In this post we will talk about the CONCEPT AND CURRENT SITUATION ON ERTES a topic that for many may be unknown and for others uncertainty, the following article will explain in detail everything about this topic.
- What is an ERTE?
- Types of ERTES
- Types of COVID-derived ERTES
What is an ERTE?
A Expediente de Regulación Temporal de Empleo (ERTE) is a measure provided for in the Workers’ Statute (art. 47) which can be used by those companies that meet the legal requirements to do so and want to temporarily reduce the working day or suspend employment contracts of all or part of its workforce in order to safeguard the viability of the company.
The ERTES are eminently temporary and therefore imply the mandatory reincorporation of the employee to his/her job in the same conditions he/she had prior to the application of the ERTE, once it ends.
In Spanish legislation, a Expediente de Regulación Temporal de Empleo, abbreviated and also popularly known as ERTE, is a procedure by which a company in an exceptional situation seeks authorization to lay off workers, suspend employment contracts or reduce working hours on a temporary basis, when they are experiencing technical or organizational difficulties that jeopardize the continuity of the company.Wikipedia
Types of ERTES.
Historically, there were two types of dismissals, on the one hand, those based on economic, technical, organizational or production causes (ERTES ETOP), and secondly, those of force majeure (FM), classically applied in the case of unforeseen events such as catastrophes, fires, inclemencies, landslides, or similar situations that prevented the provision of work for a certain period of time.
The ERTE of economic type, is processed with a necessary negotiation with the workers through their representatives, ending with or without agreement. But there is an essential consultation period. They do not have retroactive effectiveness, but the effectiveness is subsequent, but the measures can be agreed for a longer time horizon, for example, one year, two years.
The ERTE of force majeure does not require a consultation period with the workers but an express authorization of the labor authority (either the employment departments of the Autonomous Communities) and in another case the Directorate General of Employment. It should be added that these proceedings are effective retroactively to the moment in which the situation of force majeure occurred, and it makes perfect sense, for example, if there has been a fire, the effects are retroactive to the moment in which the work performance was prevented. And logically the first measure is to put out the fire or to take the appropriate measures and then the ERTE is processed with effect from the first day of the catastrophe.
These proceedings exempt the company from paying wages, as the public employment service pays unemployment benefits to the affected workers, and in the case of force majeure, a partial exemption from social security contributions.
Situation of ERTES as of 03-14-2020.
Since March 2020 with the appearance of the coronavirus pandemic in our country, the legislator on the basis of the classic ERTES regulations has been forced to deepen the definition and concept of force majeure ERTES, in the face of a pandemic not seen before in the last century and with a duration that will soon be a year old.
As is well known, in view of the slowdown caused by the declaration of the state of alarm on 14-03-2020, thousands of companies were forced to request force majeure.
Types of ERTES derived from COVID.
Since the massive presentation of ERTES between the months of March and April 2020, as the pandemic situation evolved, the subsequent de-escalation during the summer, the outbreaks, etc., the government, with the ultimate aim of avoiding massive layoffs, has been adapting and shaping the ERTES regulations, even creating new ones. The government, with the ultimate aim of avoiding massive layoffs, has been adapting and shaping the ERTES regulations, even creating new ones.
According to RDL 8/2020, the ERTEs of force majeure were created due to the declaration of the state of alarm.
ERTEs of regrowth.
It was created by RDL 24/2020, the ERTEs de rebrote, created to cover the companies that were prevented from developing their activity due to the resurgence and the measures agreed by the different administrative authorities after the lifting of the State of Alarm, coinciding with the de-escalation.
By RDL 30/2020, ERTES are created to cover companies that will have partial exemptions in social security contributions after October 1st, 2020.
ERTEs due to activity impairment.
For companies and entities of any sector or activity that are prevented from carrying out their activities in any of their workplaces as a result of new restrictions or sanitary containment measures adopted by Spanish or foreign authorities as of October 1st, 2020.
ERTEs due to activity limitations.
For those companies and entities of any sector or activity that see limited the normal development of their activity in any of their work centers, as a consequence of restrictions or sanitary containment measures adopted by the Spanish authorities, such as, for example, the limitation of capacity, opening hours, etc.
ERTEs affecting companies with certain CNAEs and with ERTES extended from March 2020, or companies that indirectly depend on them, called ERTES of companies dependent on or integrated in the value chain of the sectors most affected by the crisis, such as tourism and hotel chains.
All these ERTES, when approved by the labor authority, are associated with partial exemptions from social security contributions, depending also on the number of employees of the company. The exonerations are greater the smaller the size of the company. These ERTES are a very important saving during these times for the companies, which can save them from a definitive closing.
Another important aspect is that the employment safeguard clause (prohibition of dismissal for 6 months) is still in force, and the computation starts from zero, if they have agreed to one of these ERTES.
All of the above-mentioned force majeure ERTES have been extended from quarter to quarter.
Last January 27, 2021 was published in the BOE Real Decreto-ley 2/2021, of January 26, on the reinforcement and consolidation of social measures in defense of employment, includes, in its Title I, the IV Social Agreement in Defense of Employment, issued in view of the persistence of the negative effects on companies and employment of the health emergency situation caused by the COVID – 19 requires maintaining the exceptional measures provided for in the Real Decreto-ley 8/2020, of March 17 on extraordinary urgent measures to address the economic and social impact of COVID-19, in its articles 22 and 23, relating to suspensions and reductions in working hours due to force majeure and economic, technical, organizational and production causes linked to COVID-19, as well as the extraordinary measures linked to the same in terms of unemployment protection.
Article 1 extends the ERTEs based on a force majeure cause related to COVID-19, regulated in Article 22 of Royal Decree-Law 8/2020, of March 17, until May 31, 2021..
Likewise, the temporary labor force adjustment plans for impediment in the development of the activity authorized on the basis of the provisions of paragraph 2 of the first additional provision of Royal Decree-Law 24/2020, of June 26, on social measures for the reactivation of employment and protection of self-employment and competitiveness of the industrial sector, are deemed to have been extended.
The temporary labor force adjustment plans for limitation to the normal development of the activity in force, based on Article 2.2 of Royal Decree-Law 30/2020, of September 29, 2020, will be automatically extended until May 31st, 2021.
Furthermore, Article 2, recognizes the possibility of presenting new ERTE due to limitations or impediments, in identical terms to those established by Article 2 of Royal Decree-Law 30/2020, of September 29, and in accordance with the causes described therein, and provides, as a novelty, that once a company has obtained a favorable resolution in an ERTE of force majeure due to impediment to the activity, it will be able, without the need to process another new file, to apply the measures corresponding to its new situation of limitations to the development of the activity, as long as it communicates the change by means of a responsible declaration.
The companies that take advantage of these ERTEs must submit to a commitment to maintain employment.
With this regulation, it is also important to point out that the extraordinary measures for the protection of workers are extended, maintaining in force the unemployment protection measures provided for in Article 8 of Royal Decree-Law 30/2020, of September 29th, with the preservation of the 70% rate applicable to the regulatory base for the calculation of the benefit once the 180 days of benefit have elapsed in the case of ERTE benefits, the preservation of the meter at zero under the terms set forth in paragraph 7 of said provision, as well as the measures for the protection of persons with discontinuous fixed-term contracts provided for in Royal Decree-Law 8/2020, of March 17th.
The exemptions from social security contributions are as follows:
From February 1 through May 31, 2021, companies under ERTE will be eligible for the following exemptions:
Exonerations for ultra-protected sectors
Certain CNAE indicated by the Government and their value chain may apply exemptions according to their workforce:
Companies with less than 50 workers: 85%.
Companies in ERTE with more than 50 workers: 75%.
These exonerations would apply to workers suspended between February 1 and May 31, as well as to those who have resumed their position as of February 1 or have resumed their position after RD Law 18/2020.
Exonerations for impairment ERTES.
Companies that are prevented from operating in any work center due to restrictions may be exempt from social security payments during the closure period and until May 31, 2021 at the following percentages, depending on the number of employees:
- Companies with less than 50 employees: 100% exemption.
- Companies with more than 50 employees: 90% exemption.
These percentages will also be applicable for ERTES for regrowth, which were requested according to RD Law 24/2020.
Exonerations for limiting ERTES.
If a company needs to request an ERTE because its activity in a work center is limited due to the measures adopted by the authorities, it will be able to exempt social security payments until May 31. Its application will be decreasing and the percentage will be reduced each month:
Companies with more than 50 workers:.
- Exoneration for February: 100%.
- Exoneration for March: 90%.
- Exoneration for April: 85%.
- Exoneration for May: 80%.
Companies with more than 50 workers:.
- Exoneration for February: 90%.
- Exoneration for March: 80%.
- Exoneration for April: 75%.
- Exoneration for May: 70%.
We are at a point where the negotiation for these extensions is becoming more and more tedious because the pandemic crisis does not end, not even with the beginning of the vaccination, but on the contrary, we are now in a third wave of terrible contagions, which makes necessary and essential the extension of all the dossiers and aid, and finally the extension, as it is known, has come to fruition. At the risk that a great part of the companies will disappear definitively.
The next date to watch out for is May 31, 2021, where we will see if the government decides to extend this ERTES system or not, depending on the situation we are in, a scenario that is very difficult to predict at this time.
At LAWYOU we have lawyers with many years of experience who can help you or give you more information about the currently applicable legislation and future changes. Do not hesitate to contact us to tell us about your case through our email firstname.lastname@example.org or, if you prefer, you can also call us at the following telephone number: 602 226 895. Or you can leave us your details here.If you want information about an ERTE for your company both as an employer and as an employee, please fill in the following form.