Spain has the second largest coronavirus outbreak in Europe after Italy. For that reason the Spanish Authorities have put in place a series of measures to limit the spread of the virus and they declared the state of emergency (estado de alarma) under the shelter of the Article 116.2 of the Spanish Constitution. The state of emergency means that people are banned from going outside except to buy food, go to work, or get medical assistance.
One of the measures taken by the Spanish Government has been allow the companies the streamlining of temporary dismissal files (known as ERTE).
An ERTE is a temporary employment regulation which enables companies to make suspensions within employment contracts or reduce their working hours due to force majure. This procedure can be applied to partial areas of the workplace or its entirety.
In this situation workers will be still be a part of this company and listed with them on their Social Security, however they would not be able to receive their salary.
Unemployment benefits in these circumstances will be 70% of the original payment and will accounted for within future benefits, as this is a temporary suspension and not an opportunity for compensation.
The employer has to communicate the ERTE to the Labour Authorities in the Regional Government. The employee does not need to do anything at all. Labour authorities will then approve or disapprove the ERTE and analyse the special circumstances. The state of emergency for coronavirus pandemic is the force majure reason.
When the force majure (in this case is the coronavirus pandemic), finishes, then the company can begin to suspend the ERTE and start reincorporating its workforce.
In a very pessimistic scenario, the company could even suspend this activity and conduct a collective dismissal.
José María Alonso Martín
Abogado – Lawyer
