Royal Decree 24/2020: Measures in the workplace

This Saturday, June 27, the Royal Decree-Law 24/2020, of June 26, on social measures to reactivate employment and protect self-employment and competitiveness in the industrial sector was published in the Official State Gazette. In this Royal Decree Law, the expected second expansion of the ERTE is addressed due to a greater cause that both unions and employers demanded. In line with previous publications, we will focus on the most outstanding measures that affect the workplace. 

- Extension of the validity of the ERTE´s due to force majeure

Regarding the companies that have applied ERTE´s to their staff due to force majeure, regulated in article 22 of Royal Decree-Law 8/2020, it is established that said measure may continue in force until September 30th 2020.

This extension also supposes an extension in the discounts in the Social Security payments, which as of July 1st are configured as follows:

- In companies with less than 50 workers, exemption of 60% in July, August and September for active workers; and a 35% exemption in July, August and September for inactive workers. 

- In companies with 50 or more workers, a 40% exemption in July, August and September for active workers; and 25% exemption in July, August and September for inactive workers.  

It also establishes the obligation of the company to reincorporate workers affected by the ERTE to the extent necessary for the development of its activity, prioritizing the adjustments in terms of reduction of working hours. Having the company the obligation to communicate to the SEPE all the variations that are produced.

In addition, an express prohibition is introduced to carry out overtime, to outsource activity or to make new contracts, except, when the company cannot, due to training, or other objectives and justified reasons, carry out the functions entrusted to them, always informing the representation of workers in the company.

- ERTE for economic, technical, organizational and production reasons.

This Royal Decree Law includes again the possibility that companies that are currently applying an ERTE due to force majeure, may begin to process a temporary employment regulation file for economic, technical, organizational and production reasons. This new measure will take effect from the end date of the ERTE due to major causes. 

Article 23 of Royal Decree-Law 8/2020 of 17th March, which established a faster and simplified approval procedure for these ERTEs, will apply to these new temporary employment regulation files, provided they submit the new file before 30th September.

The same social security quota discounts apply to these new files as in ERTEs due to force majeure, until 30th September:

- In companies with less than 50 workers, exemption of 60% in July, August and September for active workers; and a 35% exemption in July, August and September for inactive workers.

- In companies with 50 or more workers, a 40% exemption in July, August and September for active workers; and 25% exemption in July, August and September for inactive workers.  

If the company uses these bonuses, the firing restrictions will apply to it during the six months after the end of the measure. Therefore, this decision will have to be evaluated with special care, since the saving of three months of contributions, in the percentages mentioned, entails an important limitation for making layoffs. Another option is to do the ERTE without using the bonuses, to avoid the application of said prohibition.

Likewise, for these ERTE there is also an express prohibition to carry out overtime, outsource activity or make new contracts, except, when the company cannot, due to training or other objective and justified reasons, carry out the functions entrusted to them, always informing the representation of the workers in the company.

The non-consumption of unemployment benefits for workers in ERTE is also maintained until 30th September  2020. 

In conclusion, from our point of view we understand that, in general terms, the modifications are positive for the reactivation of the labor market. We must highlight the positive aspects of the flexibility given to companies to decide whether to keep the ERTE until September due to Force Majeure and to start a new ERTE for technical, productive and organizational economic reasons after that date. Likewise, bonuses on Social Security payments are a great help for companies. On the contrary, we believe that the dismissal ban is a drag on the companies after the completion of the ERTE, which can lead to numerous problems, with each company having to assess whether to prefers the exemption of quotas or the flexibility in the  dismissal. 

From Balms Abogados we remain at your disposal to resolve any question that may arise regarding the application of these new measures approved by our Government.