27 March 2020

Coronavirus: questions and answers following the new package of measures decreed by the Government (Royal Decree-law 8/2020)

On 18 March has been published at the Official State Gazette the Royal Decree-law 8/2020, of 17 March, of urgent and extraordinary measures to deal with the economic and social impact of COVID-19 (RDL 8/2020), in which the Government is specifying, among other things, important aspects in the field of employment, clearing up various unknowns and opening the door to different interpretations as to their implementation, which we will now go on to discuss.

Teleworking

• The aim is to promote alternative organisational systems that allow work to be maintained, with the company having to adopt the appropriate measures as far as possible. Teleworking is a prior measure over temporary cessation or reduction of activity.

• In compliance with the Law on the Prevention of Occupational Risks (LPRL for its Spanish acronym), the obligation to carry out risk assessment would be complied with a simple voluntary self-assessment by each distant working person. 

• The implementation of these alternative measures are decisive for the Labor Authority in the approval of the ERTE's that are presented. 

Extraordinary measures in relation to the ERTE proceedings due to ETOP and Force Majeure

A set of measures are presented to make the temporary activity adjustment mechanisms more flexible in order to avoid layoffs. In this context, the procedures for Temporary Employment Regulation Files (ERTE, for its Spanish acronym) are expedited, and additionally, ERTEs are reinforced by force majeure.

Therefore, as far as the specific procedure for the implementation of the ERTE is concerned:

• In case of Force Majeure, the procedure is modified by RDL 8/2020 in order to give more importance to the existence of this event. Therefore, it incorporates the need to accompany a report, issued by the company, linking the proposed measure with the adopted governmental measures, with a copy of the evidence documentation.

• In case of ETOP cases (economic, productive, organizational and technical causes), there has been a reduction in the time limits of the procedure: it is initiated by means of the communication to the Labour Authority and the workers. The representative commission for the negotiation of the consultation period must be constituted within 5 days (this commission may pre-exist, or in its absence will be composed of the most representative unions, or subsidiarily by three workers). Finally, the consultation period may not exceed the maximum period of 7 days. 

• In both cases, the mandatory nature of the ITSS report is eliminated, leaving it to the discretion of the Labour Authority.

So... is the coronavirus force majeure or ETOP cause? Is that justification enough to suspend employment contracts?

The Coronavirus is considered to be a source of sufficient cause to suspend work contracts, due to FORCE MAJEURE, according to:

• The losses, that are directly caused by the COVID-19, including the declaration of the state of alarm involving the suspension or cancellation of the activity. 

• In urgent and extraordinary situations due to staff contagion or the adoption of preventive isolation measures decreed by the Health Authority.

In our opinion, cases that clearly fall into one of these categories could be dealt with by force majeure. However, companies that present rather hybrid situations should thoroughly analyze their situation and evaluate the probability of success of a case initiated by force majeure, adjusting in this regard, the part of the workforce on which the measures fall and the severity of the measures, on the considerations that (i) force majeure is the only option that will benefit from the exemption of social security contributions, with the addition that (ii) this option does not require the opening of a negotiation period.

Extraordinary contribution measures 

Only companies that undertake ERTEs due to force majeure will be exempted from the payment of employer's social security contributions (75% of companies with more than 50 workers registered with Social Security, and all companies with less than 50 workers). 

Extraordinary measures for unemployment protection 

• The workers affected are entitled to receive the unemployment benefit, regardless of the minimum contribution period required to accrue it.

• In relation to the amount of the compensation, the regulatory base will be the result of computing the average of the bases of the last 180 days of contribution, or, failing that, the lower period contributed. 

• It will be extended until the suspension of the suspension of the employment contract or the reduction of the working day.

Labour measures to support workers, families and vulnerable groups to promote reconciliation

The RDL 8/2020 establishes measures to provide for work-life balance, through the right of employees who can prove that they have a duty of care to dependent persons, due to the exceptional circumstances related to the prevention of the extension of the COVID-19, to have access to the adaptation or reduction of their working hours, being those circumstances the following:

• The presence of the worker is necessary for the care of a dependent person who, because of age, illness or disability, needs personal and direct care as a result of the COVID-19.

• The closure of educational or other facilities providing care or attention to the person in need. 

• The person who has been responsible for the direct care or assistance of the dependent persons cannot continue to do so for justifiable reasons related to the COVID-19.

The measures for the conciliation are: 

1. Adaptation of the workday

This right must be initially specified by the individual worker, taking into account his or her specific needs for care and the needs of the company, trying to bring about an agreement between the two parties.

This could be referred to the distribution of the working time or any other aspect according to the working conditions. The features and the adoption of this measures are temporary and exceptional, according to the state of alarm caused by COVID-19. 

2. Special reduction of the working day in the situations provided for in Article 37.6 and 37.7 ET

To exercise the right to reduced working hours, it will be necessary: (i) to comply with any of the exceptional circumstances already detailed (ii) a proportional reduction in salary, (iii) notification the company 24 hours in advance, (iv) it may be up to 100% of the working day, in which case it must be justified and reasonable and proportionate in view of the company's situation, (v) it is not necessary for the family member requiring care and attention not to carry out paid activity, and (vi) except for the above particularities, this special reduction will be governed by the provisions of Articles 37.6 and 37.7 ET.

In the case of workers who previously enjoyed a reduction in working hours, they may renounce it and renegotiate a new condition adapted to the temporary nature of the situation. 

Self-employed workers or freelancers. Benefit for cessation of activity

Self-employed workers and/or freelancers (i) whose activities have been suspended, or (ii) whose billing in the month prior to that for which the benefit is requested is reduced by at least 75% in relation to the average billing for the previous six-month period; shall be entitled to the benefit for cessation of activity, provided to the compliance with the following conditions and requirements:

• Be affiliated and registered on the date of declaration of the State of Alarm in the RETA or in the Special Regime for Sea Workers (RSTM, for its Spanish acronym).

• Proof of reduction in billing, if the activity is not directly suspended.

• Be up to date with payment of SS contributions.

For the amount, it would be the result to apply the 70% to the regulatory base calculated in accordance with article 339 LGSS. If the minimum contribution period is not evidenced, the amount would be 70% of the minimum contribution base in the RETA or in the RSTM.

The duration will be one month, starting from the declaration of the State of Alarm (14 March 2020) and extending, if necessary, until the last day of the month in which the State of Alarm ends. The time of receipt shall be deemed to be the time of contribution and shall not reduce the periods of severance pay to which you may be entitled in the future.

The cessation of activity benefit shall be incompatible with any other social security benefit.

Commitment to maintaining the employment

Finally, it is essential to point out that RDL 8/2020, in its sixth transitional provision, makes the possibility of benefiting from these extraordinary measures in the field of employment conditional upon a commitment by the company to maintain employment for a period of six months from the date of resumption of activity.

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