We have probably seen in the news the regulatory developments concerning the ERTES, and the important issue of the agreement reached by the government with the employers and trade unions. One of the important points is the exoneration of Social Security contributions, which are maintained, but with changes in management.
The ERTES are extended until 30 June due to force majeure, but the exoneration of the company’s contribution must be requested by the companies that have this type of file active.
Given the excessive amount of rules that we are dealing with in these months of health crisis, we have to be practical in the explanations that we offer, so that they can be understood and put into practice in a correct way and in the short space of time that we have.
RDL Law 18/2020 regulates the possibility of restarting the total or partial activity of companies with approved RTE’s, either by express resolution or by administrative silence, so we can classify these files as total force majeure or partial force majeure. Those of total force majeure apply to those activities that have impediments to restart the activity in its entirety. The maximum date of application of the existing incentives in terms of contributions is extended until 30 June. Those of partial force majeure can restart their activity partially according to their needs, either until the total restart of their activity or until 30 June. The Council of Ministers reserves the right to extend them depending on the restrictions on activity directly related to health reasons.
Companies must notify the Labour Authority of the total waiver of the previously authorised redundancy programme within 15 days from the date on which the waiver takes effect. Similarly, they must notify the Public Employment Service of any changes or total or partial termination of the redundancy programme affecting part or all of the workers affected by the programme.
With regard to the exemption of Social Security contributions, companies that have already authorized a Temporary Layoff Procedure due to force majeure may exempt the company Social Security contributions that have accrued during the months of May and June, as follows:
The exemption percentages depend on the month in which the social security payments are made, the type of ERTE in force that is to be exempted, total force majeure or partial force majeure, and the number of workers as of 29 February 2020, for the calculation of the 50 reference workers.
The regulation introduces limitations to the exemption of quotas, and companies domiciled in countries or territories classified as tax havens in accordance with the regulation will not be able to take advantage of these measures. Companies that distribute dividends during the 2020 tax year may benefit from the ERTEs of force majeure but may not apply for exemption from social security contributions. In different terms, companies that distribute dividends during the 2020 tax year, but that had less than 50 employees as of February 29, 2020, may benefit from both the force majeure ERTE and the exemption of social security contributions.
Due to the inclusion in the published regulations, we return to comment on the interpretation to be made regarding the commitment to maintain employment, which has existed since its inclusion in RDL Law 8/2020. The obligation to maintain employment exists since then for the six months following the date of resumption of the activity, either of partial or total reincorporation of the workers. An exception to this obligation is made for companies which consider that there is a risk of insolvency proceedings. The rule again discriminates against us by sector and activity, since the Administration will assess the applicable labour regulations according to the characteristics of the companies, their activity, situation and seasonality.
The obligation will be breached if the companies affected by the reference files dismiss or terminate the employment contracts of workers affected by the temporary suspensions or reductions in employment. Disciplinary dismissals declared to be appropriate, resignations, death, retirement or total permanent disability, absolute or severe disability of the worker, the termination of temporary contracts or the end of the call for discontinued employment are not taken into account.
Failure to comply with this commitment entails the reimbursement of the contributions exempted during the period, plus the surcharges and interest for late payment that may be applicable by law. It will be necessary to add the sanctions determined in the Law on Infractions and Sanctions of Social Order, for the determination of fraud by the corresponding Administration.
This RDL 18/2020 also introduces novelties in the ERTEs due to economic, organizational, technical or production reasons, despite the fact that it maintains the procedure established in article 23 of REDLey 8/2020, regarding the negotiation phase with workers’ representatives. The procedure for these ERTEs may be initiated while the ERTE for force majeure remains in force, and if the procedure is initiated after the ERTE for force majeure has been completed, the date of effects may be retroceded to the date of completion of the ERTE for force majeure, so that the steps and procedures are expedited in accordance with the needs of companies to adapt to the new requirements for resuming activity. The ERTEs due to economic, organizational, technical or production causes that are in force at the date of entry into force of this regulation, will continue to be in force according to the date determined in the communication to the Labor Authority.
With regard to unemployment protection, the measures remain in place until 30 June 2020, except for discontinued permanent workers, whose benefits will continue until 31 December 2020 if their contracts have been suspended for reasons related to the health crisis.
In order to jointly monitor all the measures established in this RDL, a tripartite commission for the de-confinement process has been created, made up of the Ministry of Labour, the most representative trade unions (UGT and CCOO) and the employers (CEOE and CEPYME), who will jointly carry out monitoring tasks with respect to the measures adopted in this phase of exceptionality mitigated by de-escalation.
As a procedure to be taken into account, the companies must notify the Labour Authority of their resignation from the ERTE that they have in force within 15 days from the date of effect, previously notifying the Public Employment Service of any variations in the data contained in the initial application of the ERTE in force with respect to the initial access to unemployment benefits specific to this state of alarm, either with respect to the extinction of said benefits due to their incorporation into the effective provision of services, or with respect to the percentage of activity that they intend to modify in order to adapt it to the resumption of the company’s activity.
A scenario of transition to normalcy or to what we have been calling de-escalation or end of confinement has been created. The need to maintain the measures established for the maintenance of employment offers us a scenario of adjustment and adaptation of the regulation to the activity of the companies and organizations, so that we will progressively go to a normalization of the business activity, with the minimum destruction of employment possible.
We must also take into account that for the resumption of activity there are other forms of service provision that can mitigate the health risks existing today, which go through a real and balanced organization of the services that each company must maintain, which can be done in person and which not, and a proper assessment of existing risks to adapt the provision of labour services to the new scenario of de-escalation.
Lupicinio International Law Firm
C/ Villanueva 29
T: +34 91 436 00 90
Av. Diagonal 520
T: +34 93 488 28 02
Ricardo Acosta Fernández