Employment 27. March 2020

Spain: Flexibilization of temporary adjustment mechanisms to prevent dismissals

27. March 2020
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Victoria Caldevilla
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act legal Spain

Royal Decree-Law 8/2020, of 17 March, on extraordinary urgent measures to face the economic and social impact of COVID-19 (“RDL 8/2020”).

Exceptional procedural measures related to the termination of contracts and reduction of working hours in the event of force majeure

Force majeure events: Contract suspensions and working hour reductions directly deriving from the loss of business activity as a result of COVID-19 (including the declaration of the state of alarm). Said losses shall imply the suspension or cancellation of activities, the temporary closure of establishments open to the public, restrictions on public transport and the free movement of people and goods, a lack of supplies that puts great strain on ordinary activities, or extraordinary and urgent situations caused by the infection of staff members or the adoption of measures calling for pre-emptive isolation (issued by the relevant health authorities).

Procedure

  • The company shall file a request and attach a report detailing the loss of business activity caused by COVID-19, as well as any supporting documentation (where available). The company must notify workers of its request and submit the report and any supporting documentation to their representatives (if any).
  • Labor authorities, regardless of the number of workers affected, must corroborate a force majeure event.
  • The decision taken by the labor authority shall be issued within five days from the date of the request, following a report (where applicable) of the Labor and Social Security Inspection Body.
  • The Inspection Body decides on the application of measures related to contract termination or the reduction of working hours, effective from the moment the force majeure event takes place.
  • The report drafted by the Labor and Social Security Inspection Body, as requested by the relevant labor authorities, will be looked at within a non-extendable period of five days.

Exceptional procedural measures related to the termination of contracts and reduction of working hours for financial, technical, organizational, and production-related causes

  • In the event no legal representation exists, the main trade unions in the company’s sector will make up the commission in charge of representing the workers. They shall lawfully negotiate the applicable collective agreement. The commission shall be made up of a member of each trade union that meets the abovementioned requirements. Decisions will be taken on the basis of the representative majorities established. In the event the commission cannot be constituted this way, it shall be made up of three workers from the company, elected in accordance with the provisions set forth in article 41.4 of the Workers’ Statute. The representative commission must be constituted within a non-extendable period of five days.
  • The consultation period between the company and the abovementioned workers’ representatives shall not exceed seven days.
  • The report drafted by the Labor and Social Security Inspection Body, as requested by the relevant labor authorities, will be looked at within a non-extendable period of seven days.

Extraordinary contribution-related measures related to the termination of contracts and reduction of working hours in the event of force majeure due to COVID-19.

  • In temporary lay-offs caused by a force majeure event, the company shall not have to pay corporate contributions for as long as contracts are suspended or working hours reduced for said cause, provided that, on 29 February 2020, the company was making social security contributions for less than 50 workers. If, however, the company had 50 or more employees for whom social security contributions were being paid, this exemption will cover 75 %of the contributions made by the company.
  • This waiver will have no effects for the worker, since contributions will be deemed to have been regularly paid during this period.
  • The Social Security Treasury will apply these contribution exemptions upon the request of the employer. Said person must have previously identified the workers affected and notified the duration of the suspension or reduction of working hours.

Extraordinary measures in terms of unemployment benefits, based on the application of the procedures mentioned in articles 22 and 23

  • The recognition of the right of workers affected by this situation to receive unemployment benefits, regardless of whether they have met the minimum contribution requirements or not.
  • The period of time a person spends on unemployment benefits as an immediate result of these extraordinary circumstances will not be taking into account when calculating the total benefits the worker is entitled to based on his/her contributions. The goal is for workers to be covered by unemployment benefits for as long as possible.

Temporary limitation of the effects caused by submitting extemporaneous unemployment benefit requests.

  • During the period extraordinary measures are in force, the submittal of first-time unemployment benefit requests (or those of a continuous nature) outside the deadlines legally established will not reduce the duration of the benefits period.

Sixth additional provision. Employment safekeeping. The extraordinary employment measures set in the present royal decree-law shall be subject to the company’s commitment to guarantee employment during the six months that follow the resumption of business activities.

Tenth final provision. Term of validity. The measures foreseen shall remain effective for one month from their entry into force (18 March 2020). However, after a careful assessment of the situation, the Government can extend their duration by means of a royal decree-law. Notwithstanding the foregoing, the measures foreseen that do have a specific period assigned will be valid for the term detailed.

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|
Victoria Caldevilla
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act legal - DA Lawyers
About the author

Victoria Caldevilla

Partner

Regular advice to numerous prestigious domestic and foreign companies on employment and labor matters, giving support to the client’s Executive Committee and focusing her advice throughout a knowledge of client’s business model and its industry. Adviser on the adjustment of employment levels ("expediente de regulación de empleo") and collective bargaining agreements.

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