The labour world in Spain after the alarm state
With the coronavirus crisis, many companies are going through huge problems to keep their business and their employees.
Last March we informed you in this blog about the creation and use of the ERTE mechanism due to force majeure (¨furlough scheme¨) as a method to avoid paying wages during the time of pandemic and confinement imposed through the state of alarm.
Now, once the biggest problems derived from COVID-19 are over, we find the consequences: the decrease in the economic activity is notorious and palpable: tourism is almost non-existent, shops remain closed and people are not consuming products and services due to the fear of the crisis economic in which we live.
What measures can be taken in the “new normality”? Broadly speaking, we find four main scenarios
1.ERTE’s extension due to force majeure
Through this measure, there is currently an agreement to extend due to force majeure and until September 30th, the ERTEs approved under the state of alarm. Right now, there are negotiations to be able to extend these ERTE until the end of the year, imposing, however, a series of conditions much stricter than the ones approved in March, April and May; in other words: companies are obliged to assume a part of the workers’ Social Security contributio
2. Productive ERTE
Through this measure, it is possible to obtain the approval of the “normal” ERTE; that is to say, that ERTE in which the company proves business activity decrease and justifies the reason why incorporating the workforce into the ERTE is the best (or less bad) option. This solution allows you to continue to exist as a company and reduce labour cost. The main setback of this measure is the need to go through a stricter control by the labour authorities and the mechanism by which it must be carried out: creation of an “express company committee” in the event that it does not exist, and negotiate with the it this possibility with the ultimate goal of preserving jobs.
3. Working conditions’ substantial modification
Through this measure, a modification of the working conditions can be imposed on workers, such as the number of hours worked, work centre, etc. The main drawback of this measure is that the workers, in defence of their labour rights, may file the corresponding appeals before the competent court, being able to request the termination of the employment contract with its corresponding compensation.
Dismissal is the most drastic solution, as there is no other possibility of flexibility in the Spanish legal system. In Spain, there are two different types of dismissal: disciplinary and objective. Disciplinary dismissal is the one derived from the infringement committed by the worker. The objective dismissal is derived from the situation of the company in which for ETOP reasons (economic, technical, organizational or productivity) decides to stop using part of the workforce, paying for that a compensation of 20 days per year worked with the limits established by the law. Now, due to the obligation to preserve the level of employability in all those companies that have used the ERTE mechanism, we find that companies that have already used this mechanism and decide to fire workers because they have no choice but to do so, they will inevitably be faced with a summons from the Labour Inspection. This inspection will end with a sanction in which it will force the return of the benefit obtained through the ERTE, and a possible fine.
For all these reasons, we recommend you to hire our specialized legal advice to carry out any of the measures that are currently within the law. Taking the measures incorrectly can have economic consequences for the company that, instead of favouring its financial situation, does nothing but harm it. The attorneys at OTIS Advocaten can advise you.