Vainker v Parliament, 293/87, EU:C:1989:8, paragraph 8).

76 However, where the scope of the decision to reject the complaint differs from that of the measure against which that complaint was made – inter alia where it changes the original decision or where it contains a re-examination of the applicant’s situation in the light of new elements of law or of fact which, had they arisen or become known by the competent authority before the adoption of the original decision, would have been taken into consideration, the General Court may be required to rule specifically on the claim formally directed against the decision to reject the complaint (see, to that effect, judgment of 21 September 2011, Adjemian and Others v Commission, T‑325/09 P, EU:T:2011:506, paragraph 32 and the case-law cited).

77 In the present case, in addition to the annulment of the decision of 12 May 2017, the applicant seeks, under the second head of claim, ‘as far as necessary’, the annulment of the decision rejecting the complaint. However, that decision does not merely confirm the decision of 12 May 2017, since the Appeals Committee of Cedefop adopted a position in the light of new elements.

78 More specifically, the Appeals Committee of Cedefop refers to new facts, for example when it examines the complaint alleging a manifest error of assessment by the Director. It thus takes account of the following facts, which were all subsequent to the adoption of the decision of 12 May 2017: first, the explanations of the Director at the meeting of 16 and 17 November 2017, second, the preliminary report of the Working Group on the Legal Service, of 7 June 2017, third, the IAS’s note of 28 September 2017 and fourth, the letter of 15 June 2017 by which one of the Heads of Department of Cedefop withdrew his support for the note of 9 March 2017 which the six Heads of Department had sent to the Director.

79 In those circumstances, it is necessary to examine both the claim for annulment of the decision of 12 May 2017 and the claim for annulment of the decision rejecting the complaint (see, to that effect, judgments of 19 December 2019, ZQ v Commission, T‑647/18, not published, EU:T:2019:884, paragraphs 35 to 37, and of 17 September 2014, CQ v Parliament, F‑12/13, EU:F:2014:214, paragraph 71).

80 Lastly, the decision rejecting the complaint clarifies certain aspects of the statement of reasons for the decision of 12 May 2017. Accordingly, in view of the evolving nature of the pre-litigation procedure, the statement of reasons must also be taken into account in the review of the legality of the decision of 12 May 2017, since that statement of reasons is deemed to coincide with the latter decision (see, to that effect, judgment of 9 December 2009, Commission v Birkhoff, T‑377/08 P, EU:T:2009:485, paragraphs 55 and 56 and the case-law cited).

81 In paragraph 116 of the defence, Cedefop contends that the action for annulment should be dismissed as inadmissible and, in any event, as unfounded.

82 Since, in its written pleadings, Cedefop does not put forward any argument in support of the inadmissibility of the action, that plea of inadmissibility must be rejected.

The admissibility of one of the grounds of challenge of the first plea alleging breach of the right to be heard

83 In paragraph 35 of the defence, Cedefop contends that one of the grounds of challenge on which the applicant relies in the context of the first plea is inadmissible, namely that she was not heard on the issue of the loss of trust to which the Director refers in the decision of 12 May 2017. According to Cedefop, that ground of challenge was not raised in the complaint and is therefore inadmissible.

84 In that regard, it should be recalled that the rule requiring consistency between the complaint and the subsequent application requires, on pain of inadmissibility, that a plea raised before the Courts of the European Union has already been raised in the context of the pre-litigation procedure, thus enabling the AECE to know the criticisms made of the contested decision. It follows that, in actions brought by members of staff of the European Union, the form of order sought before the Courts of the European Union can contain only heads of claim based on the same matters as those forming the basis of the heads of claim put forward in the complaint, although those heads of claim may be developed before the Courts of the European Union by pleas and arguments which do not necessarily appear in the complaint but must be closely linked to it (see judgment of 25 October 2013, Commission v Moschonaki, T‑476/11 P, EU:T:2013:557, paragraphs 71 and 73 and the case-law cited; see, also, judgment of 16 October 2019, ZV v Commission, T‑684/18, not published, EU:T:2019:748, paragraph 20).

85 In the light of that case-law, it must be held that, contrary to what Cedefop maintains, the ground of challenge in question was raised in Sections 5.1 and 5.8 of the complaint. It follows that the plea of inadmissibility alleging breach of the rule requiring consistency between the complaint and the application must be rejected.

86 In support of her claim for annulment of the decision of 12 May 2017 and of the decision rejecting the complaint (‘the contested decisions’), the applicant raises, in essence, nine pleas in law, alleging:

– second, breach of the rights of the defence and of Article 26 of the Staff Regulations;

– sixth, a manifest error of assessment and failure to have regard to the interests of the service;

– eighth, a lack of impartiality and breach of the prohibition of conflict of interest in the complaint procedure;

87 In the interests of procedural economy and in accordance with the principle of the proper administration of justice, the Courts of the European Union may give judgment in an action without necessarily having to rule on all the pleas in law and arguments put forward by the parties (judgment of 5 February 2018, Ranocchia v ERCEA, T‑208/16, EU:T:2018:68, paragraph 57). In the present case, it is appropriate to examine first the sixth plea, then the first and second pleas, without it being necessary to examine the other pleas raised by the applicant.

The sixth plea in law, alleging a manifest error of assessment and failure to have regard to the interests of the service

88 In the first place, the applicant submits that the decision of 12 May 2017 is vitiated by a manifest error of assessment. She submits that the Director made an arbitrary decision which was devoid of any justification or assessment. The considerations in the decision of 12 May 2017 relating to the proposed reorganisation were of no relevance in the context of the contested decision, despite the emphasis which the administration places on that aspect in the decision rejecting the complaint. Moreover, the notion of loss of trust was not a subject of assessment in the decision of 12 May 2017, since it constituted neither a reason nor a justification for that decision, but merely a ‘remark’, which was not based on the applicant’s conduct or behaviour, but on unspecified ‘events’.

89 In the second place, and by reason of the absence of any assessment, the Director infringed Article 8 of the CEOS inasmuch as he did not at any time act in the interest of the service, which required renewal of the applicant’s contract. In that regard, she observes that, in the complaint, she submitted various documents for the purpose of demonstrating that the Director had not correctly taken into account the interests of the service: the preliminary conclusions of the Working Group on the Legal Service, relating to the risk assessment and which was submitted on 7 June 2017; the IAS’s assessment of 28 September 2017 on Cedefop’s efficiency-gains review of its service and the letter of 9 March 2017 signed by six Heads of Department of Cedefop.

90 In the third place, in the reply, in response to Cedefop’s argument that the organisation and operation of services are the sole responsibility of the Director, who is therefore entitled to make decisions on contract renewals ‘in the light of the forthcoming changes … or in the light of future restructuring of the Agency’ within the margins of his discretionary power, the applicant states that such changes or restructurings had not yet been implemented on 12 May 2017, the date of the decision. That finding cannot be invalidated by the Cedefop Programming Document 2017-2020 (‘the Programming Document’), since that document does not support the view that a future restructuring of the legal service was intended. Not only is that document silent on the Legal Service, but it also contains, as an annex, an organisation chart which, in describing the function of Legal Advisor, highlighted the relevance and importance of the applicant’s role.

91 Furthermore, according to the applicant, the actions of the Director between April 2017 and May 2018 demonstrate that, if he was pursuing his view that Cedefop did not need an internal Legal Advisor, it was solely in order to justify his preconceived plan to dismiss her and he had in fact already taken his decision not to renew her contract before the Working Group on the Legal Service was even set up.

92 The applicant observes that Cedefop’s management did not approve the abolition of the post of Internal Legal Advisor. Moreover, the Deputy Director, the Director of the Human Resources Department, the Enlarged Bureau, the IAS and Cedefop’s Governing Board did not agree with that abolition. Even the consultants appointed by Cedefop, who were remunerated and expected to agree, disagreed.

93 In summary, the applicant submits that, in any event on the date on which the decision of 12 May 2017 was adopted, there was no factual basis for relying on a future restructuring of Cedefop and that the evidence which she adduced is sufficient to render the assessments made by the administration implausible.

94 Cedefop contends that no manifest error of assessment can be found and that, consequently, the sixth plea in law must be rejected as unfounded.

95 In the first place, Cedefop disagrees with the applicant’s reading of the decision rejecting the complaint. The Appeals Committee never stated that the decision of 12 May 2017 contained no statement of reasons or no assessment. On the contrary, the Appeals Committee noted that the Director had spelt out the reasons on which he based his decision in the decision itself. Moreover, the fact that the restructuring had not yet been implemented did not render the decision of 12 May 2017 illegal. In accordance with its broad discretionary powers to assess the interests of the service, Cedefop was entitled to make decisions on the renewal of a contract in the light of the forthcoming changes in its administrative units or in the light of its future restructuring.

96 In the second place, Cedefop contends that the reasons put forward in the decision of 12 May 2017 were plausible and were not vitiated by a manifest error of assessment. Furthermore, the Appeals Committee rightly concluded that the complaint was directed against the decision not to renew the applicant’s contract and not against the review of the Legal Service.

97 First of all, in the decision of 12 May 2017, in order to demonstrate the pressure on Cedefop’s resources, the Director referred to the Programming Document. According to that document, ‘the increasingly acute staff shortfall will need to be addressed through clear negative priorities or additional staff’. The document adds that ‘the following initiatives are foreseen for 2017-2020: … (b) use of (Commission) framework contract[s], wherever possible, to reduce administrative overheads; … (f) use, as appropriate, of the inter-agency shared service catalogue’. Paragraph 119 of the Programming Document states that ‘specific (additional) negative priorities for the coming years must, by definition, be flexibly identified to respond to the dynamic policy environment’.

98 Cedefop infers from the foregoing that, contrary to what the applicant observes, it expressly stated that those additional negative priorities could be identified without excluding or targeting a specific budget item or a specific service or department. Cedefop was therefore entitled to take a decision on addressing the future budgetary constraints and the AECE remained competent to decide on strategic needs and adjustments to the internal structure.

99 In the third place, Cedefop contends that the decision not to renew the applicant’s contract had to be adopted no later than six months before the end of that contract. Consequently, the Director was required to base his decision on the elements in his possession at that point in time. Cedefop contends that the Director could reasonably consider that the renewal of the applicant’s contract would not be in the interest of the service, in particular on the basis of the following factors:

– the pressures on Cedefop’s resources and the consistent requirement to align human resources to strategic operational needs, as mentioned in the Programming Document;

– the administration costs, amounting to EUR 5.5 million per year, plus EUR 195 000 for the Legal Service (according to Cedefop, that figure represents an average over the period 2008/2016 and includes the salaries of the Legal Service staff, namely one Legal Advisor and one secretary/assistant), those costs accounting for approximately 32% of Cedefop’s total budget;

– the fact that the EU legislature regularly highlights the benefits of sharing services between agencies, ‘which enable consistent application of administrative implementing rules and procedures that concern human resources and finance issues, as well as the potential efficiency and cost-effectiveness gains of sharing services between the agencies, in particular when considering the budget and staff reductions that the agencies are facing’ (see European Parliament document P8_TA-PROV(2018)0133, ‘Discharge 2016: Performance, financial management and control of EU agencies’);

– the fact that a review of the administration and of the Legal Service was about to start and that the conclusions drawn from such a review would very probably have an impact on the internal structure of the services;

– the fact that the renewal of the applicant’s contract would entail the conclusion of a contract for an indefinite period.

100 In the fourth place, as regards the various documents submitted by the applicant with a view to proving that the Director had not properly taken into account the interest of the service, Cedefop contends that, as the Appeals Committee rightly stated, the purpose of the review of the Working Group on the Legal Service was not to assess whether the applicant’s contract should be renewed.

101 In the fifth place, it cannot be legitimately argued that all the relevant actors of Cedefop were against the idea of considering a restructuring of the legal service, since the Enlarged Bureau and the Governing Board did not formally oppose that possibility. In any event, the power to manage Cedefop and to decide on the renewal of a contract remained in the hands of the Director, who was responsible for all staff matters, in accordance with Article 7 of Regulation No 337/75.

102 First of all, it should be noted that, in accordance with Article 7 of Regulation No 337/75, the Director was the competent authority for the renewal of the applicant’s contract.

103 Second, although Article 8 of the CEOS makes it possible to renew a temporary staff contract, it is not an entitlement, but merely a possibility left to the discretion of the competent authority. It is settled case-law that the EU institutions have a wide discretion to organise their departments to suit the tasks entrusted to them and to assign the staff available to them in the light of such tasks on condition, however, that the staff are assigned in the interest of the service (see judgment of 7 May 2019, WP v EUIPO, T‑407/18, not published, EU:T:2019:290, paragraph 57 and the case-law cited).

104 In that regard, it should be recalled that an institution alone has the power to organise and operate a department, and that the hierarchical authority has sole responsibility for how departments are organised. It is for that authority alone to assess the needs of the service and to assign the staff available to it accordingly (see judgment of 11 July 1997, Cesaratto v Parliament, T‑108/96, EU:T:1997:115, paragraph 48 and the case-law cited).

105 The institutions and bodies of the European Union are also free to organise their administrative units taking account of a whole range of factors, such as the nature and scope of the tasks which are assigned to them and the budgetary possibilities. That freedom involves both the freedom to abolish posts and to change the allocation of tasks in the interest of more efficient work organisation or in response to budgetary requirements to abolish posts imposed by the Union’s political authorities, and the power to reassign tasks previously carried out by the holder of the post abolished, without the abolition of that post necessarily being subject to the condition that all the tasks imposed must be performed by fewer people than before the reorganisation. Furthermore, the abolition of a post does not have to mean that the tasks it involved lapse (see judgment of 24 April 2017, HF v Parliament, T‑584/16, EU:T:2017:282, paragraph 103 and the case-law cited).

106 Similarly, the administration has a broad discretion with regard to the renewal of contracts and, in that context, review by the Courts must be limited to ascertaining whether, regard being had to the various considerations which have influenced the administration in making its assessment, it remained within unimpeachable limits and has not used its power in a manifestly incorrect way (see, to that effect, judgment of 13 December 2018, Wahlström v Frontex, T‑591/16, not published, EU:T:2018:938, paragraphs 47 and 95 and the case-law cited).

107 In that regard, an error may only be characterised as manifest when it is easily recognisable and can be readily detected, having regard to the criteria to which the legislature intended to make the exercise of the administration’s discretion subject. Consequently, in order to establish that the administration committed a manifest error in assessing the facts such as to justify the annulment of a decision taken on the basis of that assessment, the evidence, which it is for the applicant to adduce, must be sufficient to make the findings of the administration implausible. In other words, a plea based on manifest error must be rejected if, despite the evidence produced by the applicant, the assessment in question can still be regarded as justified and coherent (see judgment of 13 December 2018, Wahlström v Frontex, T‑591/16, not published, EU:T:2018:938, paragraph 96 and the case-law cited).

108 In the present case, it is apparent from the wording of the decision of 12 May 2017 that the Director put forward two reasons to justify the non-renewal of the applicant’s contract: one relating to budgetary constraints and the other to the applicant’s conduct. However, in view of the evolving nature of the pre-litigation procedure, the statement of reasons in the decision rejecting the complaint must also be taken into account in the review of the legality of the decision not to renew the contract (see, to that effect, judgment of 9 December 2009, Commission v Birkhoff, T‑377/08 P, EU:T:2009:485, paragraphs 55 and 56 and the case-law cited). It is apparent from the decision rejecting the complaint that, according to the Appeals Committee, loss of trust was not among the factors taken into account by the Director when considering the possible renewal of the contract. Moreover, it is apparent from the same decision and from the decision of 12 May 2017 itself that, in addition to ‘budgetary constraints’, two other elements were taken into account by the Director in the decision of 12 May 2017: the note of 9 March 2017 from the six Heads of Department of Cedefop and the interest of the applicant.

109 It is in the light of those clarifications provided by the decision rejecting the complaint, in particular with regard to those three elements, that it must be ascertained whether the Director committed manifest errors of assessment in adopting the decision of 12 May 2017.

110 In that regard, it should be noted, first of all, that the decision of 12 May 2017 refers to the Programming Document, which, according to the Director, ‘expresses concern that budgetary constraints in terms of financial and human resources need to be reconsidered as there is an increasing risk that Cedefop will not be able to fulfil the various mandates and requests under the present circumstances’.

111 Second, the Appeals Committee noted that that ground had been relied on in order to establish ‘the interest of the service’ and that, ‘in the oral hearing held [before it] on 16-17 November 2017, the Director explained that, according to the management plan, a staff reduction had taken place, … that, according to the information he had gathered before the adoption of the decision, a very small proportion of the activity of the legal service was directed [at] the operational departments’ and that ‘in order to achieve the results expected from the agency, focusing on the operational activity of Cedefop would be necessary’.

112 Lastly, the Appeals Committee noted that, at the hearing, the Director, ‘in the light of the position he holds, … has at his disposal a broader range of aspects that allow him to take informed decisions, under Article 7(4) of Regulation No 337/75’. According to that committee, he thus provided explanations on the ‘elements he had at his disposal when he had to adopt the contested decision’. However, the decision rejecting the complaint does not explain what those ‘elements he had at his disposal’ consisted of.

113 It follows that the only document in the file relied on by Cedefop which makes it possible to determine whether the Director used his power in a manifestly incorrect manner is the Programming Document.

114 In this respect, the Programming Document states, first of all, in Section 2.3.5, entitled, ‘Management and resources’, that ‘human capital and its management are crucial to the effectiveness of a knowledge-based organisation such as Cedefop, and even more so in the context of increasing budget cuts’ (see paragraph 71 of the Programming Document). In addition, paragraph 77 of the Programming Document states as follows:

‘In its continuous pursuit of increasing efficiency and reducing administrative burden, Cedefop will review its processes and investigate possible synergies and further efficiency gains within the organisation. This will be supported by initiatives to improve electronic reporting facilities and analytical tools to apply activity-based management to optimise use of resources.’

115 In Section 2.4.2 entitled ‘Resource programming for 2017-20’, that document goes on to state as follows:

‘The estimate for the 2017-20 draft budget respects the budgetary constraints set out in the Commission communication on programming of human and financial resources for decentralised agencies [2014-20] (COM(2013) 519 final). In November 2016, Cedefop received information of an unexpectedly high retroactive salary adjustment (+3.3%) which is only offset slightly by a further drop in the weighting factor (-0.6%). These figures have resulted in a significant budgetary shortfall in Title 1 (staff costs) which, in 2017, Cedefop will cover by expanding the list of negative priorities across all Titles. The next programming document for the period 2018-20 will further address the impact of the salary adjustments rate for 2018 and beyond. This recent development illustrates the vulnerability of Cedefop’s budgetary planning and management to external factors which are completely outside its control and where experience is not a reliable guide. The budgetary impact of the 2016 salary adjustment, carried forward into 2017 and beyond (and possibly compounded by comparably high adjustments in the coming years) makes the cap on Title 1 expenditure unsustainable and had to be offset by setting additional negative priorities throughout the programming period …’

116 Furthermore, in Section 2.4.2.2, entitled ‘Human Resources’, that document adds, inter alia, that ‘to ensure the Agency’s responsiveness to evolving priorities and new tasks, the increasingly acute staff shortfall will need to be addressed through clear negative priorities or additional staff’ (paragraph 95).

117 That document also states, under the heading ‘Efficiency gains’ in the part entitled ‘Resource outlook for 2017-2020’, as follows:

‘The additional 5% cut in connection with the redeployment pool puts the Agency under acute pressure to streamline further. While there is limited residual scope for substantial further efficiency gains within existing regulatory and compliance constraints, the following initiatives are foreseen for 2017-20: … (b) use of (Commission) framework contracts, wherever possible, to reduce administrative overheads; … (f) use, as appropriate, of the interagency shared services catalogue …’ (paragraph 118).

‘For 2017 and beyond, the Department for resources and support has set negative priorities to absorb the budgetary impact of the unexpectedly high 2016 salary adjustment. These include: reduced professional development opportunities for staff, minimal resources for the greening agenda, reduced social measures and limited further ICT developments. These budgetary constraints are not sustainable beyond 2017 and this increasing shortfall will ultimately undermine the Agency’s ability to fulfil its mission and objectives. Specific (additional) negative priorities for the coming years must, by definition, be flexibly identified to respond to the dynamic policy environment.’

119 In the light of the foregoing, it must be held that the initiatives and negative priorities listed in the Programming Document do not refer to the function of Internal Legal Advisor. In addition, none of the provisions of the Programming Document provides a solid basis for justifying the possible abolition or outsourcing of Cedefop’s Legal Service, the applicant’s contract of employment being closely linked to the fate of that service, since that service consisted essentially of the applicant, an assistant performing secretarial tasks and a trainee post held by a Greek lawyer.

120 First, it should be noted that the Programming Document makes no reference to Cedefop’s Legal Service. The sole references to Cedefop’s ‘Legal Advisor’ appear in Annex VII, entitled ‘Evaluations’, and in Annex X, which contains Cedefop’s organisation chart for 2017. It must be noted that none of these annexes relates to the issue of staff reduction. On the contrary, the fact that the function of ‘Legal Advisor’ appears in the organisation chart, showing the applicant’s name, might even suggest that the essential nature of that service should be taken for granted.

121 Second, although the Programming Document cites, in paragraph 118, in the context of the initiatives undertaken in order to deal in particular with the budgetary impact of the high salary adjustment of 2016, the use, as far as possible, of ‘Commission framework contracts’, that measure cannot concern the Legal Service. Such framework contracts are designed for the delivery of specific projects, such as those which are the subject of the award of public contracts, and cannot replace the functions of Internal Legal Advisor. Moreover, that measure was intended to ‘reduce administrative overheads’, whereas the Legal Service was not part of the administration, but of the Directorate, and was therefore not covered by that proposal. Similarly, that document recommends, in paragraph 118, use ‘of the interagency shared services catalogue’, which, however, did not cover the services of an internal legal advisor.

122 Third, although the Programming Document notes, in paragraph 119, the need to identify specific additional negative priorities in order to ‘respond to the dynamic policy environment’, that need clearly relates to Cedefop’s operational areas and cannot fall within the area of compliance with standards and the regulatory framework which a legal advisor ensures.

123 Fourth, Cedefop cannot maintain that the Programming Document does not provide any guarantee that the position of Internal Legal Advisor will not be affected, by relying particularly on the finding that the initiatives described in paragraph 119 thereof did not concern one specific budget item. Cedefop cannot rely on the general nature of the initiatives described in the Programming Document in order to take action as specific as the abolition of the Legal Service. On the contrary, paragraph 119 lists the initiatives exhaustively and, for the reasons set out above, does not affect the post of Internal Legal Advisor. This is also apparent from the fact that paragraph 118 states that those initiatives are envisaged while recognising the ‘limited residual scope for substantial further efficiency gains within existing regulatory and compliance constraints’.

124 Furthermore, it may be inferred that the negative priorities were not intended to affect the Cedefop’s Internal Legal Service from the fact that, before the matter was brought to the attention of Cedefop’s Bureau by the letter of 14 March 2017 from the applicant’s lawyer, the matter had never been discussed either within the Bureau or within Cedefop’s Governing Board which had discussed and approved the Programming Document. Moreover, it is apparent from the file that the remarks made by one of the members of the Governing Board at the meeting of the Enlarged Bureau of 17 March 2017 were reported as follows:

‘In the last Enlarged Bureau meeting, negative priorities and ways to overcome financial problems were discussed. However, the outsourcing of [the] legal service was not mentioned. [T]he Director [was asked] to explain why this proposal had not been discussed before and to inform members of the rationale of his actions.’

125 Consequently, it must be concluded that the negative priorities identified in the Programming Document did not affect the applicant’s post in any way and cannot be relied on to justify the outsourcing of Cedefop’s Legal Service and, a fortiori, the non-renewal of the applicant’s contract.

126 That conclusion cannot be invalidated by the other arguments put forward by Cedefop in the defence, even if those arguments could be regarded as factors which were taken into account by the Director when he adopted the decision of 12 May 2017.

127 First, as regards the argument that administration costs accounted for approximately one third of Cedefop’s total budget, it should be noted that the applicant’s post was not considered part of the administration and that, moreover, an amount of EUR 195 000 for the Legal Service represented approximately 1% of that budget, which amounted to approximately EUR 18 million. Accordingly, those financial data cannot, as information available to the Director at the time of the adoption of the decision of 12 May 2017, prove or justify the need to outsource or even eliminate the post of Internal Legal Advisor.

128 Second, as to the fact that the Union legislature regularly highlights the advantages of shared services between agencies, it is sufficient to note (i) that the document relied on by Cedefop in support of its argument (European Parliament document P8_TA-PROV(2018)0133, ‘Discharge 2016: Performance, financial management and control of EU agencies’) is addressed to all agencies and (ii) that it does not support the contention that the use of shared services in the administration authorised agencies to abolish or outsource their own Internal Legal Services. That document refers to the strengthening of cooperation between agencies in the field of procurement, human resources and finance issues, which are administrative services.

129 Third, as regards the argument that a review of the administration and of the Legal Service was about to start and that the conclusions drawn from such a review would very probably have an impact on the internal structure of the services, and as regards the argument that the renewal of the applicant’s contract would entail the conclusion of a contract for an indefinite period, it is true that, as the applicant acknowledges, the administration may be justified in taking decisions relating to the renewal of contracts in the light of foreseeable developments.

130 However, in the present case, the decision of 12 May 2017 was adopted a few days prior to the end of the period of six months before the expiry of the applicant’s contract (in accordance with the internal note of the Director of Cedefop of 30 October 2013) and, according to that decision, the applicant’s post of Legal Advisor would ‘be transferred to operational areas of work’ and her tasks would be ‘carried out through alternative internal arrangements, with support from other EU bodies and external legal expertise’. It is therefore apparent from the very wording of the decision of 12 May 2017 that, on the date on which that decision was adopted, the Director justified it by the abolition of the Internal Legal Service, even though discussions were ongoing in this regard and the decision to abolish it did not exist.

131 In actual fact, as is apparent from the background to the dispute, at the time of the adoption of the decision of 12 May 2017, there were no foreseeable developments concerning the future of the Internal Legal Service. Indeed, between 14 February 2017 (the date of the meeting between the Director and the applicant) and 12 May 2017 (the date on which the decision of the same date was adopted), the Director did not take any action which resulted in a more certain position being taken. It must be recalled that it was only on 17 March 2017, at a meeting of the Enlarged Bureau of Cedefop’s Governing Board, that it was decided that the Director should consult the Governing Board before taking any decision about the Internal Legal Service, which would constitute a major organisational transformation for Cedefop. In his letter of 31 March 2017 to the applicant’s lawyer, the Director stated that he was ‘considering the possible renewal of [the applicant’s] temporary contract’, that he was ‘currently analysing and assessing how best to secure legal advice for Cedefop’ and that he would then make ‘an informed and reasoned decision concerning the renewal of [the applicant’s] contract’. Next, it was only on 12 April 2017 that the Director announced the creation of a Working Group on the Legal Service. A draft interim report of that working group was reportedly submitted to the Governing Board on 11 May 2017, one day before the adoption of the decision of 12 May 2017. Although that draft interim report is not available in the file, it is clearly apparent from the meeting of the Bureau of the Governing Board of 29 and 30 June 2017 that the latter concluded that the Working Group had not achieved satisfactory results and that Cedefop should call for the assessment of an external expert.

132 Consequently, on the date on which the decision of 12 May 2017 was adopted, the discussions relating to the future of the Internal Legal Service and therefore of the applicant’s post were still ongoing and had not yet resulted in a decision.

133 It is recalled that, on 9 March 2017, the six Heads of Department of Cedefop sent a note to the Director to express their concern about his intention to outsource the Legal Service (see paragraph 24 above).

134 The Appeals Committee noted that one of the six Heads had withdrawn his support for the note on the ground that ‘the circumstances of the situation were presented to him in an imprecise manner’ and that, ‘therefore, since his understanding of the situation was not accurate’, he could no longer support the position expressed in the joint letter of 9 March 2017.

135 Cedefop contends that, in any event, the Director could legitimately consider that the arguments contained in the joint letter of 9 March 2017 did not call into question the other contextual elements at his disposal.

136 It must be held that, even if it were to be assumed that the note of 9 March 2017 was not capable of calling in question the decision of 12 May 2017, the factors examined above relating to budgetary constraints did not make it possible to justify that decision.

137 Even though it must be assumed that the Director was, at the very least, aware of the applicant’s personal situation when he adopted the decision of 12 May 2017 and that he was able to decide, notwithstanding the applicant’s obvious interest in the renewal of her contract, not to renew it because of the interest of the service and, in particular, ‘the pressures on [Cedefop’s] resources and the consistent requirement to align human resources to strategic operational needs’, it should be recalled that the Court found above that the negative priorities identified in the Programming Document could not be relied on to justify the abolition of Cedefop’s Internal Legal Service and, a fortiori, the non-renewal of the applicant’s contract. It must therefore be concluded that in the present case the interest of the service which was supposed to form the basis of the decision of 12 May 2017 was not established.

138 In the light of the foregoing considerations, the Director made a manifest error of assessment such as to justify the annulment of the contested decision. Indeed, in view of the ongoing discussions concerning the future of the Legal Service and in the absence of a sound basis justifying the abolition of the Internal Legal Service and the non-renewal of the applicant’s contract, and in the light of the numerous items of evidence adduced by the applicant, in particular before the Appeals Committee of Cedefop (for example, the preliminary report of the Working Group on the Legal Service of 7 June 2017 and the IAS’s note of 28 September 2017), which show that the Director acted virtually alone and against the reasoned positions of a number of heads of department and of the IAS, the Director’s assessments in the decision of 12 May 2017 were, on the date of its adoption, entirely implausible.

139 It follows that the sixth plea raised by the applicant, alleging a manifest error of assessment, must be upheld.

140 In addition, it should be recalled that in the decision of 12 May 2017, the Director stated as follows:

‘I am afraid that the way you have handled your case, by involving staff and the Governing Board and by intimidating me through legal arguments, namely suggesting that I am “obliged” to renew your contract, and other opportunity considerations [do] not leave me any room for renewing your contract.

I would have much preferred you to have addressed the matter with me in an objective and substantiated manner, as you were and are always welcome to do.

‘The decision appears to be based on the relevant elements as spelt out by the case-law. The reference in the decision to the “loss of trust” is not presented in the decision among the elements that the Director took into account when it examined the potential renewal of the [applicant’s] contract. The Director adds this remark after he invokes the elements on which he based his decision. And even if it could be argued that the “loss of trust” was amongst the reasons relied upon by the Director, …, according to the case-law, the competent authority has a broad discretion as regards the assessment of the interest of the service. That assessment implies taking into account several elements at the competent authority’s disposal, and amongst those, the relational aspects could be a relevant issue to consider …

Moreover, contrary to what the complaint implies, the contested decision does not refer to the [applicant’s] “deficient” performance. Indeed, the Director refers to an alleged “loss of trust” in [the applicant] following the events related to the potential non-renewal of her contract. However, the decision does not link that “loss of trust” to the content of previous reviews and appraisals of the [applicant’s] performance. In fact, the “loss of trust” that the Director mentions in the contested decision only intervened after the [applicant’s] appraisals.

In the light of the above, it cannot be concluded that the contested decision was based on undocumented deficiencies in the [applicant’s] conduct as the complaint alleges. Thus, in the meeting held on 16-17 November 2017, the Appeals Committee decided that this allegation is unfounded.’

142 It follows from the foregoing that, according to the analysis carried out by the Appeals Committee, the reference to ‘loss of trust’ is not among the factors taken into account by the Director when considering the possible renewal of the applicant’s contract.

143 However, it should be noted that the decision rejecting the complaint also carries out a subsidiary analysis, claiming that ‘even if it could be argued that the “loss of trust” was amongst the reasons relied upon by the Director, … the competent authority has a broad discretion as regards the assessment of the interest of the service’, which involves taking relational aspects into account. Such reasoning, although carried out in the alternative, cannot preclude the possibility that the loss of trust had an impact on the Director’s reasoning when the decision of 12 May 2017 was taken. Indeed, the wording of that decision, whose reasoning is deemed to coincide with that of the decision rejecting the complaint, is very clear in this respect (‘your persistent behaviour since our meeting on 14 February 2017 has taken from me any sense of trust in you, creating a wall between us rendering any future cooperation impossible’). Therefore, it cannot be ruled out that that remark on the loss of trust constitutes an independent ground for the decision of 12 May 2017, distinct from the ground relating to the budgetary constraints on Cedefop.

144 That is why it is also necessary to examine the first and second pleas raised by the applicant, in so far as it cannot be ruled out that one of the grounds for the non-renewal decision might have been loss of trust.

146 Under the first part, the applicant alleges breach of the right to be heard before the adoption of the decision of 12 May 2017. Since that right was not respected, both the decision of 12 May 2017 and the decision rejecting the complaint should be annulled.

147 The applicant submits, inter alia, that she was not heard, and had no possibility of making her views known, on the issue of the alleged loss of trust relied on in the decision of 12 May 2017.

148 Under the second part of the first plea, the applicant alleges a breach of her right to be heard by the Appeals Committee before the decision rejecting the complaint was adopted.

149 As regards the first part of the first plea, more specifically as regards the reference in the decision of 12 May 2017 to a loss of trust, Cedefop contends that, as was stated in the decision rejecting the complaint, loss of trust is not presented in the decision of 12 May 2017 as one of the factors that the Director took into account when he examined the potential renewal of the applicant’s contract, but as a mere remark in relation to her behaviour over recent weeks.

150 As regards the second part of the first plea, alleging breach of the right to be heard by the Appeals Committee before the decision rejecting the complaint, Cedefop also disputes the applicant’s arguments.

151 As a preliminary point, as was stated in paragraph 103 above, although Article 8 of the CEOS makes it possible to renew a temporary staff contract, it is not an entitlement, but merely a possibility left to the discretion of the competent authority (see judgment of 22 March 2018, HJ v EMA, T‑579/16, not published, EU:T:2018:168, paragraph 85 and the case-law cited).

152 Nevertheless, respect for the right to be heard is, in all procedures initiated against a person which are liable to culminate in a measure adversely affecting that person, a fundamental principle of EU law which must be guaranteed even in the absence of rules governing the procedure in question (see, to that effect, judgment of 3 June 2015, BP v FRA, T‑658/13 P, EU:T:2015:356, paragraph 51 and the case-law cited).

153 It follows from that principle that the person concerned must be given the opportunity, before the drawing up of a decision adversely affecting him or her, to make his or her views effectively known as to the truth and relevance of the facts and circumstances on which that decision was based (see judgment of 11 September 2013, L v Parliament, T‑317/10 P, EU:T:2013:413, paragraph 80 and the case-law cited). That principle has been repeated in Article 41(2)(a) of the Charter of Fundamental Rights of the European Union, which acknowledges ‘the right of every person to be heard, before any individual measure which would affect him or her adversely is taken’, a provision which has been found by the EU judicature to be of general application (see, to that effect, judgment of 11 September 2013, L v Parliament, T‑317/10 P, EU:T:2013:413, paragraph 81 and the case-law cited).

154 Moreover, such a decision not to renew a contract of service can be taken only after the person concerned has been given the opportunity to put forward his or her view concerning the draft decision, in the context of an oral and/or written exchange of views initiated by the AECE, proof of which must be adduced by the latter (see, to that effect, judgment of 3 June 2015, BP v FRA, T‑658/13 P, EU:T:2015:356, paragraph 54 and the case-law cited).

155 Furthermore, it has been held that the right to be heard is observed more effectively when the person concerned is able to express his or her view in full knowledge of all the elements that are available to the AECE (see, to that effect, judgment of 3 June 2015, BP v FRA, T‑658/13 P, EU:T:2015:356, paragraph 57 and the case-law cited).

156 Lastly, it should be borne in mind that, according to settled case-law, an infringement of the right to be heard results in the annulment of the decision taken at the end of a procedure only if, had it not been for such an irregularity, the outcome of the procedure might have been different (see judgment of 4 April 2019, OZ v EIB, C‑558/17 P, EU:C:2019:289, paragraph 76 and the case-law cited).

157 It is in the light of those principles that it is necessary to assess the applicant’s arguments alleging a breach of the right to be heard, in particular on the separate ground of the decision of 12 May 2017 alleging a loss of trust.

158 In the present case, it must be held that the decision of 12 May 2017 affected the applicant’s administrative situation and that such a decision could be taken only after she had been given the opportunity to make her views on the proposed decision effectively known, in the context of an oral or written exchange with the Director.

159 It must therefore be assessed whether the applicant was given the opportunity to make her views effectively known to the Director, either orally or in writing, on the alleged loss of trust in her.

160 In the first place, as regards the oral exchanges between the applicant and the Director, it is common ground between the parties that the first and only occasion on which the applicant had the opportunity to make known orally her views on the non-renewal of her contract was the meeting of 14 February 2017, at which the Director informed her that he was considering not renewing her contract. By an email sent to the applicant on the same day, the Director described the content of that meeting, stating that, ‘owing to financial and human resource pressures on Cedefop’s operations’, it was in the interest of the organisation to ‘consider not renewing [her] contract’. That position was reiterated in his email of 16 February 2017 to the applicant and in his letter of 31 March 2017 to the applicant’s lawyer. In that letter, the Director explained that, at the time of the meeting of 14 February 2017, he was ‘considering the possible renewal of [the applicant’s] temporary contract’ and that he ‘[was] not in any position to sign the renewal, as [he was] still considering all options and implications’.

161 It follows from the foregoing that, at that meeting of 14 February 2017, the Director did not provide the applicant with any evidence relating to a loss of trust. That meeting was preliminary and probably motivated by the concern to comply with the time limit laid down in the internal note from the Director of Cedefop of 30 October 2013, entitled ‘Timelines for information about renewal of contracts’. The fact that that meeting was held not on the initiative of the Director, as required by the case-law, but on that of the applicant, confirms that assessment.

162 In the second place, as regards the written exchanges between the applicant and the Director, it is true that it is apparent from the file that the applicant expressed her views on the possible abolition of the Internal Legal Service in writing on a number of occasions, in particular by her email of 14 February 2017 following their meeting of the same day, and by means of the various written exchanges in support of her request for renewal which took place between 14 February and 12 May 2017, the date of adoption of the decision of the same day. However, all those exchanges related to a challenge of a potential abolition of Cedefop’s Internal Legal Service on the basis of abstract considerations. They did not relate to any loss of trust by the Director in the applicant.

163 In the absence of any other written submissions from the Director or any other invitation to a meeting prior to the adoption of the decision of 12 May 2017, it must be concluded that, despite the applicant’s numerous written submissions for her contract to be renewed, she was not given an opportunity to express her views in full knowledge of all the elements that were available to the Director, as the AECE, concerning the proposed decision, in the context of a written or oral exchange initiated by the AECE as required by the case-law. In particular, the applicant was unaware of the factors which might have led the Director to plead a loss of trust in order to justify the decision of 12 May 2017.

164 In the third place, as regards the consequences to be drawn from such a breach of the right to be heard, it should be recalled that, in accordance with the case-law cited above, it may result in the annulment of the decision taken at the end of a procedure only if, had it not been for such a breach, the outcome of the procedure might have been different.

165 In that regard, it cannot be ruled out that, if the applicant had been heard within the meaning of Article 41 of the Charter of Fundamental Rights and, in particular, if she had been aware of all the relevant factors underlying the decision of 12 May 2017, she would have had the opportunity to influence the decision-making process at issue. She would have been able to express her views in full knowledge of the elements which were at the Director’s disposal and which supported the ground for non-renewal based on a loss of trust in her. To concede that, even if the applicant had been heard, the outcome would have been the same in the present case and that the applicant’s contract would not, in any event, have been renewed would amount to rendering the right to be heard meaningless (see, to that effect, judgment of 17 May 2018, Josefsson v Parliament, T‑566/16, not published, EU:T:2018:278, paragraph 46).

166 It follows from the foregoing considerations that the first part of the first plea alleging breach of the right to be heard must be upheld, without it being necessary to rule on the second part of that first plea, according to which the Appeals Committee of Cedefop infringed the right to be heard before the decision rejecting the complaint was adopted.

The second plea, alleging breach of the rights of the defence and of Article 26 of the Staff Regulations

167 The applicant submits that the decision of 12 May 2017 alleges conduct which gave rise to a loss of trust, although such alleged conduct was never brought to her attention and does not appear in her personal file, in breach of her rights of defence and Article 26 of the Staff Regulations. She submits that the administration is not justified in reaching the radical conclusion of a loss of trust without any alleged deficient conduct being properly recorded prior to such conclusion. Raising the notion of ‘loss of trust’ without any supporting facts may be regarded, according to the applicant, as insulting and defamatory, damaging her good name, reputation and dignity. Furthermore, the applicant highlights the staff report dated 15 June 2017, which praised her excellent performance and conduct.

168 In the reply, the applicant disputes Cedefop’s assertion that the events giving rise to a loss of trust were very recent and therefore could not be documented in her personal file, claiming that such an addition could have been made within a period of one or two days and that nothing prevented the Director from adding them to the personal file between February and November 2017, in compliance with the proper procedure and the right to be heard.

169 Cedefop contends that the second plea in law should be rejected as unfounded.

170 First, the Director’s remark concerning a loss of trust refers to the very recent events related to the potential non-renewal of the applicant’s contract. Consequently, such events could not have been documented in the applicant’s personal file.

171 Second, the applicant was very well aware of the ground for the remark of the Director concerning a loss of trust. Indeed, after the meeting of 14 February 2017, the Director wrote to the applicant to explain that he was very disturbed at her comments that she planned to use her legal network to place pressure on him, that she intended to sue him personally to embarrass him and Cedefop and to prevent the renewal of his contract. It can therefore be reasonably understood that the Director had lost trust in the applicant.

172 As a preliminary point, respect for the rights of the defence is a fundamental principle of EU law which must be guaranteed even in the absence of any rules. That principle requires that the addressees of decisions which significantly affect their interests be placed in a position in which they may effectively make known their views on the accusations which might be made against them in that decision (see, to that effect, judgment of 20 November 2007, Ianniello v Commission, T‑308/04, EU:T:2007:347, paragraphs 68 and 69).

173 Article 26 of the Staff Regulations – applicable by analogy in the present case by virtue of Article 11 of the CEOS – provides that the personal file is to contain all documents concerning an official’s administrative status and all reports relating to his or her ability, efficiency or conduct, together with any comments by the official on such documents.

174 According to settled case-law, the purpose of Article 26 of the Staff Regulations is to ensure compliance with the rights of defence of an official or of a member of the temporary staff engaged under the CEOS by preventing decisions by the appointing authority or the AECE which affect his or her administrative status and career from being based on facts concerning his or her conduct which are not mentioned in his or her personal file (see judgment of 7 February 2007, Caló v Commission, T‑118/04 and T‑134/04, EU:T:2007:37, paragraph 256 and the case-law cited).

175 It should be added that infringement of Article 26 of the Staff Regulations does not entail the annulment of a measure unless it is established that the documents in question could have had a decisive influence on the decision at issue. The mere fact that documents were not placed on the personal file is not enough to justify annulment of a measure adversely affecting the person concerned if they were in fact brought to his or her knowledge (judgment of 12 November 1996, Ojha v Commission, C‑294/95 P, EU:C:1996:434, paragraphs 67 and 68).

176 It is in the light of those principles that the merits of the second plea must be examined.

177 In the present case, first of all, it should be borne in mind that it cannot be ruled out that the ‘loss of all trust’ constitutes a separate and independent ground for the non-renewal of the applicant’s contract (see paragraphs 140 to 143 above).

178 Nor can it be ruled out that such a ground for non-renewal could have been detrimental to the applicant, in particular to her good name and reputation, and thus affect her administrative status and career (see, to that effect, judgment of 7 February 2007, Caló v Commission, T‑118/04 and T‑134/04, EU:T:2007:37, paragraph 256 and the case-law cited). It must therefore be ascertained whether behavioural matters capable of justifying a loss of trust were in fact included in the applicant’s personal file.

179 In that regard, first, it is common ground between the parties that the applicant’s file does not contain any documents or reports concerning her conduct. Cedefop explained that the Director’s remark concerning a loss of trust referred to recent events which took place after the meeting of 14 February 2017 and which could not be documented in the applicant’s personal file.

180 Such a justification cannot be accepted. As the applicant rightly states, the events which gave rise to the loss of trust could easily and quickly have been filed, in accordance with the procedure laid down in Article 26 of the Staff Regulations, in her personal file before the adoption of the decision of 12 May 2017. Such a procedure would have enabled her to comment on those documents. Despite the broad discretion enjoyed by the Director when considering the possible renewal of the contract, those documents could have been relied on against the applicant only if they had been communicated to her before they were filed.

181 Second, in accordance with settled case-law, the mere fact that documents were not placed on the personal file is not enough to justify annulment of a measure adversely affecting the person concerned if they were in fact brought to his or her knowledge (judgment of 13 September 2005, Recalde Langarica v Commission, T‑283/03, EU:T:2005:315, paragraph 68 and the case-law cited).

182 In that regard, Cedefop contends, in essence, that the applicant was very well aware of the ground for the Director’s remark, since, after the interview of 14 February 2017, he wrote to her to explain that he was very disturbed by her comments that she was considering using her legal network to place pressure on him and intended to sue him personally to embarrass him and Cedefop and to prevent the renewal of his contract. However, the applicant denied having threatened the Director, explaining, in essence, that she had ‘merely stated’ that she ‘would use all procedural and legal means available to [her] as [a] long-standing lawyer and legal expert who has a myriad of personal and professional acquaintances who happen to be lawyers and EU experts too’. The Director thanked her for those clarifications in his email of 16 February 2017.

183 Following that exchange, the Director did not raise any further matters relating to the applicant’s conduct on which she could have taken a position. According to the contested decisions, the loss of trust in the applicant occurred as a result of the events connected with the potential non-renewal of her contract, in particular because the applicant ‘involv[ed] staff and the Governing Board’ and ‘intimidat[ed]’ the Director ‘through legal arguments’. Cedefop does not contend that those behavioural allegations were the subject of another communication by the Director and that they were therefore actually brought to the applicant’s attention.

184 In the light of the foregoing, the second plea must be upheld as well founded. The events to which the Director refers in the decision of 12 May 2017 in order to justify the loss of trust should have been included in the applicant’s personal file or at least actually been brought to her attention. However, that was not the case.

185 It follows that the second plea, alleging breach of the rights of the defence and of Article 26 of the Staff Regulations, must be upheld.

186 Since the General Court has upheld the sixth plea in law, as well as the first and second pleas in law, and without it being necessary to examine the other pleas raised by the applicant, the contested decisions must be annulled.

187 The applicant submits that she has demonstrated that the decision of 12 May 2017 is unlawful and that, as a result of that unlawful decision, she has suffered material and non-material damage which Cedefop must make good.

188 As regards the material damage, the applicant submits that it includes, among other factors, the difference between her projected income over the remaining 14 years of her projected career until retirement age and her current income under the unemployment insurance scheme of the EU institutions. According to the applicant, from the age of retirement, the material damage includes the difference between the pension level achieved and the level she would have achieved had the wrongful act not been adopted.

189 As regards the non-material damage, the applicant explains that it is composed of the emotional and psychological harm as well as the stress to which she was exposed without reason from mid-February 2017, which also led, as the medical certificate of 9 February 2018 appended to the application shows, to continuous and serious medical problems. She emphasises the seriousness of the infringements committed by Cedefop and its Director and the damage inflicted on her reputation. She submits that the annulment of the decision of 12 May 2017 is not capable of constituting in itself adequate and sufficient compensation and therefore requests the Court to establish the non-material damage ex aequo et bono at EUR 120 000.

190 Cedefop takes the view that the claim for damages must be rejected in its entirety, arguing that it is settled case-law that a claim for compensation for damage must be rejected where there is a close connection between that claim and a claim for annulment which has been rejected as unfounded.

191 According to settled case-law, an EU institution or agency can be held liable in damages only if a number of conditions are satisfied: the illegality of the allegedly wrongful act committed, actual harm suffered, and the existence of a causal link between the act and the damage alleged to have been suffered (judgments of 16 December 1987, Delauche v Commission, 111/86, EU:C:1987:562, paragraph 30, and of 27 November 2003, Bories and Others v Commission, T‑331/00 and T‑115/01, EU:T:2003:317, paragraph 192).

192 Since the first, second and sixth pleas in law have been upheld, the decision of 12 May 2017 is unlawful. The first condition for holding Cedefop liable, namely the illegality of the allegedly wrongful act committed, is therefore satisfied.

193 As regards the other two conditions, the actual harm suffered and the causal link, a distinction must be drawn between the material and the non-material damage.

194 The applicant claims that her material damage consists of the total income which she would have received if her contract had been renewed until retirement age, and even after reaching that age, minus the income which she would actually receive during that period. She does not propose any quantification of that loss.

195 It is apparent from the file that, in the absence of the decision of 12 May 2017, it is possible that the applicant’s contract would have been renewed, moreover for an indefinite period under the first paragraph of Article 8 of the CEOS. At the end of January 2017, the Deputy Director, who was at that time the applicant’s line manager and reporting officer, recommended to the Director, as the AECE, that the applicant’s contract which was due to expire on 16 November 2017 be renewed. In support of her recommendation, the Deputy Director submitted a very positive appraisal report of the applicant to the Director. It should also be noted that the applicant had been Cedefop’s Legal Advisor since 16 November 2007 and that, consequently, when the decision of 12 May 2017 was adopted, she had held that position for almost 10 years. Her contract had, moreover, been renewed for the first time on 16 November 2012 and it is not disputed that, throughout her career at Cedefop, the applicant had performed her duties more than satisfactorily, as is apparent, in particular, from the opinions expressed by the Director of the Human Resources Department and the Deputy Director. Lastly, following the adoption of the decision of 12 May 2017, the applicant received in June 2017 the official appraisal of her professional performance for 2016, according to which she had ‘worked consistently with a high degree of efficiency, professionalism and accuracy, and … she possesses the knowledge, skills and competences needed to perform her job to a high standard and to the full satisfaction of all concerned’.

196 Although the administration has a broad discretion with respect to the renewal of a contract of employment (judgment of 10 October 2014, EMA v BU, T‑444/13 P, EU:T:2014:865, paragraph 28), the considerations set out in paragraph 195 above constitute a series of sufficiently precise and plausible elements to show that the applicant had a genuine and serious chance of her contract being renewed for an indefinite period (see, to that effect, judgment of 10 November 2010, OHIM v Simões Dos Santos, T‑260/09 P, EU:T:2010:461, paragraph 105).

197 By decision of 12 May 2017, the applicant’s contract of employment was terminated with effect from the date on which it expired, namely 15 November 2017. It therefore deprived the applicant of the opportunity of her contract being extended, thus causing her material damage.

198 According to case-law, in order to determine the amount of compensation to be paid in respect of loss of opportunity, it is necessary, having identified the nature of the opportunity of which the official or member of the temporary staff has been deprived, to determine the date from which he or she would have been given that opportunity, and then quantify that opportunity and, lastly, explain the financial consequences for the official or member of the temporary staff of that loss of opportunity (see judgment of 24 October 2018, Fernández González v Commission, T‑162/17 RENV, not published, EU:T:2018:711, paragraph 118 and the case-law cited).

199 In addition, according to case-law, where possible the opportunity of which an official or a member of the temporary staff has been deprived must be calculated objectively, in the form of a mathematical coefficient resulting from an accurate analysis. However, where that opportunity cannot be quantified in this way it is accepted that the damage suffered may be assessed ex æquo et bono (see judgment of 24 October 2018, Fernández González v Commission, T‑162/17 RENV, not published, EU:T:2018:711, paragraph 119 and the case-law cited).

200 In the present case, the applicant lost the opportunity of her contract being extended for an indefinite period from 15 November 2017, the date of expiry of her last fixed-term contract. It is not possible to quantify that opportunity and specify the financial consequences of her loss. The applicant has not proposed any quantification of her material damage and, in the circumstances of the present case, calculating that damage would depend on various assumptions, in particular as regards the total duration of the applicant’s career at Cedefop or the promotions which she might have obtained. Consequently, it is appropriate to assess, in the light of all the circumstances of the case, the damage suffered ex æquo et bono (see, to that effect, judgment of 21 February 2008, Commission v Girardot, C‑348/06 P, EU:C:2008:107, paragraph 58).

201 It follows that, in view of the circumstances of the case, and in particular the fact that the applicant had been in her post for almost 10 years, that her staff reports were very positive and that she therefore lost a genuine opportunity of having her contract renewed for an indefinite period, fair compensation for the entire material damage suffered by the applicant will be afforded by ordering Cedefop to pay her the lump sum of EUR 30 000.

202 As regards the non-material damage, the applicant claims that the decision of 12 May 2017, the circumstances surrounding the adoption of that decision and the conduct of Cedefop’s Director caused her psychological suffering resulting in medical problems. In support, she produced a medical certificate confirming that ‘[the applicant’s] condition was triggered and sustained by the negative work environment over a long period of time (since early 2017)’.

203 Cedefop does not put forward in defence any argument as to the existence of material or non-material damage which it is alleged to have caused the applicant. It merely contends that the absence of unlawfulness of the decision of 12 May 2017 must lead to the rejection of the claim for compensation.

204 It must be held that the applicant has established to the requisite legal standard that she suffered non-material damage and that that damage was caused to her by the decision of 12 May 2017 and the circumstances surrounding its adoption which are attributable to Cedefop. The General Court considers that the uncertainty surrounding the question of the renewal of the applicant’s contract of employment between the date on which she learned that her contract might not be renewed (14 February 2017) and the decision of 12 May 2017 gave rise to a feeling of insecurity as regards her professional future, causing her stress and anxiety. That is not disputed by Cedefop, which did not moreover comment on the medical certificate produced by the applicant in support of her claim for compensation.

205 Furthermore, in the present case, the annulment of the decision of 12 May 2017 cannot in itself constitute sufficient compensation. The consequences of the non-renewal of the applicant’s contract, other than the material consequences, in particular those on her health, dignity and professional reputation, cannot easily be corrected (see, to that effect, judgments of 18 September 2015, Wahlström v Frontex, T‑653/13 P, EU:T:2015:652, paragraphs 82 to 85, and of 12 December 2013, CH v Parliament, F‑129/12, EU:F:2013:203, paragraphs 64 and 65).

206 Accordingly, it must be held that the specific circumstances of the case are fairly assessed by setting, ex æquo et bono, compensation for the non-material damage suffered by the applicant at EUR 10 000.

207 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

208 In the present case, since Cedefop has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant.

1. Annuls the decision of the European Centre for the Development of Vocational Training (Cedefop) of 12 May 2017 not to renew VP’s contract as a member of the temporary staff;

3. Orders Cedefop to pay EUR 30 000 as compensation for the material damage sustained by VP;

4. Orders Cedefop to pay EUR 10 000 as compensation for the non-material damage sustained by VP;

Events occurring after the adoption of the decision of 12 May 2017 and up to the lodging of the complaint

Events subsequent to the lodging of the complaint and until the adoption of the decision rejecting the complaint

The admissibility of one of the grounds of challenge of the first plea alleging breach of the right to be heard

The sixth plea in law, alleging a manifest error of assessment and failure to have regard to the interests of the service

The second plea, alleging breach of the rights of the defence and of Article 26 of the Staff Regulations

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> VP v Cedefop (Civil service - Request for renewal of a contract for an indefinite period - Judgment) [2020] EUECJ T-187/18 (16 December 2020) URL: http://www.bailii.org/eu/cases/EUECJ/2020/T18718.html Cite as: [2020] EUECJ T-187/18, ECLI:EU:T:2020:613, EU:T:2020:613

Court of Justice of the European Communities (including Court of First Instance Decisions)