All Spain’s Social Agents Agree To Extend Temporary Layoffs Schemes Until January 31

ERTESSpanish Ministry of Labour, Yolanda Díaz, in a meeting with trade unions’ respresentatives at the left and employers’ representatives at the right

On Tuesday, the Council of Ministers approved the extension of the temporary layoffs programs (ERTE) until January 31, 2021. This came in the wake of the pre-agreement reached with all social agents, unions and employers, according to Europa Press

The agreement raises the exemptions of the business quotas in the case of ERTEs for Covid19 resurgence, those that companies can present if their activity is affected by restrictions imposed by the Spanish or foreign authorities. All firms requiring it will be able to apply for these resurgence programmes from October 1st. There will be 100% exemptions when the activity of a company with less than 50 employees is halted, and 90% if it has more than 50.

In the event the Spanish authorities limit the normal development of the business it has been established, with a retroactive effect from September 1, that there will be company exemptions of 100% in October for workers affected by the ERTE. This declines to 90% in November, 70% in December and 60% in January 2021 if the company had less than 50 workers on February 29 of this year. If it had more, the deductions will be 90%, 80%, 60% and 50% for each month in the October-January period.

The government is maintaining the idea that the extension of the force majeure ERTE should be focused the sectors most affected by the pandemic — the National Classification of Economic Activities (CNAE-09) will be used for this purpose. These include the tourism sector.

The ERTE for these sectors will have quota exemptions of 85% for each month of the period October 2020-January 2021, if the company had a staff of less than 50 workers as of February 29 of this year. This will be cut to 75% if it had more than 50 employees.

Those companies which are not part of these sectors but are in their value chain, or whose business depends mostly on these sectors, can also benefit from the exemptions.

Human Resources firm Randstand assesses very positively the joint agreement to extend Spain’s furlough schemes:

The economic and employment situation we are facing as a result of the Covid-19 certainly did not justify in any way that the furloughs by force majeure ended on September 30 and clearly needed an extension similar to that decided in other countries, where the agreements signed are longer term . Also, with the extension, the economy and the country will not be subjected every three months to the uncertainty that these negotiations represent.

We appreciate that the aid has been extended to all sectors. All are being affected across the board, to a greater or lesser extent, and that companies have very significant aid for contributions in the case of those workers who can not return to their normal activity.

Protection for discontinous permanent workers and part-time workers

At the same time, the preliminary agreement reached with the unions improves the protection for discontinuous permanent workers and part-time workers. They will receive 100% of the unemployment benefit with the limits set by law. The agreeement also maintains the ‘counter at zero’ in the benefits of the ERTE, which will continue to have an amount equivalent to 70% of the regulatory base even if they are paid for more than six months.

As on previous occasions, the pre-agreement also includes, the impossibility of laying off workers. In addition, there is a commitment to engage in negotiations to provide protection for temporary workers who have been affected by the ERTE and who have finally gone on strike.

The preliminary agreement comes just two days before the expiration of the current regulation, following several weeks of intense negotiations and exchange of documents and proposals.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.