Extension of the ERTEs COVID-19

Conten Table

Extension of the ERTEs COVID-19

RDL 30/2020 ERTE to January, but beware

Today, 30 September, Royal Decree-Law 30/2020, of 29 September, on social measures in defence of employment (RDL 30/2020), among others, is published. The main issue of which is the extension of the employment regulation procedures (ERTE) initiated due to COVID-19.

“The current ERTEs, based on article 22 of Royal Decree-Law 8/2020 of 17 March, will be automatically extended until 31 January 2021”.

The extension of the ERTE COVID-19 itself occupies 3 lines of the 43 pages that make up the new regulation. So we will now try to elucidate the “mines” hidden in the rest of the text.

A very relevant change of criterion in the new rule is that the category of the ERTE is no longer determined by the situation that causes it (ie: supply chain breakage) but whether or not it is attributable to the authorities. In other words, the new ERTEs, as we shall see, are categorised according to the nature of the measures and/or restrictions that cause them, i.e. the State separates those ERTEs caused by the restrictions imposed.

RDL 30/2020 includes other issues that we will comment on in later notes. We give priority to ERTE and unemployment due to the deadlines involved.

Types of ERTE

In the six months since the publication of Royal Decree-Law 8/2020, of 17 March, on extraordinary urgent measures to address the economic and social impact of COVID-19 (RDL 8/2020), the temporary redundancy plans (ERTE) have undergone changes that have turned the acronym into a gibberish whose understanding is essential.

Our legislation contemplates two main types of ERTE:

  • Of Force Majeure, article 47.3 of the Workers’ Statute (ET).
  • It is based on economic, technical, organisational and production causes.

With RDL 8/2020, two mutations were generated that gave rise to:

  • Force Majeure (those of 22, 8/2020) previously extended until 30 September 2020 by Royal Decree-Law 24/2020, of 26 June, on social measures to reactivate employment and protect self-employment and the competitiveness of the industrial sector (RDL 24/2020, which we commented on at the time) and now extended until 31 January 2021.
  • Based on economic, technical, organisational and production causes (those of 23, 8/2020) in force until the date indicated by the company in the file itself (art. 3.4).

There is a third group, those in section two of the first additional provision of RDL 24/2020, with no special regulation but different bonuses. These will now be subsumed (sole dt.) under “those of 2.1”, which we will explain shortly.

New appellatives are introduced today:

The ERTE of Force Majeure due to impediment or limitations of activity separated into two groups according to the origin of the impediment to the development of the activity, regulated according to the ET:

  • Due to new restrictions or health containment measures adopted, as of 1 October 2020, by Spanish or foreign authorities (those in 2.1).
  • by (other) restrictions or health containment measures adopted by the Spanish authorities (those of 2.2).

We also have those ERTEs of Force Majeure COVID19 (those of 22) that transition to an organisational ERTE (those of 23) as of today, until 31 January 2021 and while the current ERTE is still in force. We will call them “those on 3” in honour of the article that describes them. Those to whom the specificities of article 23 of RDL 8/2020 apply.

In short, in this regulation dealing with the extension of the ERTE COVID-19 we are left with:

  • The original force majeure ERTE regulated in 47.3 ET, those of 22, 2.1 and 2.2.
  • The original organisational ERTEs regulated in the ET, those of 23 and 3.

Within “those of 23” will be those that were processed directly in this way, those that transited before today from force majeure (those of 22) and those that are transiting now (those of 3).

Contribution subsidies

Today’s regulation includes three contribution rebates, applicable from 1 October 2020. We comment on the first two now and the third, regulated in the first additional provision, will be discussed later in this text.

The ERTE “of 2.1” (force majeure due to impediment caused by new restrictions and/or measures) may be subsidised (art. 2.1):

  • 100% of the company’s contribution during the period of closure and until 31 January 2021. 90% if there are fifty or more workers.

Other force majeure ERTEs arising from the limitation of the normal development of its activity as a result of decisions or measures adopted by the Spanish authorities may be eligible for a rebate (art. 2.2):

  • In respect of the contribution accrued in the months of October, November, December (of 2020) and January 2021: 100, 90, 85 and 80 per cent respectively. Companies with 50 or more employees will have 10 percentage points less bonus.

Be very careful! We are talking about the fact that the cause of the ERTE are limitations caused by decisions or measures taken by authorities, examples:

  • I can’t sell because I can’t get the material from China: not applicable.
  • I can’t do concerts because the government closed theatres: applies.

These bonuses will apply to the company contribution and the joint collection fees. Nor will they have any effect on the worker (art. 2.5).

What happens with extended Force Majeure ERTEs (those of the 22nd)? If the original cause is a measure adopted by the health authorities, then they would fall into the second group of bonuses. If the cause is something else (supply problems, etc.), it does not fit.

Organisational ERTEs are not eligible for bonuses.

Obligation to maintain employment

Since the publication of RDL 8/2020, the contribution rebates, which are optional at the discretion of the company, have been accompanied by a commitment to maintain employment for a changing period.

It should be recalled that companies that had benefited from the rebates of the previous RDLs were already obliged to maintain employment for six months from (RDL 8/2020 da. 6 and RDL 24/2020 art. 6):

  • The date of partial or total resumption of the activity if they had opted for the rebates before 26 June 2020 (before RDL 24/2020)
  • from 26 June 2020 for those who opted for bonuses after that date.

The only practical exception to this commitment was, and still is, the concurrence of a risk of insolvency under the terms of Article 5.2 of the (now repealed) Insolvency Act 22/2003 of 9 July 2003 (see Royal Legislative Decree 1/2020 of 5 May, approving the revised text of the Insolvency Act).

Those benefiting from the new rebates will acquire a new commitment of 6 months, starting from (art. 5):

  • the end of the previous commitment (if any)
  • the date of resumption, partial or total, of the activity (if there was no previous commitment, since article 6 of RDL 8/2020 applies).

Layoffs, overtime and outsourcing

Royal Decree-Law 9/2020, of 27 March, adopting complementary measures, in the labour sphere, to alleviate the effects derived from COVID-19 (RDL 9/2020) decreed that the causes that may cover an ERTE (those of 22 and 23) may not be understood as justifying the termination of the employment contract or dismissal (RDL 9/2020 art. 2).

This consideration is now extended until 31 January 2021 (art. 6).

It is also decreed again (art. 7) the prohibition to work overtime or to establish new outsourcing.

Temporary contracts

The suspension of temporary contracts, including training, relief and interim contracts due to ERTE COVID-19 will mean the interruption of the calculation, both of the duration of these contracts and of the reference periods equivalent to the suspended period, in each of these contractual modalities, with respect to the workers affected by them (RDL 9/2020, art. 5).

And this will be the case, for the time being, until 31 January 2021 (art. 6).

Regarding unemployment

RDL 8/2020 decreed the recognition of the right to contributory unemployment benefit even if the minimum period of contributory employment required for this purpose is lacking.

This measure is extended (art. 8) until 31 January 2021 for those affected by ERTE of the extended types:

  • Of Force Majeure COVID-19 extended (those of the 22nd)
  • Of organisational causes by COVID-19 still in force (those of the 23rd)
  • Those of force majeure deriving from containment measures (those of 2 today).

Be careful! This measure originally included another measure: not to consume unemployment. This expires today, 30 September, with some nuances, the translation of which into plain language is for another time (article 8, par. 7).

Compatibility of unemployment with part-time work

On the other hand, those affected by ERTE may perform part-time work without the amount of the benefit being reduced in the proportional part (art. 11) when the ERTE affecting them is:

  • Force majeure COVID19 extended (those of 22)
  • Force majeure resulting from containment measures (those of the 2)
  • Organisational, having moved, as of today, from one of force majeure COVID19 (those on 3)

This measure is applied retroactively in the terms contained in article 12, so that those who have had their benefits reduced because they found part-time work while on ERTE can claim the differences.

Extraordinary benefit for discontinuous and regular permanent employees

Workers with a fixed-term contract or who perform fixed, regular work that recurs on certain dates are entitled to a special allowance (Art. 9) which:

  • Must be applied for before 14 October 2020
  • Will be extended until 31 January 2021
  • The amount of benefit is the same as the amount of unemployment benefit received.

The scope of the benefit is complex within the group described above, so please do not hesitate to contact us.

Sector-specific bonus

We anticipated earlier that the first additional provision introduces a special contribution exemption for certain sectors.

The rebate consists of, in respect of the workers affected:

  • 85% of the employer’s contribution accrued between October and January 2021. 75% if it has fifty or more workers on 29 February 2020.
  • is incompatible with the bonuses described above.

Companies with a CNAE-09 (considering that which is applied to determine the contribution rates, da.1.6) of those indicated in the annex that accompanies RDL 30/2020 or dependent on them in the terms described in the regulation that are eligible:

  • Are on ERTE de Fuerza Mayor COVID19 (those of 22)
  • Transition from a COVID19 Force Majeure ERTE to a Force Majeure ERTE
  • Are in an organisational ERTE COVID19 (those on 23).

RDL 30/2020 includes other issues that we will comment on in later notes. We give priority to ERTE and unemployment due to the deadlines involved.

Do not hesitate to contact us if you have any questions or want to evaluate options for the viability of your company, better now than later.

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