The RED Mechanism is already underway

The Government accelerates the implementation of this instrument in the labor market, introduced by the December 2021 reform

On March 16, Royal Decree-Law 4/2022, of March 15, was published in the BOE, which, among other things, defined the procedure to follow for the first RED Flexibility and Employment Stabilization mechanisms.

This last provision, the result of the so-called labor reform of December 2021, conceived the mechanism as an additional formula to the traditional procedures (for economic, technical, organizational or production reasons, or as a result of force majeure) to reduce the working day or suspend the contracts of the affected workers, always on a temporary basis.

The main purpose of this instrument is to provide companies with internal mechanisms to adjust to crisis situations, cyclical changes in demand or transformations in the productive model at the sectoral level, alternatives to high temporality and strong fluctuations in employment (Royal Decree-Law 32/2021, of December 28).

The priority is to reduce working hours, whenever feasible, rather than suspending the contracts of affected employees.

Two modalities

The “cyclical” modality of the mechanism is linked to a general macroeconomic situation that advises the adoption of additional stabilization instruments; It is due to a situation that exceeds a single sector, and its maximum duration will be one year.

The “sectoral” modality occurs in a certain sector or sectors, if permanent changes are observed that generate needs for requalification and professional transition processes of workers. Its maximum initial duration is one year, with the possibility of two extensions of six months each.

Differences for pricing purposes

The files of the cyclical modality, mentioned above, will give the right to an exemption in the Social Security contribution of 60 %, from the date on which the activation occurs (agreement of the Council of Ministers) until the last day of the fourth subsequent month. to said activation date; on 30 %, during the four months immediately following the end of the aforementioned period; and 20 %, during the four months immediately following the end of the period. The sectoral files accompany an exemption for the employer from 40 %.

Right of employees to train

Workers covered by a RED Mechanism will be considered a priority group for access to the training initiatives of the vocational training system for employment in the workplace.

Silence in a positive sense

The labor authority must issue a resolution within seven calendar days from the communication of the conclusion of the consultation period. If, after said period, no express pronouncement has been made, the measure will be deemed authorized (positive administrative silence), always within the legally and regulatory limits established.