This is how the ERTE regulations will look on June 30
Patrick Gordinne Perez2025-01-17T18:01:50+00:00The Official State Gazette publishes Royal Decree-Law 18/2020, of 12 May, on social measures in defence of employment, following the Agreement reached with the social partners on Monday 11 May, the main measure of which is the extension of temporary employment regulation measures(ERTE regulations) due to force majeure until 30 June.
ERTE regulation
Specifically, the measures adopted in this Royal Decree-Law refer to the following:
Measures for ERTES due to force majeure affecting the entire workforce.
Companies and professionals whose activity has been suspended and cannot be resumed and who have applied ERTES due to force majeure, linked to the Coronavirus (COVID-19), may extend these ERTES until 30 June 2020.
The ERTES are not linked to the De-escalation Plan and therefore, regardless of the Phase in which the region where the company or business in question is located, they may continue to apply the ERTE.
During the months of May and June 2020, companies and self-employed workers who have applied an ERTE will continue to “enjoy” the exemptions and reductions in contributions provided by the Government: 75% of the company contribution for companies with more than 50 workers and 100% for companies with less than 50 workers.
Measures for ERTES due to force majeure affecting part of the workforce (non-essential workers).
The following rules apply to companies and self-employed workers who have applied or are going to apply force majeure lay-offs to part of their non-essential workforce:
Extension of the force majeure ERTES linked to the Coronavirus until next 30 June. This will be partially, as the partial recovery of activity takes place.
The incorporation of workers to the labour activity will be a decision of the company, based on the proportion of workers it needs.
The following reductions are established for workers who are reinstated: in companies with less than 50 workers, they will enjoy an exemption from social security contributions of 85% in May and 70% in June, and in companies with more than 50 workers, they will enjoy an exemption from social security contributions of 60% in May and 45% in June.
With regard to workers who remain in ERTE, it is established that companies with more than 50 workers will enjoy an exemption from social security contributions of 60% in May and 45% in June and companies with more than 50 workers will enjoy an exemption from social security contributions of 45% in May and 30% in June.
Measures for ETOPs (ETOPs for ETOP causes)
Companies and self-employed workers who have implemented an ERTE for ETOP reasons will be governed by the following rules:
The obligations to adhere to an abbreviated procedure, the optional report of the Labour Inspectorate and the priority of the trade unions over the ad hoc committee continue until 30 June 2020.
Processing of ETOP ERTES during the validity of force majeure ERTES.
The effects of the ERTES due to ETOP causes that arise after the termination of an ERTE due to force majeure shall be retroactive to the date of termination of the latter.
The ERTES for ETOP causes in force at the date of entry into force of this Royal Decree-Law remain in force until the date foreseen in the company’s final communication.
This extension of the ERTES until 30 June could be extended beyond this date depending on the restrictions on activity linked to health reasons that remain after 30 June.
ERTE workers will receive unemployment benefits until 30 June
Workers affected by an ERTE will continue to receive unemployment benefits until 30 June. However, permanent – discontinuous workers will be able to continue receiving this benefit until 31 December 2020.
Requirements for companies and professionals to continue to benefit from ERTES
Companies with tax domicile in tax havens will not be eligible for these measures.
They will not be able to distribute dividends during the tax year coinciding with the year in which the ERTES are applied, unless they return the part corresponding to the exemption applied to Social Security contributions or they are companies which, on 29 February 2020, had fewer than 50 workers registered with the Social Security. There is one exception to this rule: large companies on the stock exchange will be able to pay dividends, as the rule affects the companies that make the application; parent companies have a free hand if the regulation applies to subsidiaries.
Companies and employers that have applied an ERTE to their workforce will not be able to make redundancies in 2020.
The ban on redundancies justified by the crisis caused by the spread of the Coronavirus (COVID-19) was introduced by Royal Decree-Law 9/2020, of 27 March, which adopts complementary measures, in the labour field, to alleviate the effects of COVID-19.
This ban, with the agreement signed by the Government and the CEOE, is limited to 30 June 2020. Thus, companies or self-employed workers will not be able to dismiss their workers for force majeure or objective causes until 30 June 2020.
Other measures to maintain employment
Companies or professionals that have implemented an ERTE due to force majeure must maintain the level of employment for six months from the date of resumption of activity or reincorporation to effective work of persons affected by the ERTE, even if it is partial or only affects part of the workforce, only affecting persons who have been included in that ERTE.
It will not be considered that the maintenance of employment is not being breached when there are terminations due to disciplinary dismissal declared as fair, resignation, death, retirement or total, absolute or major permanent disability of the worker, or due to the call-up of persons with a permanent – discontinuous contract when this does not involve dismissal but an interruption of the same. In the case of temporary contracts, termination due to the expiry of the agreed time or the completion of the work or service that constitutes the object of the contract or when the activity that is the object of the contract cannot be carried out immediately shall not be considered a failure to maintain employment.
Companies in which there is a risk of bankruptcy will not be required to maintain employment.
Companies and self-employed workers who do not comply with the commitment to maintain employment will have to reimburse the full amount of the contributions they were exempted from paying, with the corresponding surcharge and interest for late payment, as well as any possible infringements arising from the Law on Infringements and Penalties in the Social Order.
On the other hand, the interruption of the calculation of the duration of temporary contracts for ERTES due to force majeure and ETOP linked to the Coronavirus is extended until 30 June 2020.
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