Labour measures to address the economic and social impact of the COVID-19

Bosco de Gispert SeguraLawyer, Grupo Gispert

Spanish Royal Decree-Law 8/2020, of 17 March, on urgent extraordinary measures to face with the economic and social impact of COVID-19.

The following is a summary of the Royal Decree-Law (hereinafter RDL) that regulates labour matters, and specifically, the measures to make the mechanisms for temporary adjustment of activity more flexible in order to avoid dismissals (articles 22 to 28), which are necessary to be able to face the current situation caused by the impact of the COVID-19:

Exceptional measures in relation to the procedures for suspending contracts and reducing working hours due to force majeure.

Requirements

  • Direct cause in activity losses as a consequence of COVID-19, including the declaration of the alarm state, which they imply:

-Suspension or cancellation of activities

-Temporary closure of public premises

-Restrictions on public transport and in general on the mobility of persons and/or goods

-Lack of supplies that severely prevent the continuation of the ordinary development of the activity

– Urgent and extraordinary situations due to infection of the staff or the adoption of preventive measures decreed by the health authority that are duly accredited

Groups affected by the state of alert:

  • Educational or training activities in public or private centres.
  • Premises and retail establishments with the exception of:

– Food, beverages and basic necessities

– Pharmaceutical, medical, optical, orthopedic, hygienic, press and stationery establishments.

– Automotive fuel

– Tobacco shops

– Technological and telecommunications equipment shops

– Pet food stores – Internet, telephone or mail order trade.

– Dry cleaners and laundries

  • Museums, archives, libraries
  • Premises and establishments where public performances take place
  • Hotels and restaurants (except home delivery services)
  • Sports and leisure activities
  • Any other activity which, in the opinion of the competent authority, may pose a risk of contagion

The Temporary Regulation of Employment File (hereinafter ERTE) procedure by force majeure:

  • File the proceeding: application by the company
  • Report on the connection of the loss of activity as a consequence of COVID19
  • Proof of the situation
  • Communication to employees
  • Transfer of the report and supporting documentation to the Workers’ Legal Representation (hereinafter RLT), in the event that previously existed in the Company

Resolution:

  • Confirmation by the Labor Authority after an optional report from the Labor and Social Security Administration regarding the causes, which will be answered within five (5) days from the date of request.

Effects:

  • From the date of the event causing the force majeure.
  • The company must transfer the resolution to the RLTs and the Labor Authority.

Contribution to Social Security by the company:

  • If the Company has less than 50 employees on February 29, it will have a 100% exemption from the employer’s fee.
  • If the company has more than 50 employees on February 29th, the exemption is 75% of the employer’s contribution.
  • The company must apply for an exemption of social security contributions, identifying the employees and the period of suspension or reduction of working hours. The control will be made by the State Employment Service (SEPE) which will be responsible for the recognition of the corresponding unemployment benefit.

Social Security Contributions by Employees:

  • It is maintained as a period effectively contributed to all the effects.

Unemployment Benefit:

  • Recognition of unemployment benefits, even if they do not meet the minimum period of employment normally required
  • It does not compute for the effects of consuming the limit period of unemployment benefit
  • The duration of the service will be extended until the end of the period of suspension of the employment contract or temporary reduction of the working day.

Exceptional measures in relation to the procedures for suspension and reduction of working hours on economic, technical, organizational and production grounds.

Requirements:

  • Caused by COVID19

Procedure:

  • Consultation period: maximum of seven (7) days
  • Establishment of a Negotiating Committee within a non-extendable period of five (5) days
  • In the case of not having an RLT:

-One (1) person from each of the most representative labor unions in the sector to which the Company belongs and with the right to be part of the collective bargaining committee

–If the above is not acceptable: Form an “Ad hoc” committee: 3 employees of the company, elected in accordance with Article 41.4 of the Spanish Employees’ Statute

  • Necessary documentation:It will be initiated by a request from the company addressed to the competent labor authority, accompanied by

-The means of evidence deemed necessary to prove the cause of force majeure.

-A copy of the communication of the presentation of the application to the RLTs and a proposed agenda of meetings

-Payroll data of the affected workers and their tax identification number.

-Documentation accrediting the legitimacy of the person submitting the application.

Contribution to Social Security by the company:

  • There is no exemption from contribution in this procedure as in the case of Force Majeure

Duration of the measures:

  • The measures contained in the RDL will remain in force as long as the extraordinary situation resulting from COVID-19 is maintained.

IMPORTANT: Employment safeguard.

The measures foreseen in the RDL analysed will be subject to the Company’s commitment to maintain employment for a period of six months from the date of restarting the activity.