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Spain: COVID-19 – New support measures for temporary redundancy schemes in Spain

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In brief

The impending end, on 30 September, of temporary redundancy schemes (ERTEs) based on COVID-19 force majeure as well as the support measures for these schemes prompted the government to pass, in extremis, Royal Decree Law 30/2020, of 29 September, on social measures to protect employment, pursuant to which a range of measures are adopted to ensure that existing ERTEs are extended and new ones approved if circumstances justify them. The regulation is based on Social Agreement to Protect Employment III, which was reached by the government, trade unions and companies. It will enter into force on 30 September 2020.

Although the regulation introduces a variety of measures – social assistance, Social Security measures, changes to the minimum living wage, and so on – the key new developments in employment matters introduced by Royal Decree Law 30/2020 are as follows:

  • Already existing ERTEs based on COVID-19 force majeure are automatically extended, while ERTEs based on COVID-19 economic, technical, organisational or production grounds are kept in place until 31 January 2021.
  • Exemption from paying Social Security contributions for these ERTEs will only be available from October for force majeure ERTEs for companies that have been particularly affected by the pandemic (depending on the National Classification of Economic Activities, CNAE), and in the case of ERTEs based on economic, technical, organisational or production grounds, if these are also ERTEs transferring from or continuation of a force majeure ERTE. This essentially concerns companies in the tourism, leisure, transport and retail sectors.
  • New ERTEs may be applied for if the authorities adopt new restriction and pandemic containment measures that hinder or limit business activity.
  • These new ERTEs are also exempt from paying Social Security contributions.
  • Bans on dismissals on COVID-19 grounds, dividend distribution, working overtime, new hiring or new outsourcing are kept in place.

The commitment to maintain employment for six months is kept and new commitments to protect employment for the same length of time are imposed if companies benefit from further exemptions from October 2020.

In the following link you will find the key points and a summary of Royal Decree Law 30/2020.

Click here to access the Spanish Version.

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Author

Mireia Sabate is a partner in Baker McKenzie’s Barcelona office. She practices mainly in the areas of labour and employment law. Ms. Sabate also regularly teaches at universities, having lectured on labour institutions and litigation at ESADE Law School in Barcelona, and conducted training on employment termination at ISDE (Higher Education Law and Economic Institute). She is teaching courses on social security law at the Universitat Internacional de Catalunya. Ms. Sabate has also provided training in equity law at the Barcelona Chamber of Commerce, and on the free transfer of employees at the Barcelona Bar Association.

Author

Carlos de la Torre joined Baker McKenzie as of counsel in 2014. He has more than 20 years of experience in the field of labor law in Spain and in the UK. He was labor inspector (on leave) and has held high-level positions including Counsellor for Transport at the Spanish Embassy in London and Permanent Representative of Spain to the International Maritime Organization and the International Oil Pollution Compensation Funds, where he advised on the Spanish claims. Mr. De la Torre is co-director of the Labor Law and CSR and Law forums at Foundation for Research of Law and Business (FIDE) and associate professor of employment law at Carlos III University.

Author

María Jose Martin is a Team Leader in Baker McKenzie Madrid office.

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