The Temporary Suspension of Employment (or “ERTE” abbreviated in Spanish or furlough in English) procedure has been the tool of choice to suspend employment quickly during the Covid19 crisis in Spain. We published an earlier post explaining the ERTE procedure. In this post we provide an update on the situation the furloughs are provoking. After the first Royal Decree that provided for furloughs or ERTEs in its articles 22 (ERTE because of Forece Majeur) and article 23 (ERTE because of economical, technical, organisational and productional causes), a second Decree was issued. The second Decree contains amongst others complimentary measures to facilitate the processing of ERTEs and unemployment benefits that are due during the furlough.
Update on 2 April 2020
According to the Spanish government 620,000 workers have been suspended by Spanish companies from work since the COVID19 crisis began. Sindicates however estimate that more than 1,8 million workers are affected by furloughs.
Recap, what is an ERTE?
The ERTE due to Force Majeur because of the COVID19 pandemic was as follows since the 16th of March 2020:
- The ERTE procedure is supervised by the Labor Inspection Authorities. The procedure has to be approved by such authorities which at the moment might be subject to delays.
- The employer of course needs to indicate whether it wants to suspend employment in its entirety or instead only reduce working hours.
- The employer does not need to pay salary or indemnities (as is the case with a permanent lay off). It does however has the obligation to keep on paying social security and to readmit the employees to their previous jobs when the situation that allowed for the suspension / reduction is over.
- Such an ERTE procedure can be initiated when the employers has 10 employees or more. If an employer has more than a 100 employees the measure needs to affect at least 10% and 30% if there are more than 300 employees.
- This ERTE procedure does not require a period of consultations with the employees as would be the case in other circumstances.
- Employees can apply for unemployment benefits during the time of suspension;
- The Company can apply for the force majeur ERTE during the entire period of force majeur. There is no deadline within that period.
- Once the temporary situation has ceased and the employees go back to work, the company needs to reatin them for at least 6 months.
Please contact us or call 0034 610 739 364 if you need any further information on this “ERTE or Furlough COVID19 Spain” topic.