The fear of the end of the labor reform has triggered its use by companies in the last stretch of 2019.
The ERTE is the acronym that corresponds to the Temporary Employment Regulation File provided for in Spanish legislation that allows companies, in some cases, to carry out the suspension of the employee's employment contract or the reduction of the employee's working day.
For the company to adopt the measures of an ERE (Employment Regulation File) such as: the reduction of the working day, the suspension of the contract or the total termination of the employment relationship, the legislation requires following a certain procedure in which the labor authority to guarantee the rights of workers. Said company will have to comply with some formalities in accordance with the law, such as a consultation period in which the representatives of the company and the workers must negotiate with the maximum of trying to obtain an agreement.
OBJECTIVE CAUSES OF A TEMPORARY ERE
There are four types of objective causes that would allow an employer to carry out an ERE, Spanish legislation does not define them as such (as happens when it regulates objective dismissal for business reasons) but rather establishes the relationship that must exist between these and contractual termination. Below we describe the 4 situations that can cause an ERE:
- Economic causes, the most frequent, are when a company presents an economically negative situation, either due to constant losses over successive periodicities or because income has suffered a continuous decline. It will be understood that the economic causes of collective contractual termination occur when the adoption of the proposed measures contributes to overcoming a negative economic situation of the company.
- Technical causes, reasons why the company stops being viable when there is a change in production tools.
- Organizational causes, occurs when changes are introduced to improve the work system, such as the closure of a workplace and centralization of a service in a single center, merging staff in a single center, eliminating a department when it is outsourced. all or some of their jobs (such as the Marketing or Accounting department, for example)
- There are production causes when companies can allege that there are declines in sales or hiring of the company's own activity not in a specific manner, but in a sustained manner over time.
TYPES OF ERE (COLLECTIVE DISMISSAL, TEMPORARY SUSPENSION, REDUCTION OF HOURS)
When talking about ERE, we may be talking about Collective Dismissal, Temporary Suspension of contracts or ERE with reduction of working hours.
Collective dismissal, it is an extinctive ERE where the purpose of this procedure is to be able to fire all or part of the staff in order to save costs and save the company.
Temporary suspension of contracts of part or all of the staff. During the period in which the contracts are suspended, workers will receive unemployment benefits from the State Public Employment Service (SEPE).
ERE with reduced working hours, this is the procedure through which employees have their working hours reduced for a limited period of time. During the period in which the working day is reduced, workers will receive the corresponding unemployment benefits from the State Public Employment Service (SEPE) to complement the full working day.
ERE TEMPORARY OR ERTE
In a Temporary Employment Regulation File, the file for suspension of labor relations is temporary and is limited to objective causes. It is designed to solve a bad situation of the company and therefore it is implicit that the situation will improve in the future.
Measures of suspension or reduction of continuous working hours can be articulated during specific periods or discontinuously over longer periods, but the measure must ALWAYS be temporary, which is why a maximum period of application must be set.
ERE SUSPENSION OF THE DAY OR ERE REDUCTION OF THE DAY
-The suspension of working hours in an ERE occurs when there is a temporary cessation of work provision and affects full days, whether consecutive or alternate, for at least one work day.
In the ERE of suspension of working hours, the company continues to contribute to Social Security for each of the employees; when the ERTE period has ended, the company can resume the contracts or terminate them.
-A Reduction of working hours is a temporary reduction between 10% and 70% of the working day. The reduction can be applied to the daily, weekly, monthly or annual working hours. In this case, the worker will consume his unemployment benefit by hours and not by days.
During the time that the Temporary Employment Regulation File lasts, the company can subsidize half of the Social Security contributions for common contingencies for a maximum of 240 days per worker. This ERE bonus can be enjoyed by the company if it maintains these workers for 12 months once the temporary ERE has ended.
While the temporary ERTE lasts, the worker will continue to contribute with the same contribution base. The company will pay the employer's contribution to Social Security and the SEPE will contribute part of the time not worked.
The company does not have the obligation to notify the worker of the conclusion of the temporary ERE, given that it is known and there is documentary evidence and it has already been communicated during the beginning of the process.
Moonlighting is permitted in the case of a worker affected by a temporary ERE where he or she can obviously work for another company as long as he or she notifies the intervening agents (the company and the State Public Employment Service). The worker in this case stops collecting the unemployment benefit that he obtained because he was in an ERTE situation.
Unlike an ERE, there is no minimum threshold that affects workers. The adoption by the company of a labor ERTE does not give the right to compensation to be able to balance the salary that has decreased as a result of the reduced working day, what it does allow, if the requirements established by law are met, is the receipt of unemployment benefit (unemployment).
PROCEDURES IN A TEMPORARY ERE (ERTE)
An ERTE is regulated in article 47 of the Workers' Statute and begins with a letter from the company to the legal representatives of the workers where the opening of a consultation period is communicated, explaining the causes on which the ERE is based.
- This document must detail the number of affected workers.
- Duration period of the ERTE affectation
- Criteria used to select affected workers
- Signed and dated company certificate with contributions from the last 180 days.
- The company must complement this letter with an accounting report in which it bases its reasons for the ERTE.
- All affected workers should receive a copy of this letter
- Finally, the company will deliver a copy to the Labor Authority. Within the scope of the Autonomous Communities, the body determined by the Autonomous Community will be considered the competent Labor Authority for the resolution of the employment regulation procedure (second section of article 51 of the Workers' Statute), which will transfer the letter to the Labor Inspection as well as the SEPE.
For any questions related to an ERE or ERTE in your company, do not hesitate to contact our consultancy.
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