(This article was updated here and here) Due to the Corona virus crisis, many Spanish companies (think of airlines, hotels, restaurants, leisure sectors) are now proceeding to suspending employment temporarily. The so called ERTE, or Temporary Suspension of Employment procedure allows employers to suspend work or reduce working hours in case of Force Majeur (the Spanish Ministry of Labor has qualified the Covid19 crisis as such). This procedure is not to be confused with the so called ERE, which has a definitive character, i.e. the employment finishes. In the UK a similar procedure is furlough.

The ERTE (or furlough) 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.

B.A.S. helps foreign companies understand and navigate the Spanish legal system. If you have any questions with respect to this or other legal issues you or your company may experience do not hesitate to call upon us. Contact via website or call 0034 610 739 364.

We also wrote on the limitations on foreign investment in Spain because of the crisis.