From the Royal Decree Law published in the State Gazette on the 13th of May 2020.
The special ‘force majeur’ COVID ERTEs, where employers are exempt (if less than 50 employees) of paying social security contributions when they arrange for a total or partial suspension of their employees’ work activities, temporarily, can be extended to last until the 30th of June 2020, in certain circumstances.
Case 1, where businesses cannot resume their activities due to the containment measures.
The ERTEs in place will be valid for as long as the impossibility to resume their activities exists, but at the most until the 30th of June 2020. Employers remain entitled to the 100% exemption of paying Social Security contributions (less than 50 employees, 75% exemption when they have 50 or more). Employees are entitled to unemployment benefits, irrespective of their work history, but need to have been employed before or on the 17th of March 2020.
Case 2, where businesses can resume part of their activities, as a result of the flexibilisation measures, denominated as ‘partial force majeur COVID ERTEs’
The ERTEs in place will remain valid, but need to be adjusted, giving preference to reducing the workday for all employees, over allowing some to return to work and others not. The special ‘force majeure’ conditions remain valid till the 30th of June. Affected companies need to inform the labour authorities within 15 days after resuming their activities. And inform SEPE about a necessary adjustment to the original ERTE regulation, with regards to partial or complete removal from employees from the regulation, so that their unemployment benefits can be adjusted accordingly.
Re the exemption of paying Social Security contributions, see Case 1, for both the employees that have resumed their activities, as those remaining on the ERTE.
Case 3, where businesses can re-open as a result of the flexibilisation measures, but find it impossible to call back all employees previously on COVID ERTE, for economic, technical, organizational or production reasons.
They can apply for a regular ERTE regulation, but with special conditions in place until the 30th of June. The ERTEs can have a later end date, at the discretion of the company. If their employees already are included in a COVID ERTE, they can apply while this is still valid, and the new one won’t become effective until the first one has finalised (i.e. the date when the flexibilisation measures allowed them to re-open).
Employees on those ERTEs will be entitled to unemployment benefits, irrespective of their work history. They need to have been employed before or on the 17th of March 2020. The special unemployment protection measures for employees on ‘fijo-discontinuo’ contracts remain in force till the 31st of December 2020. For more info, read THIS ARTICLE.
Employers will receive discounts on the social security contributions for their employees. Different (higher) ones for employees that resume their work activities and for those that remain in ERTE (lower).
Please consult your gestor or asesor for details.
The Government further announced that there will be a three-party committee (Ministry, Employers’ Organisations and Workers’ Unions) that will meet at least every month, to discuss the necessity to adjust measures. And they will advise the ‘Consejo de Ministros’ about the necessity to extend the measures mentioned above till after the 30th of June, in case the health situation at that time so requires.
Safeguarding employment (this article has been amended by this latest Royal Decree)
1. Employers who applied for the special COVID ERTE will be subject to the commitment of the company to
maintain employment for six months from the date of resumption of the activity, understanding by such the reincorporation to the effective work of people affected by the file, even if it is partial or only affects part of the workforce.
2. This commitment will be considered breached if they dismiss or terminate the contracts of any of the persons affected by the ERTE.
This commitment will not be considered breached when the employment contract is extinguished by disciplinary dismissal declared as appropriate, when the employee resigns, dies or retires or is affected by permanent disability or great disability, nor by the end of the call of the people with ‘fijo discontinuo’ contracts, when this does not suppose a dismissal but an interruption of the same.
In particular, in the case of temporary contracts, the maintenance commitment of employment will not be considered breached when the contract is terminated by expiration of the agreed time or the performance of the work or service that constitutes its object or when the contracted activity cannot be carried out immediately.
3. This commitment to maintaining employment will be valued based on the specific characteristics of the different sectors and labour regulations applicable, taking into account, in particular, the specificities of those
companies that present a high variability or seasonality of employment.
4. The commitment to maintain employment is not valid for those companies in which there is a risk of bankruptcy in the terms of article 5.2 of Law 22/2003, of July 9, Bankruptcy.
5. Companies that do not comply with this commitment must reinstate the full amount of the social security contributions from whose payment they were exonerated, with the surcharge and the corresponding default interest, previous actions to that effect of the Labour and Social Security Inspection that accredits non-compliance and
determine the amounts to be repaid.
The Royal Decree includes clauses that determine that no company that has its fiscal domicile in a tax haven will be able to benefit from the extension of the ERTE due to force majeure. In addition, it vetoes the possibility that companies that have enjoyed social exemptions may distribute dividends during the fiscal year corresponding to the application of the ERTE, unless they return the part corresponding to the bonus received.
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