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Coronavirus triggers ERTE: what they are, how they work and other keys for companies and workers

Sunday, 17 May, 2020

The rapid spread of the coronavirus in Spain is causing the drop in activity of many companies, beyond the shops, bars and restaurants that have been forced to close down. Some giants such as SEAT, Volkswagen or Burger King have announced that they are going to launch a Temporary Employment Regulation File (ERTE) to deal with the situation and from Moncloa calculate that the extraordinary measures that have been activated could affect even a million jobs. For this reason, the Government has made this figure more flexible in an attempt to avoid the destruction of employment.

In this scenario, we review what an ERTE consists of, how it works, how it affects the worker's income, what it contributes to a company and, if necessary, how such a process is contested.
1. What is an ERTE and what are the implications?

As the EFE agency explains, an ERTE is a temporary suspension of contracts. Therefore, it is a break in the employment relationship between company and employee that is established for a certain period of time, although it can also be specified in a reduction in the working day. Therefore, the ERTE can translate into fewer hours of work or, the suspension of the whole day.

This figure appears in article 47 of the Workers' Statute and, as the employment relationship does not end (it is simply paralyzed), the employee does not lose seniority, but neither is he entitled to receive compensation (since it is not a dismissal). And that is the main difference that exists with a traditional ERE, which is included in article 51 and does concern the end of the employment relationship.

2. How is it applied?

There are different types of ERTE. According to Lefebvre, the company specialized in legal and practical information for lawyers, ERTEs exist for economic, organizational or production, technical, and force majeure reasons. Neither requires a number of affected employees or takes into account the number of company workers). However, the Executive has ruled that all be considered due to force majeure, as long as there is a direct impact of the measures that have been adopted to combat the coronavirus.

The company details that some assumptions are the loss of activity as a consequence of the Covid-19 and the state of alarm, which imply "suspension or cancellation of activities, closure of places of public influx, restrictions on transportation and mobility of people and / or merchandise, lack of supplies that prevent the activity from continuing, or in urgent and extraordinary situations due to the contagion of the workforce or the adoption of preventive isolation measures. "

The deadlines for a Temporary Employment Regulation File have also been lightened. They will be resolved in a maximum of one week and, as EFE stresses, "in order to facilitate the process, the standard establishes a procedure that simplifies the requirements, so that companies that want to benefit will have to refer to the labor authority (normally the regional councils) a report linking your request with the government measures that have harmed you. ” In addition, the company must notify the staff and workers' representatives that it has submitted the request to initiate the temporary regulation file.

Once requested, the labor authority has five days to resolve it (once it has received the report from the Labor and Social Security Inspection if it has requested it, which is also five days). Another of the measures put in place by the Government is the reduction of the period of consultations with the representatives of the workers or the representative commission of the same from 15 to 7 days.

If the requirements are met and the ERTE is authorized, and as face-to-face care is currently suspended in the SEPE offices, “there is no need to carry out procedures to collect unemployment in these cases, since it is processed ex officio. Companies must provide all the data to carry out this management electronically, "emphasizes EFE.


3. What does the company achieve

In short, it represents savings both in terms of wages and contributions. On the one hand, explains Lefebvre, "as long as the temporary ERE lasts, workers will see their wages reduced for the part of the day they stop working."

If it is a question of a regulation of working hours, "the salary is reduced in the same proportion as the hours are reduced, and also the extra payments are reduced, in the same proportion, although it does not affect the computation of vacations" , nuances the company.

On the other hand, if it is a suspension file, the company “for each day not worked, must deduct the days not worked and the proportional part of weekly rest days. During the suspension there are no extra payments or vacations ”.

Usually, the company is obliged to keep the worker registered in Social Security, although in ERTE due to force majeure (such as this case) Social Security exempts companies from paying contributions, payments that the coffers will assume 100% public if they are companies with up to 50 workers and 75% if they have a staff of 50 or more people.

Now, to avoid picaresque, and since the Executive has promoted this alternative to avoid the destruction of employment, the companies that avail themselves of this formula will not be able to fire during the six months after the resumption of activity.copia

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