ERTE for COVID-19 resurgence in Spain, how should the company apply for it?

After a brief health recovery in Spain during the months of May and June, the situation has worsened in the last few months. For this reason, both the Spanish government and the competent authorities of the different autonomous regions have adopted new restrictions and containment measures that directly impact companies from various sectors.

In response to these potential restrictions, Royal Decree-law 24/2020 already introduced measures to mitigate the effect of this adverse situation for companies. These measures include the extension of force majeure ERTE (Expediente de Regulación Temporal de Empleo or Temporary Redundancy Plan) requested before 27 June 2020 and with effect until 30 September 2020, and the possibility to apply for an ERTE for COVID-19 resurgence.

What is the ERTE for COVID-19 resurgence?

The ERTE for COVID-19 resurgence is a labour flexibility measure, intended to companies that cannot run their businesses by cause of the new restrictions, and that cannot apply for a new ERTE due to force majeure.

Requirements and advantages of the ERTE for COVID-19 resurgence

The following table summarises the requirements and effects of ERTEs due to resurgence:

FORCE MAJEURE ERTE due to COVID-19 resurgence
(articles 47.3 and 51.7 ET + articles 31 and ff. of Royal Decree 1483/2012 + articles 22 and 24 to 28 of Royal Decree-law 8/2020

Requirements
  • Companies may apply for an ERTE for COVID-19 resurgence when the development or practice of their activities is affected by the new measures adopted by the competent authorities: capacity limitations, working hours, safety distances, etc. Companies must prove that such actions hinder the development of their activity.
Who can qualify
  • Companies that have not previously applied for an ERTE
  • Companies that had an approved ERTE, but expressly renounced it in its entirety or had disaffected all employees
  • Companies in a situation of partial force majeure with an ERTE due to force majeure in effect, affected, in either one or more of their workplaces, by the new restrictive or containment measures due to COVID-19 resurgence.
Procedure
  1. Communication to the employees or, if applicable, to the employees’ representatives, of the start of the ERTE
  2. Communication to the ERTE Labour Authority. The Labour Authority will collect, as a mandatory requirement, a report from the Labour and Social Security Inspectorate
  3. Resolution by the Labour Authority within five working days concerning the existence of force majeure (the report’s request to the Labour and Social Security Inspectorate will interrupt the period for issuing of the Labour Authority’s resolution until the said report is released)
  4. If the Labour Authority considers the existence of force majeure, the company may adopt the necessary measures, and must, in all cases, inform the employees
  5. If there is no resolution within five working days, force majeure will be considered as verified by affirmative administrative silence.
Documentation
  • Communication forms to the Labour Authority specifying the measures to adopt
  • Number and job classification of the employees affected by the contract suspension or the reduced working hours measures. If the procedure concerns more than one workplace, this information must be broken down by the workplace and, where appropriate, the province, and the autonomous community. Details to include: ID, full name, social security number, date of entry into the company, professional group, specialty, category, daily/monthly salary, and age
  • Criteria for the election of employees affected by the suspension of contracts and working hours reduction measures
  • Report on the impact of force majeure on the company’s activity. It is the most relevant document, and it should establish a clear link between the measures taken by the government and their direct consequences on the company’s activity
  • Documentation supporting the cause of force majeure
  • Copy of the communication to the employees or their representatives at the beginning of the ERTE.
Main effects
  • In addition to the corresponding wage savings from the suspension of contracts or reduction of working hours, the approval of an ERTE due to COVID-19 resurgence exempts companies from paying social security contributions as follows:

PERCENTAGE OF EXEMPTION until the 30 September 2020

Registered employees 29/02/2020 Employees FM ERTE due to COVID-19 resurgence
Under 50 Inactive 80%
Active since 01/07/2020 60%
Over 50 Inactive 60%
Active since 01/07/2020 40%
  • Unlike the case of the ERTE due to force majeure of Royal Decree-law 8/2020 of 17 March, no ancillary obligations such as overtime, maintenance of employment rates, outsourcing work, or new hiring, have been expressly arranged for the company.

If you have any question regarding the ERTE for COVID-19 resurgence in Spain do not hesitate to contact us.

This article is not considered as legal advice

Alejandra Sanz

A licensed attorney with a Master's degree in Commercial Law, Alejandra Sanz is specialized in the areas of company labour law and employment law in Spain. Working languages: Spanish, English, and French. For any query Contact Alejandra Sanz