Additional measures taken by Spanish government towards ERTE procedures. It contains information about the six-month preservation of job positions obligation for employees affected by this procedure, the different possibilities of employment contract termination in different scenarios and the compensation payable in each case, and the future possibility of Spanish Authorities enabling companies to make dismissals based in economic, technical or productive reasons
Among the numerous measures taken by Spanish government to face the Covid-19, the call of the State of Alarm was considered as a force majeure event in which millions of ERTE procedures were based.
The suspension of the labour contracts, which enabled companies to suspend the payment of salary (as SEPE took care of it while the force majeure event took place), came together with the undertaking of the Company to preserve the employee´s affected by the ERTE procedure job positions for a 6 month term after the withdrawal of the State of Alarm.
This particular point, introduced by the Real Decreto 8/2020 becomes a big burden at the time of planning dismissals, but does not constitute a prohibition.
On one hand, it is true that it does not look feasible that Spanish labour authorities will consider any fair dismissal valid among those employees that were included in an ERTE procedure within a six-month period after their reintegration in the Company if based in economic, technical or productive reasons.
The consideration of the dismissal as unfair will obligate the company to pay for the full amount of social insurance paid by the State for the employee while he was affected by the ERTE and the compensation payable to the employee will be calculated on the basis of 33 days per year of service (from 12 February onward, as it backwards it will be 45 days per year of service) with a maximum of 24 monthly payments.
On the other hand, if the Company is willing to re-adjust their workforce and proceed to make dismissals, other reasons than economic, technical or productive included within objective causes (incompetence of the employee, employee not adapting to modifications of the job position or persistent work absenteeism) might be the basis for such.
It is also a matter of interest that, on 11 May, Spanish Government, Worker´s Union (CCOO, UGT) and Business Association (CEOE and Cepyme) signed an agreement which will soon be reflected as a new Real Decreto Ley, that enabled companies to make dismissals based on economic, technical or productive reasons considering such as fair dismissals in case there is a reasonable evidence which suggests the Company going bankruptcy. Note that, in this case, the compensation payable to the employee will be 20 days per year of service with a top amount of 12 monthly payments.