Key Points of the New Extension of ERTEs in Spain

Published on 27 January 2021

At the peak of the third wave, in which mainly the restaurant and trade sectors are again being hit hard by the restrictions imposed by the Autonomous Communities to try to contain the rapid expansion of the virus, and in light of the fact that currently there are more than 700,000 people in ERTEs (collective procedures for the temporary suspension of employment), the government and labour representatives/organisations passed the IV Labour Agreement in Defence of Employment on 19 January 2021.

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The new regulation does not include significant differences with respect to those already in force from Royal Decree-Law 30/2020 of 29 September. The most notable characteristics of the agreement reached between the government, business associations and unions may be summarised as follows:

  1. Automatic extension of ERTEs due to reasons related to COVID-19 from 1 February 2021 to 31 May 2021.
  2. The prohibition on dismissals due to ETOP or force majeure related to COVID-19 is extended until 31 May 2021.
  3. The list has been extended of economic activities (CNAE) belonging to sectors with a high level of ERTEs and a low rate of recovery of activity.
  4. Exonerations from contributions to the Social Security are maintained depending on (i) the size of the company (more or less than 50 workers) and (ii) the type of ERTE.
  5. The same terms for processing are maintained for new limitation or impediment ERTEs.
  6. Steps are simplified for those companies with an ERTE due to impediment or to limitations which wish to go from one form to another by sending a communication to the corresponding labour authorities.
  7. The undertaking to maintain employment for six (6) months under the same terms as those included in Royal Decree-Law 30/2020 of 29 September is maintained.
  8. Also preserved are the limits affecting the distribution of dividends, performance of overtime, externalisation of activity, formalisation of new employment contracts and the interruption in the calculation of the duration of fixed-term contracts for those workers affected by an ERTE due to force majeure or ETOP related to COVID-19.

Currently the unemployment rate is practically the same in Spain as the rate recorded in 2011. The construction, services and industrial sectors are undoubtedly the most affected by the pandemic. It is, thus, positive that in this complex political environment, the government and labour representatives/organisations have again fulfilled their promise of dialogue seeking solutions to mitigate the serious impact on labour and the economy caused by the virus.

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