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Protection from effects of COVID-19

Government agrees with social stakeholders to extend Temporary Lay-off Plans to 31 May

Tuesday 19 January 2021

The government has reached a new agreement with the social stakeholders to extend ERTEs from 1 February to 31 May, under similar conditions to those that have existed to date. This is the third major agreement on jobs reached since the outbreak of the pandemic. The Minister for Work and Social Economy, Yolanda Díaz, and the Minister for Inclusion, Social Security and Migration, José Luis Escrivá, highlighted the "great climate of understanding" shown at the meetings with the social stakeholders and thanked them for their efforts.

They both stressed the importance of "reaching this agreement sufficient time beforehand in order to offer certainty to workers and companies at a time like the present", strengthening the government's commitment to "protect workers and companies until we return to normality".

The Minister for Work and Social Economy, Yolanda Díaz, stressed the importance of the agreement, underlining that "the DNA of this government is called social dialogue". "We have acted responsibly to offer certainty to companies and also to workers, and we will continue to work in this vein. You can trust this government and this ministerial department", explained Yolanda Díaz.

For his part, José Luis Escrivá underlined that "the model of ERTE approved in September has worked very well", and hence it will be maintained with only some minor adjustments. He further announced the agreement reached with the associations of independent contractors to also extend aid until 31 May.

Maintaining protection

The agreement provides for the extension of all Temporary Lay-off Plans based on COVID-19-related grounds.

Under these ERTEs, new exemptions are recognised for companies employing workers that belong to sectors with a high rate of coverage under the plan and a low rate of recovery of activity, although more generous objective criteria are used to determine these sectors, which will give rise to the incorporation of new National Economic Activity Classification (Spanish acronym: CNAE) codes, which will mean protecting companies that provide work to an additional 50,000 employees.

The ERTEs will maintain their flexible application.

New ERTEs

The possibility is expressly provided for those companies that are affected by restrictions that impede or limit their activity to apply for an ERTE on grounds of impediment or on grounds of limitations from the labour authority under identical procedural terms and requirements as provided by the 3rd Social Agreement to Protect Jobs.

COVID-19 ERTEs based on Economic, Technical, Organisational or Production (Spanish acronym: ETOP) grounds may continue benefitting from both the simplified procedures provided for in Article 23 of Royal Decree-Law 8/2020 and from the possibility - which did not exist in its ordinary regulation - of processing an extension by presenting the labour authority with an agreement to this end with individual worker's committee or trade union representation.

Simplification of procedures

Companies subject to an ERTE on grounds of impediment or limitations, either authorised before or during the time this regulation was in force, will not have to apply to process a new ERTE before the labour authority to move from one plan to another to gain access to the exemptions deriving from changes in the health restrictions, thereby placing them in a situation where an impediment to their activity is due to limiting circumstances, or vice versa.

It will be sufficient to send a communication to this end to the labour authority that has handed down the resolution corresponding to the ERTE it is under, and to the workers' representation, in order to be entitled to the benefits thereof.

Nor will it be necessary to send a new collective application for benefits under the State Public Employment Service (Spanish acronym: SEPE).

Accompaniment measures

The commitment to maintain jobs is upheld in the terms provided for in Royal Decree-Law 30/2020, which means that companies, having complied with a six-month safeguard period stemming from the regulations in force prior to this provision and which respond to the benefits referred to in the aforesaid Royal Decree-Law (another six-month period), undertake, in consideration for the benefits of the exemptions regulated in the new regulation, to maintain such jobs for another period of six months.

The limits on the distribution of dividends and on fiscal transparency are maintained, together with the limits on overtime and outsourcing of activity, the ban on dismissals and the termination of temporary employment contracts.

Protection mechanisms

The exemption on a grace period, with the meter set back to zero, the rise from 50% to 70% of the percentage to calculate the regulatory base for those who have consumed a 180-day benefit period, the benefits applicable to permanent seasonal workers (including the extraordinary benefit) and the enhanced protection of people affected by an ERTE with a part-time contract will all continue to apply.

Exemptions applicable

The types of ERTE with exemptions up to 31 May include:

  • Ultra-protected sectors. These sectors, contained in the attached list of CNAE codes and their value chain will receive exemptions of 85% for companies with fewer than 50 workers and of 71% for those with 50 or more workers. The exemptions will be the same for both suspended workers and for those that resume their job positions. This list was extended on 22 December and now also applies to new sectors (CNAE code 5530 - camp sites and caravan parks; 7734 - rental of water sport equipment and 9604 - physical maintenance activity) while another three sectors have been removed from the list (1393 - manufacture of rugs; 2431 - cold drawing and 3220 - manufacture of musical instruments).
    Those companies have been included on the list with a CNAE which have not recovered their activity between the end of April and the end of December by 70% and with a percentage of contributors covered by an ERTE on ground above 15%.
  • Companies that have been prevented from developing their activity in one or more of their work centres as a result of the administrative restrictions to fight the pandemic may apply for an "ERTE on grounds of impediment". These companies will be exempt from the payment of National Insurance contributions during the time they are closed and until 31 May 2021, which will be 100% of the company contribution for the period of closure and until 31 May if they have fewer than 50 workers, and 90% of they have 50 or more workers.
  • "ERTE on grounds of limitations". Companies or entities that have seen their activity limited at one or more of their work centres as a result of decisions or measures adopted by public authorities may apply to the labour authority for an "ERTE on grounds of limitations". In this case, the exemptions will progressively fall until 31 May, although it should be noted that these will commence with a 100% exemption in February for companies with fewer than 50 workers and 90% for those with 50 workers or more.
    At present, there are 704,000 people on an ERTE, of which 450,000 are subject to one of the forms that include National Insurance exemptions. Some 193,000 people are on an ERTE in ultra-protected sectors, while another 49,800 are protected as their value chain was protected under this mechanism.
    There are 32,000 people protected under an ERTE on grounds of impediment, while another 175,000 were under the figure of the ERTE on grounds of limitations as at 18 January. In these cases, a slight change can be detected in the number of protected people, which is logical, since these vary according to the administrative restrictions approved from time to time. Another 254,000 people fall outside the forms contained in Royal Decree 30/2020, with no National Insurance exemptions. These forms of ERTE are in continual decline.

Non official translation