R.D.-Law 18/2020: Measures related to Temporary Employment Regulation Files

Yesterday the Royal Decree-Law 18/2020, of the 12^th of May, on social measures in defence of employment was published in the BOE. This Royal Decree-Law addresses the expected expansion of ERTEs due to a greater cause that was being demanded by different sectors. In line with previous publications, we will focus on the most outstanding measures that affect the processing of ERTE:

-        ERTE validity extension causes force majeure until the 30^th of June.

Regarding the companies that have applied to their ERTE templates due to force majeure, it is established that said measure will continue in force for the duration of the cause that gives rise to that force majeure, with a maximum date of the 30^th of June 2020. It is, in other words, the ERTE due to force majeure may extend it until the 30^th of June, regardless of whether the Alarm State is lifted before that date. This avoids the uncertainty that had been generated regarding its duration.

Besides, the concept of partial force majeure derived from the COVID19 is introduced. This concept applies to those companies that have an ERTE in force due to force majeure, but that can partially resume their activity during May and June. As an example, a restaurant or shop that can open with the limitations of the de-escalation phase and, for this reason, does not need the entire workforce.

These companies can gradually reincorporate people affected by ERTE, depending on their needs.

In these cases, the Social Security contribution bonus system changes, applying as follows:

FOR WORKERS WHO RETURN TO ACTIVITY:

A)    Companies with less than 50 workers:

May: 85% exemption.

June: 70% exemption.

B)    Companies with more than 50 workers:

May: 60% exemption.

June: 45% exemption.

FOR WORKERS WHO REMAIN IN THE ERTE:

A)    Companies with less than 50 workers:

May: 60% exemption.

June: 45% exemption.

B)    Companies with more than 50 workers:

May: 45% exemption.

June: 30% exemption.

As can be seen in the percentages, the Government wants to give priority to the companies that reincorporate more workers to the activity. It must be emphasized that this new system is only applicable when there is a partial resumption of activity.

-        Relaxation of the procedure to approve a second ERTE, after the completion of the ERTE due to force majeure.

The Decree regulates the way of processing a temporary employment regulation file for economic, technical, organisational and production reasons, which is linked to that of FORCE MAJEURE. Many companies find that need since it is possible that from the 1^st of July, they will not be able to resume 100% their activity. Therefore, they need a second ERTE, immediately after the force majeure.

The novelties to make them more flexible are the following:

-        Quick and simplified procedural measures approved by Decree 8/2020 are applied to them, which speed up and facilitate their approval.

-        You can start processing even if the ERTE is due to force majeure. In this way, there will be no time gap between the first and second ERTE without measures in force. Therefore, they can start to process now to have them approved by the 1^st of July.

-        If the process begins after the 30^th of June, the effects of the approval will go back to the end date of the first ERTE. As in the previous point, it is about there not being a space between the two ERTES without labour measures in force.

In short, these measures may be a help for those companies where the drop-in activity is going to continue over time, beyond the 30^th of June, due to restrictions of all kinds that will persist. They will be especially useful for the hospitality and tourism sector, since a large part of these companies must link the two ERTEs, to guarantee the viability of the business in the medium and long term.