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Nota Informativa

Complete guide with the most important Labor and Social Security Reforms approved in Spain on the occasion of the COVID-19

Author: Goretti Mora and Isabel Bofarull

[Warning: this report is only for information purposes and does not constitute a legal opinion]

EMPLOYMENT-RELATED MEASURES

Due to the paralysis of many companies, both large and small, the Council of Ministers adopted measures to try to achieve greater flexibility in the temporary adjustments of the workforce. It also reflected the possibility of a Temporary Employment Regulation (ERTEs) file to try to mitigate and avoid redundancies, this being the most striking measure in the labour field

1.What do I do if my business has had to close due to the COVID-19 crisis and my employees cannot telework?

The Workers’ Statute (henceforth, the ET) provides a solution for companies affected by the decline in their services, currently, due to the COVID-19 pandemic. Article 45 i) of this regulation provides for the suspension of the contract (ERTE), whose regulation has been made more flexible by Royal Decree Law 8/2020 of 17 March, on extraordinary urgent measures to deal with the economic and social impact of the COVID-19.

2. Can I terminate contracts or dismiss workers because of COVID-19?

Royal Decree Law 9/2020, of 27 March, which adopts complementary measures in the field of employment to mitigate the effects of the COVID-19, expressly prohibits them by not considering force majeure and the economic, technical, organizational and production causes caused by the COVID-19 as justifying.

This means that dismissals can be made but companies will subsequently be obliged to pay the worker the maximum compensation for unfair dismissal (33 days of salary per year worked, instead of the 20 days per year worked of the dismissal for objective reasons).

The recommended measure for companies is to carry out an ERTE (temporary employment regulation measures) with the consequent suspension of the contract or reduction of working hours according to the needs of the company, as explained below.

3. What does the suspension or reduction of the working day in an ERTE mean?

The suspension of the contract implies the interruption of the obligation to work, as well as the interruption of the right to remuneration during the time the ERTE lasts (art. 45.2 ET).

The reduction of the working day implies the reduction of the working hours, as well as the proportional reduction of the salary, according to the needs of the company and during the time the ERTE lasts.

4. So my employees won’t be paid or will be paid less?

In the event of suspension of the contract, employees will be entitled to receive unemployment benefit (Article 262 of the General Law on Social Security) consisting of 70 percent of its regulatory base during the first 180 days and 50 percent as of the 180th day.

In the event of a reduction in the working day, they will receive the proportional part in which they have been reduced in salary.

5). Can I apply an ERTE in any case? Are there types of ERTE?

If your company has been affected in any way by the COVID-19, you can apply an ERTE.

However, depending on the degree of affectation, there are two types of ERTE:

– If your company has been directly affected by COVID-19, you must apply an ERTE due to force majeure. The ERTE is approved by the labour authority.

– If the company has been affected indirectly, you must apply an ERTE for economic, technical, organizational and/or production reasons. The ERTE is approved by the employer and it is preferable that it be agreed with the workers.

6). What are the specialities regulated for ERTEs due to force majeure, with respect to the procedure set out in the regulations governing these cases?

Royal Decree-Law 8/2020 stipulates that the company’s application to initiate the procedure must include a report and documentation accrediting the direct relationship between the loss of activity and the COVID-19, and that it must notify its workers of the initiation of the procedure.

The labor authority will determine by resolution within 5 days from the request, the existence of force majeure motivating the suspension of contracts or the reduction of the workday that will take effect from the date of the event causing the force majeure, after a report, if appropriate, from the Labor and Social Security Inspectorate whose request will be optional for the labor authority, will be evacuated within a non-renewable period of five days

7). What are the specialities regulated for ERTE’s for economic, technical, organisational and production reasons, with respect to the procedure set out in the regulations governing these cases?

In these cases, where the company decides to suspend the contract or reduce the working day for economic, technical, organisational and production reasons related to the COVID-19, a series of procedures must be followed with the workers.

When there is no legal representation of the workers, the committee representing them for the negotiation of the consultation period, which must be set up within a non-renewable period of 5 days, will be made up of the most representative trade unions in the sector to which the company belongs or by three workers from the company itself, chosen in accordance with the provisions of Article 41.4 of the Workers’ Statute if such representation is not set up.

The period of consultation between the company and the workers’ representatives or the representative committee must not exceed a maximum of seven days.

8). Do I have to pay social security contributions for my workers during this period?

In the case of ERTE due to force majeure, the employer is exonerated from the employer’s social security contributions. However, the case of force majeure must always have been accredited and approved by the labour authority.

In ERTEs for economic, technical, organizational and production reasons, there is no exemption and the employer must continue to pay the full social security contributions.

9). What happens when my company resumes activity if I have taken out an ERTE?

All those companies that have availed themselves of any of the extraordinary measures provided for in Royal Decree-Law 8/2020 in the field of employment are obliged to maintain employment for a minimum period of 6 months from the time the activity is resumed.

10). What happens if the suspension by the ERTE affects temporary contracts?

The suspension of temporary contracts (including training, relief and temporary contracts) will mean the interruption of the calculation, the duration of these contracts and the reference periods equivalent to the suspended period, in each of these contractual modalities of the workers affected by them.

11).Am I obliged to apply teleworking in my company?

Royal Decree Law 8/2020, of 17 March, on urgent extraordinary measures to deal with the economic and social impact of COVID-19 establishes the preferential nature of distance working, and the company must adopt the appropriate measures whenever it is technically and reasonably possible and if the necessary adaptation effort is proportionate. Similarly, it is established that distance working, as well as the adoption of other organisational system measures that allow activity to be maintained by alternative mechanisms, must take priority over temporary cessation or reduction of activity..

12). What are the exceptional measures regarding flexibility and reduction of the working day?

Article 6 of Royal Decree Law 9/2020, of 27 March, which adopts complementary measures in the field of employment to mitigate the effects of the COVID-19, establishes a series of measures for the reconciliation of family and working life called the “MECUIDA Plan”, which can be applied to workers who can prove that they have a duty of care to their spouse or partner, or to family members up to the second degree of consanguinity of the worker.

12. 1. In what cases can workers take advantage of the “MECUIDA” plan?

In those cases in which they can prove that their spouse or partner, or family members up to the second degree of consanguinity:

  • Requires personal and direct care due to illness, disability or age as a direct consequence of COVID 19.
  • Has been affected by the closure of educational centres or of any other nature that provides care or attention.
  • When the person who until now was in charge of that care or direct assistance cannot continue to do so due to causes related to the COVID-19.

12. 2. What are the measures included in the “MECUIDA” plan?

The mesures contemplated are two:

a) Adaptation of working hours: the right to the distribution of working hours or any other aspect of working conditions whose modification makes it easier for the worker to provide the necessary care, provided that the change can be made in a proportionate and reasonable manner taking into account the exceptional and temporary nature of the COVID

b) Reduction of the working day: for those situations foreseen for legal custody ( art. 37.6 and 7 ET) the right to a special reduction of the working day, with a proportional reduction of the salary when the exceptional circumstances mentioned above occur, as long as it is communicated to the company 24 hours in advance. The reduction of the working day may be 100% but must be justified and reasonable and proportionate, also taking into account the situation of the company. In the case of caring for a family member, it is not necessary for the latter not to carry out a paid activity.

12. 3. And what happens in cases where the worker was already enjoying an adaptation/reduction of the working day through conciliation?

In these cases, the worker must either temporarily renounce it or exercise his or her right to have the terms under which they were enjoyed changed, exclusively for an exceptional period of time during the health crisis, proving the specific care needs to be provided by the worker and having to be adjusted to the organisational needs of the company.  

SOCIAL SECURITY

1). Can I request a deferral for the payment of social security debts?

Royal Decree Law 11/2020 of 31 March, which adopts additional urgent measures in the social and economic field to deal with COVID-19, stipulates that all companies and self-employed workers who have been affected by COVID-19 and who do not have any other previous deferral in force can request a deferral of their Social Security debts at a reduced interest rate of 0.5%. which they would have to pay between April and June, provided that they request it before the first ten calendar days of each of the regulatory periods of entry, in order to avoid invoicing of the contribution.

2). What does the moratorium on social security contributions consist of?

Royal Decree-Law 11/202 has empowered the General Treasury of Social Security to grant companies and self-employed workers a moratorium without interest or surcharges on contributions to be made in May, June and July for up to six months.

3). Which companies can benefit from the moratorium on social security contributions?

This moratorium cannot be requested by those companies that have been exonerated from paying social security contributions by their workers affected by ERTEs due to force majeure because of the coronavirus.

Furthermore, this moratorium is only applicable to companies and self-employed workers whose economic activity is included in the following codes of the National Classification of Economic Activities (CNAE-2009):

119 (Other non-perennial crops).

129 (Other perennial crops)..

1812 (Other printing and graphic arts activities).

2512 (Manufacture of metalwork).

4322 (Plumbing, heating and air conditioning installations).

4332 (Installation of carpentry).

4711 (Retail trade in non-specialised stores, predominantly in food, beverages and tobacco products)

4719 (Other retail sale in non-specialised stores)

4724 (Retail sale of bread, bakery and confectionery products in specialised stores)

7311 (Advertising agencies)

8623 (Dental activities)

9602 (Hairdressing and other beauty treatment).

4). What does the assimilation of periods of isolation, contagion or restriction in the exits of the workers from the municipality of residence consist of to the “work accident” as a consequence of the COVID-19?

Royal Decree Law 6/2020, of 10 March, which adopts certain urgent measures in the economic field and for the protection of public health, establishes the aforementioned assimilation as an exception and only as regards the economic benefit of temporary incapacity for those cases of total confinement, in periods of isolation or infection of workers caused by COVID-19 and in those cases where workers who are obliged to provide essential services in a location other than their home cannot do so because the population where they live has been expressly confined by the competent authority, cannot work telematically and is not entitled to receive any other public benefits. The effects will be from the beginning of the confinement situation, and by means of the corresponding discharge.

5). What is the extraordinary benefit for cessation of activity for those affected by the declaration of the state of alarm for the management of the health crisis situation caused by the COVID-19?

Royal Decree-Law 8/2020 of 17 March on urgent extraordinary measures to deal with the economic and social impact of the COVID-19 establishes that self-employed workers who are affected by the COVID-19 will be entitled to an extraordinary benefit for cessation of activity or reduction in turnover. This benefit is of an exceptional nature and the deadline for applying for it has been extended to the last day of the month following the end of the state of alarm by Royal Decree Law 11/2020 of 31 March.

5.1 Who can apply for the benefit?

  • Self-employed workers included in the Special Scheme for Self-Employed Workers, self-employed agricultural workers included in the Special System for Agricultural Self-Employed Workers and self-employed workers included in the Special Scheme for Seafarers whose activities are suspended or who have not ceased, its turnover in the calendar month preceding the month in which the service is requested is reduced by at least 75 per cent compared with the average turnover in the previous calendar half-year or when its average turnover in the months of the production campaign preceding the month in which the service is requested is reduced by at least 75 per cent compared with the same months in the previous year’s campaign
  • Self-employed workers who carry out activities in activities specified as information and communications activities or artistic, recreational and entertainment activities, provided that their activity does not cease but whose turnover in the calendar month prior to that in which the benefit is requested is reduced by at least 75% in relation to that carried out in the previous 12 months.

5.2 What requirements must be met?

  • To be affiliated and registered on the date of declaration of the alarm status
  • Be up to date with the payment of Social Security contributions.

5.3 What is the amount of the benefit?

  • It is determined by applying 70% to the regulatory base, but, when there is no minimum contribution period, it will be equivalent to 70% of the minimum contribution base in the Special Social Security Regime corresponding to them by activity.