Coronaviurs: What’s an “ERTE” and how it works?

By 23/03/2020March 24th, 2020Uncategorized

The temporary employment regulation files (ERTE, for its acronym in Spanish) have taken on an overwhelming role in recent days. By softening the conditions they’ve become one of the main measures of the Government to face the impact of Coronavirus at the business level. We explain what an ERTE is and how it works.

What is a Temporary Employment Regulation File (ERTE)?

It is the procedure that companies must carry out when, as a consequence of economic, technical, organizational or production causes, they have to temporarily suspend all or part of their activity, with the consequent suspension of employment contracts or temporary reduction of working hours.

The scope and duration of measures for contracts’ suspension or reduction of working hours will be adapted to the situation that is intended to be overcome, in this case the situation derived from COVID-19.

As it is a temporary measure, the company will not have to pay compensation to the affected workers, without prejudice to their right to receive the corresponding unemployment benefits.

What is the procedure for the processing of an ERTE due to force majeure derived from the COVID-19?

The procedure for processing ERTEs has been streamlined, so that workers can receive unemployment benefits as soon as possible.

The company will submit an application to the competent labor authority, which will be accompanied by a report justifying the loss of activity as a consequence of COVID-19, as well as, where appropriate, the corresponding supporting documentation.

Likewise, the company must communicate the ERTE request to the workers and, if any, to the union representation.

The labor authority must check the force majeure as a motivating cause for the suspension of contracts or the reduction in working hours requested, and will issue the declaratory resolution of the existence or not of force majeure within five days from the presentation of the request. Only in those cases in which the labor authority considers it necessary it will request a report from the Labor and Social Security Inspection.

The company will communicate to the workers the measures adopted to suspend the contracts or reduce the working hours. These measures take effect from the date of communication. After it, a a resolution of the labor authority should bereceived recognizing the situation of force majeure.

After this communication, the workers will be able to access to the unemployment benefit. They do not have to do anything, the company will do it directly with SEPE.

Can an ERTE be presented due to force majeure gruping measures to suspend the contract and reduce working hours?

Yes, they can be presented in both ways and for the people that are necessary, it is not necessary that it includes all the company0s workers.

If I don’t know when the company will be able to resume the activity, what is the final date that I have to set in the presentation document?

Logically, if the ERTE is derived from the coronavirus, the duration of the ERTE must be the same as that of the Alarm State, including its possible extensions.

Do I have to terminate contracts at Social Security?

During the ERTE, workers will not be fired and unregistered from Social Security, regardless of the fact that the company may be exempt from paying Social Security contributions, in accordance with the provisions of Royal Decree Law 8/2020 of March 17 on extraordinary urgent measures in order to face the economic and social impact of COVID-19.

During the period established in the ERTE, the company must pay compensation or Social Security fees to its workers?

During the period set in the ERTE, the company must not pay compensation to the workers affected by the suspension. Likewise, in the event that the ERTE contemplates the reduction of working hours, the company will only pay the proportional part corresponding to the working day.

Regarding Social Security quotas and, exclusively for cases of force majeure motivated by COVID-19, and while the period of suspension of contracts or reduction of working hours lasts, the General Treasury of Social Security exempts the company of the payment of business fees, as well as of the fees for concepts of joint collection if the company had less than 50 workers registered in Social Security by the end of February.

What if my company was closed when the State of Alarm begun and I cannot get my workers to sign any acknowledgment that I have communicated the presentation of the ERTE?

In this case, the presentation of any document that proves that the company has made this communication will be sufficient, such as an email, even if the reception is not signed by the workers.

Will the ERTE include workers who are temporarily disabled?

Yes, because they will go on to collect unemployment benefits when their temporary disability situation ends. This point should be reflected in the relationship of workers affected by the ERTE.

What effects does ERTE have on working people?

Workers affected by the ERTE will be entitled to the recognition of unemployment benefit, even if they do not have the minimum period of paid employment necessary for it.

In these cases, the period in which the unemployment benefit is received under the ERTE will not count for the purposes of consuming the legally established maximum benefit periods.

In order to facilitate the processing of benefits, the State Public Employment Service is working on the regulation of a procedure that allows the processing of unemployment without the need to submit an individual application. For this reason, the workers affected by the ERTE, for the moment, should not submit any request, until the procedures are reported in the coming days.

How is ERTE done for major cause?

There is a previous step that is the communication to the workers of the application of the ERTE, either of suspension or reduction of working hours. Once this procedure is done, a report and different documents are prepared and presented to the competent authority.

The competent authority (central or regional) has 5 days to respond to the request. In the event that it does not do so, the administrative silence will be considered positive, that is, the acceptance of the ERTE due to force majeure.

After the regulatory deadline, the reduction in working hours must be communicated to the General Treasury of Social Security through ERTE. It will be when the justification is sent to the employees, so that they have proof of their new situation. From there:

  • Communication in the State Public Employment Service (SEPE) of the ERTE due to shorter working hours for employees
  • Communication of the registration as jobseekers of the workers affected by the ERTE. Workers do not have to make an appointment with SEPE, since the management of their benefit will be processed between the company and SEPE. The protocol is not yet established.
  • Communication in the administration of the periods of activity of the workers affected by the ERTE
  • Completion or renewal of the ERTE depends on the circumstances

In case you need more information about it, we are at your entire disposal through the usual channels.