30 March 2020

COVID-19: new measures in the field of Employment

More than two weeks have passed since the declaration of the State of Alarm and, therefore, the limitation of the mobility of people to contain the advance of the COVID-19. Since the total number of people infected with COVID-19 and the number of COVID-19 victims who are admitted has continued to grow, the Government has adopted new measures that further control the spread of the virus, limiting to the maximum the mobility of people. Likewise, the Government has also sought to clarify certain effects and consequences of the previous Royal Decree-Law 8/2020, of 17 March, and to establish new content aimed at ensuring better coverage and more effective application of what was established there. To this end, the Government has decided to approve two new Royal Decrees: Royal Decree Law 9/2020 ("RDL 9/2020") and Royal Decree Law 10/2020 ("RDL 10/2020"). Below, we detail the most relevant decisions of these decrees in the field of employment.

1. Royal Decree Law 9/2020, of 27 March, adopting complementary measures, in the field of employment, to alleviate the effects of COVID-19

RDL 9/2020 aims to clarify certain aspects that were left pending in Royal Decree-Law 8/2020, of 17 March, on urgent extraordinary measures to address the economic and social impact of COVID-19, establishing new legal mechanisms and restrictions to curb the effects of COVID-19 on employment.
The main measures approved in RDL 9/2020 in the field of employment are as follows:

Extraordinary measures for the protection of employment

Force majeure and the economic, technical, organizational and/or productive causes ("ETOP") in which the measures of suspension of contracts and reduction of working hours, through a Record of Temporary Regulation of Employment ("ERTE") are covered, cannot be understood as justifying the termination of the employment contract or the dismissal. 

The rule does not clarify the duration of this measure (that is, whether it is limited to the State of Alarm or can be extended further in time). Similarly, it does not clarify whether the result of such dismissals would be the nullity or the impropriety of the same, therefore it will be necessary to wait for possible regulatory developments clarifying these issues.

Extraordinary measures to speed up the processing and payment of unemployment benefits

The application procedure for unemployment benefit must be requested by the employer who has processed the ERTE. The application will require the following items to be completed:

  • Collective application submitted to the unemployment benefits management body and completed on the form provided.
  • Communication, which will also include the following individualised information for each of the work centres concerned:
  1. Name or business name of the company, address, tax identification number and social security contribution account code to which the workers whose suspension or reduction of working hours is requested are assigned.
  2. Name and surname, tax identification number and e-mail address of the company's legal representative.
  3. File number assigned by the labour authority.
  4. Specification of the measures to be adopted, as well as the starting date on which each worker will be affected by them.
  5. In the event of a reduction in the working day, determination of the percentage of temporary reduction, calculated on a daily, weekly, monthly or annual basis.
  6. For the purpose of proving the representation of workers, a responsible declaration in which it must be stated that authorisation has been obtained from the workers for its presentation.
  7. Any additional information determined by decision of the Directorate-General of the Public Service for State Employment.
  • The company must communicate any changes in the data initially contained in the communication, and in any case when they refer to the end of the application of the measure.
  • The communication must be sent by the company within 5 days from the request of the ERTE due to force majeure or from the date on which the company notifies the competent labour authority of its decision in the case of the ERTE due to ETOP. The communication will be sent by electronic means and in the form determined by the Public Service of State Employment.
  • Failure to notify will be considered as conduct constituting a serious infringement as provided for in Article 22.13 of the revised text of the Law on Infractions and Penalties in Social Order, approved by Royal Legislative Decree 5/2000, of 4 August (hereinafter "LISOS").

Interruption of the calculation of the maximum duration of temporary contracts

The suspension of temporary contracts (including training, relief and interim contracts), for reasons of force majeure and ETOP, is established, which will mean the interruption of the calculation, both of the duration of these contracts, and of the reference periods equivalent to the suspended period, in each of these contractual modalities.

In principle, it seems that the measure would only affect contracts suspended by an ERTE due to the crisis generated by COVID-19, but again, further clarification of the provision will be required.

Penalty system and reimbursement of undue benefits

The DL 9/2020 states the following:

  • Applications submitted by companies containing false or incorrect information: The requests presented by the company that contained falsehoods or incorrectnesses in the data provided will give rise to sanctions corresponding to the LISOS. The conduct of the company consisting of requesting measures in relation to employment that are not necessary or have insufficient connection with the cause that gives rise to them, will also be punishable, provided that they give rise to the generation or receipt of undue benefits.
  • Ex officio review and return of undue benefits: The undue recognition of the benefits to the employee for a cause not attributable to him/her will lead to the ex officio review of the act of recognition of said benefits. In such cases, and without prejudice to the administrative or criminal liability that may correspond by law, the company must pay the amounts received by the worker to the management entity, deducting them from the salaries that would have been paid, up to the limit of the sum of those salaries. The obligation to return the benefits will be enforceable until the prescription of the infringements referred to in LISOS.

Date of effect of the unemployment benefits derived from the ERTEs procedures

  • When the ERTE is due to force majeure, the date of effect of the legal situation of unemployment will be the date of the causal event.
  • When the ERTE is due to ETOP causes, the date of effects of the legal situation of unemployment will have to be in any case, coincident with or later than the date in which the company communicates the adopted decision to the labor authority.

2. Royal Decree-Law 10/2020 regulating recoverable paid leave

RDL 10/2020 regulates a kind of recoverable paid leave for employees who do not provide essential services, in order to further strengthen the limitations on population mobility in the context of the fight against COVID-19.

In addition, RDL 10/2020 is accompanied by an annex listing activities that are considered "essential" and in which case paid leave will not apply.

Of all the vicissitudes that this paid and recoverable leave ("PRR") could bring about, we consider the following to be of particular interest:

Which workers are entitled to the PRR?

In general, all salaried employees who provide services in companies or entities in the public or private sector and whose activity has not been paralyzed as a result of the declaration of the State of Alarm established by Royal Decree 463/2020 of 14 March.

Employees excluded:

  • Those who provide services in the sectors classified as essential in the annex to RD 10/2020;
  • Those who provide services in the divisions or production lines whose activity corresponds to the sectors classified as essential in the annex to RD 10/2020, as well as the groups indicated below:
  • Those hired by those companies that have requested or are applying an ERTE (in force or authorised during the validity of the PRR.
  • Those that are on temporary disability leave or whose contract is suspended for other legally established reasons (maternity, paternity, etc.).
  • Those that may continue to carry out their activity normally by means of teleworking or any of the non-presential modalities of service provision.

By virtue of the above

Can companies impose the PRR on workers who telework?

In principle, they cannot, since RDL 10/2020 expressly excludes from its scope of application those workers who can continue to carry out their activity normally by means of teleworking or any of the non-presential modalities of service provision. In general, therefore, RD 10/2020 does not change the teleworking regime of the companies that have been applying it.

What happens if the company is already applying an ERTE?

If the ERTE is for suspension of contract, the PRR will not apply to them. On the other hand, if the ERTE is for a reduction in working hours, the PRR will be applied to them for the proportional part of the working day that remains active.

How long is the PRR?

From Monday 30 March to Thursday 9 April 2020, both inclusive.

What are the consequences of the PRR for workers?

During the period of the PRR, workers will retain the right to the remuneration that would have corresponded to them if they had ordinarily been providing services, including basic salary and salary supplements, as well as Social Security contributions.

How will hours not worked during the PRR be made up?

The recovery of working hours can be made effective from the day after the end of the State of Alarm until December 31, 2020.

This recovery must be negotiated in a consultation period open for this purpose between the company and the workers' legal representation, which will last a maximum of seven days.

In the event that there is no legal representation of the workers, the representative committee for the negotiation of the consultation period will be made up of the most representative unions of the sector to which the company belongs and with the legitimacy to be part of the negotiating committee of the applicable collective agreement. The committee will be made up of one person for each of the unions that meet these requirements, with decisions being taken by the corresponding representative majorities.

If this representation is not formed, the committee will be made up of three workers from the company itself, elected in accordance with the provisions of Article 41.4 of the Workers' Statute.

In any of the above cases, the representative commission must be constituted within a non-renewable period of five days.

During the consultation period, the parties must negotiate in good faith, with a view to reaching an agreement.

What limits should be respected in the recovery of the PRR?

The recovery of these hours may not involve the failure to comply with the minimum daily and weekly rest periods provided for by law and in the collective agreement, the establishment of a period of prior notice shorter than that set forth in Article 34.2 of the Workers' Statute, or the exceeding of the maximum annual working hours provided for in the applicable collective agreement.

Likewise, the rights to reconcile personal, work and family life that are legally and conventionally recognised must be respected.

Can companies maintain some kind of minimum essential activity?

Companies that must apply the PRR may, if necessary, establish the minimum number of staff or the shifts that are strictly essential in order to maintain the indispensable activity. This activity and this minimum number of staff or shifts will have as a reference that maintained in an ordinary weekend or on holidays.

If I have a cause, can I present an ERTE for force majeure or ETOP after the entry into force of RDL 10/2020? Is RDL 10/2020 a new source of force majeure?

With respect to the ERTE due to force majeure, in principle you can, as long as the requirements established by article 22.1 Royal Decree-Law 8/2020 (which regulates the ERTE due to force majeure) are met, which are (i) those closures and shutdowns that have already resulted from the declaration of the State of Alarm; and (ii) those decisions taken by government authorities that imply closure, cancellation of activities and/or mobility restrictions that consequently prevent the continuation of the productive activity.

With respect to the ERTE for ETOP causes, each specific case must be analysed. In principle, we understand that with respect to workers who are teleworking, to whom the PRR does not apply, it should be possible to apply an ERTE for ETOP whenever there are causes that justify it.

On this point, the statements made by the Minister of Labor during yesterday's press appearance, Sunday 29, are also of great interest. She clarified the parameters for the application of the PPR and, when asked if ERTEs can continue to be presented, she responded with a clear statement, recalling that the mechanism that simplifies the ERTE procedure is available to each and every one of the companies in our country, and that what RDL 10/2020 is ordering is a restriction of mobility.

In this regard, taking into account the extraordinary measures adopted, as well as the statements made by the Minister of Labour, in principle we expect that they could continue to present ERTEs. However, once again, our advice is to act with caution, given that the wording presented by RDL 10/2020 in this regard is ambiguous, and therefore we cannot guarantee that the legal text will be able to provide a basis for the presentation of new ERTEs due to force majeure (even though government prohibitions and orders are, per se, a cause of force majeure) or ETOPs.

In this sense, although it does not derive from the statements of the Minister of Labour, we cannot guarantee that in the next few days - tomorrow a new Council of Ministers is scheduled with new measures - the Government will not limit the possibility of presenting ERTEs to those who already had cause prior to the publication of RDL 10/2020.

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