Coronavirus Spain · Urgent, Extraordinary Employment Measures

19 March 2020 - Monika Bertram

Following the appearance on 17 March of the President of the Spanish Government, the Official State Gazette (BOE) published Royal Decree-Law 8/2020, of 17 March, on urgent, extraordinary measures to deal with the economic and social impact of the coronavirus.

We have prepared a summary for you of the measures granted by the government to facilitate matters, distinguishing whether the ERTE or procedure to reduce the workday is processed due to force majeure or if, on the contrary, it follows due to economic, organisational, technical or production reasons.

These measures are exceptional and are linked to the extraordinary situation arising from the coronavirus. Nevertheless, Final Provision 10 of the regulation indicates that the measures shall remain valid for one month from their entry into force, without prejudice to potential subsequent extensions by the government.

It must be taken into account that a company may only apply these extraordinary, labour-related measures if it can maintain the employment position for a term of six (6) months from the date activity is resumed (Additional Provision 6).

1) Proceedings for the suspension of contracts (ERTE) or workday reduction due to force majeure

Causes

  1. Loss of activity as a consequence of the coronavirus, including the state of alarm, which imply:
    1. Suspension or cancellation of activities,
    2. Temporary closing of public gathering places,
    3. Restrictions on public transport,
    4. Restrictions on the mobility of persons and/or goods,
    5. Lack of supplies that seriously hinder the continuance of the ordinary carrying out of the activity,
    6. Urgent and extraordinary situations due to the infection of the staff or the adoption of isolation measures decreed by the health authorities, duly proven.

Procedure

  1. Application by the company to the labour authorities, accompanied by a report relative to how the loss of activity is a consequence of the coronavirus, as well as, if applicable, the corresponding documental proof.
  2. Notification of said application to the personas working and remittance of the aforementioned report and documental proof to the employees’ legal representatives (if these exist).
  3. The labour authority shall be the one to verify whether or not force majeure causes exist.
  4. The decision shall be processed within five (5) days from the date of application.

Effects

Suspension of the contracts from the date of the event causing force majeure.

Benefit

Exemption for the company of the corporate contribution of the Social Security quotas during the term of the ERTE/Workday Reduction, provided that the Company, as of 29 February 2020, had fewer than 50 employees. If it had more, exemption of the obligation to contribute shall amount to 75% of the corporate contribution.

2) Proceedings for the suspension of contracts (ERTE) or workday reduction due to economic, technical, organisation or production-related causes

Causes

These are defined in Article 47.1 of the Workers’ Statute but must be linked to the coronavirus.

Procedure

If there are no workers’ legal representatives, the workers may be represented during the consultation period by:

  1. A representative commission comprised of the most representative unions in the sector to which the company belongs with legitimisation to form part of the negotiating commission for the applicable bargaining agreement, or
  2. By a commission comprised of three workers (maximum) from the company itself, chosen according to what is set forth in Article 41.4 of the Workers’ Statute.

Whichever option is chosen, it must be set up within a non-extendable term of 5 days.

Documentation

The royal decree does not say anything in this respect; nevertheless, we believe it advisable to submit the documentation indicated in Article 18 and those following it of Royal Decree 1482/2012, of 29 October, which approves the regulations for collective dismissal procedures and workday reduction.

Consultation period

Reduced to seven days (nothing is said of a minimum number of meetings) without specifying the number of workers on staff.

Monika Bertram
Head of Labour Law