COVID-19 Complementary measures, temporary contracting and dismissals

 

On Saturday 28th March the Official State Gazette published the Royal Decree Law 9/2020 of 27th March, in which complementary measures are adopted in the field of employment in order to mitigate the effects caused by COVID-19.
The regulation explains certain aspects and in particular specifies and limits the effects of situations arising from the working relations established in Royal Decree Law 8/2020, of 17 March, as a result of the health alert issued by the COVID19 and the current state of alarm decreed by the Government.
In the days prior to the aforementioned regulations coming into effect, businesses raised concerns about how to act in the face of what was coming. The anxiety can be justified in a crisis; however, it never brings about good decisions nor the right decision, which must always be made in an informed and clear way. Hasty decisions in a situation of partial or total suspension of activity that prevent or limit revenue in order to contain costs, as well as uncertainty about the material and human resources involved, do not provide good legal certainty.
With the second regulation the details and limitations of these exceptional labour measures are known, which ratifies the need to remain calm. The suspension of employment contracts, the reduction of working hours or their termination in these difficult cases, must be governed by the need to act under the rules, whether or not these are to our liking, since the initiation of the proceedings and the subsequent defence of the same must be adjusted to them.
There are two criteria that the government now explicitly specifies, firstly the temporality of the extraordinary measures while the state of alarm over COVID-19 lasts and secondly that this exceptional situation does not cover “per se” extinctions of labour relations under the benefits of these provisions.
With the first Royal Decree Law there was uncertainty regarding what would happen with temporary contracting and the Regulation of Employment Files (REFs) derived from major causes, related to the COVID19. With the available substantive norms, we laborists were already clear that the legal relationship could not be deprived of its own purpose, with some exceptions. It is in the Royal Decree-Law 9/2020 where the first exception is established for temporary contracts:
“Article 5. Interruption of the calculation of the maximum duration of temporary contracts. The suspension of temporary contracts, including formative, relief and interim contracts, for the reasons set out in articles 22 and 23 of the Royal Decree Law 8/2020 of 17th March, states the interruption of calculation of both the duration of these contracts and the reference periods equivalent to the suspended period, in each of these contractual modalities, regarding the workers affected by them”.
It is now clear that the government’s criterion is that the termination of the contract cannot be articulated as the cause of the health crisis, but it is possible to temporarily suspend the contract while the state of alarm is in force, therefore interrupting the calculation of the maximum duration of the aforementioned contracts. The aim is to ensure that these workers remain in their jobs in activities affected by the health crisis resulting from the COVID19. In the contracts that are not suspended by the ERTE, the object and duration are not affected (e.g.: if the contract is for three months and ends on 10.04.2020 and the worker continues to work, the contract comes to an end and is terminated).
However, without this exception provided for in the rule, it would always have been possible to challenge it in certain forms of procurement not subject to a defined term, such as specific works or service contracts.
With regard to the so-called ban on redundancies’, a term widely used in the press this weekend, it must be said quite clearly that there is no such ban. We can speak of a restriction of dismissals that bring as a cause the state of alarm or health crisis of the COVID19, and it does not allow dismissals for objective reasons in these terms. The idea is that companies that are directly affected and have difficulties as a result of the health alert can benefit from the RSTE and suspend their contracts, at no cost to the companies and keeping their labour relations alive.
“Article 2. Extraordinary measures for the protection of employment. The force majeure and the economic, technical, organizational and production causes underpinning the measures of suspension of contracts and reduction of working hours provided for in Articles 22 and 23 of Royal Decree Law 8/2020 of 17 March cannot be understood as justifying the termination of the employment contract or dismissal”.
There is no prohibition, because nothing prevents companies from making unfair dismissals by paying the legal compensation established for this purpose. This measure tends to maintain the level of employment, discourage “low cost” dismissals under the COVID-19 and protect workers with a lot of seniority, in which case the compensation for unfair dismissal is quantitatively more important. In cases of short seniority, which is the majority, the amounts of compensation have less impact on the decision to terminate employment.
This second Royal Decree Law also specifies the time limitations of RSTEs by limiting their maximum duration to the time the alarm condition is in force, in the following terms:
“Additional Provision One. Limitation of the duration of temporary layoff proceedings based on the grounds set out in article 22 of Royal Decree Law 8/2020 of 17 March.
The duration of the redundancy programmes authorised under Article 22 of Royal Decree Law 8/2020, of 17 March, may not extend beyond the period in which the extraordinary situation resulting from COVID-19 is maintained in accordance with Article 28 of the same law, It is therefore understood that its maximum duration will be that of the state of alarm decreed by Royal Decree 463/2020, of 14 March, which declares the state of alarm for the management of the health crisis situation caused by COVID-19 and its possible extensions.
This limitation will be applicable both to those files for which an express decision has been made and to those which are resolved by administrative silence, regardless of the content of the specific business application”.
The second Royal Decree-Law deals with force majeure and the economic, technical, organizational and production causes alleged by the companies at the time of initiating the employment regulation procedure. Such causes cannot be understood as justifying the termination of the employment contract or the dismissal, that is the “crux” of the matter. Termination of employment contracts cannot have as a cause or basis the situation caused by the COVID health crisis19 , in which case it would become null and void because it had an unlawful cause and the act of dismissal would not be valid or effective. Avoiding entering into legal technicalities, we could say that the rule establishes the closure of such causes for reasons of public utility and national emergency, whose treatment is determined in discriminatory terms or through the violation of fundamental rights.

Therefore, there is no room for dismissal on grounds related to the economic, technological or productive situation related to the health crisis of the COVID19 , but dismissals for objective reasons that are those of Article 52 c) of the Workers’ Statute, as well as disciplinary dismissals, withdrawals and other forms of extinction remain unchanged.
What is certain is that the mobilization of the injured parties will lead to an increase in judicial proceedings which, now that the administrative and procedural deadlines have been paralyzed, will take longer to be identified and will keep the conflict going for a longer period than desired.

 

 

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