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What is ERTE in Spain?

What you need to know about losing your job during Spain’s coronavirus crisis

MIAMI, Fla. (21-April 2020) —

During the current coronavirus crisis, many companies are being forced to make employees temporarily redundant, most likely because their businesses couldn’t operate under the lockdown.

This obviously applies to many types of businesses beyond football, but since many of you may have read about teams resorting to this process, here is a brief explanation. Time for a couple of disclaimers: First, nothing herein is to be construed as legal adivce, and no attorney-client relationship can attach as a result of reading this article. As always, if you have a particular question, it is wise to seek specific legal advice.

What is the ERTE?

In Spain, there is a process in place called the expediente de regulación temporal de empleo (“ERTE”) which allows companies to temporarily layoff (issue temporary redundancy to) its workforce as a result of a force majeure which in this case is the coronavirus pandemic.

Force majeure is a legal term of art adopted from French (also known as cas fortuit (French) or casus fortuitus (Latin), which translates to a “superior force.” In legal parlance, it means unforeseeable circumstances that prevent a party to a contract from fulfilling a contract, and thus the party is excused from completing its side of the bargained-for exchange.

Explaining the expediente de regulación temporal de empleo (“ERTE”) 

Thus, the ERTE is a regulation that effectively suspends the contract of a worker – or reduces his or her working hours – for as long as is deemed necessary during the crisis. Keep in mind that it is the norm for employees to have an employment contract in Europe, and Spain is no different. This is quite the opposite of much harsher American labour laws where employment is classified to be “at will” in the majority of cases and thus contractual rights do not attach to one’s job.

What is the advantage to the employer?

The advantages for companies is the money saved by not paying salaries, or, in cases where the hours of employees are reduced, only paying partial wages, and no or only part of the social security contributions.

What does it entitle you to?

Under the ERTE, workers are still technically employed by the company which still pays their social security contributions but does not have to pay their salary. Instead, the ERTE enables those who are entitled to it to claim unemployment benefits – which will be up to 70 percent of their original salaries. The benefits received are referred to as “paro.” The ERTE covers situations where an employee’s hours have been reduced, not just in cases where there has been a complete layoff (temporary redundancy).

When the period covered by the ERTE expires, the workers then resume their roles pursuant to the same contract and subject to the same conditions.

How does a worker in Spain obtain an ERTE?

The company elects to proceed with ERTE and employees are notified that the process is being enacted. A worker will therefore not need to do anything about it. The company is legally obliged to apply to the labour authorities within 5 days, who, in turn, will then authorize the process and assess whether unemployment benefits are owed.

Are temporary contracts included in the ERTE regulation?

Under normal circumstances, in many cases it wouldn’t be worthwhile for an employer, but under the special COVID-19 ERTE regulation, legally valid temporary contracts will be suspended during the time the ERTE is valid for. Once the State of Alarm has been lifted, employees can work out the remainder of their contracts.

What if an employee can work from home?

Employers are responsible for making sure to only apply for an ERTE for an employee who cannot come in to work or who has had wages reduced. Thus, an employer who applies for a special Force Majeure ERTE when there was no need (e.g. if employees could have worked from home) will risk being charged with an administrative offence, that may have penal consequences as well.

Anonymous reports concerning abuses can be made with the Labour Inspection, the local police or the Guardia Civil. 

When will it end?

The ERTE can be called off when matter that gave rise to its enactment has passed. Here, we are talking about when the coronavirus crisis is over, lockdowns are lifted and business tries to resume as before. The ERTE period for the current crisis will extend for the same time as the Estado de Alarma (State of Alarm) that was declared in Spain.

If a company is unable to survive the economic damages inflicted by the pandemic and goes under, the ERTE can be turned into an ERE – collective dismissal.  

Useful links:

From the Citizens Advice Bureau: One of the main objectives of Royal Decree-Law 8/2020 (the one that announced ERTE regulations and ‘paro’ for Autonomos), which was passed by the Spanish congress on 28 March 2020, was to establish mechanisms to ensure that contracts were maintained during the health crisis situation. To reinforce it, they have now established a rule that the termination of contracts or dismissals for reasons related to the Covid-19 will not be justified.

For more info visit the Citizens Advice Bureau Spain 

Logo Ministerio SEPE

Spain’s Servicio Público de Empleo Estatal (“SEPE”) is an autonomous body attached to the Ministerio de Trabajo, Migraciones y Seguridad Social (Ministry of Labour, Migration and Social Security.) SEPE, together with the Public Employment Services of the Autonomous Communities, forms the National Employment System. SEPE promotes, designs and develops meansure and actions concerning employment. SEPE is decentralised, adjusted to the different territorial realities

SEPE has published a notice on exceptional measures introduced during the COVID-19 crisis. It can be found here.

For Employers:

Solicitud colectiva de prestaciones por desempleo por suspensión o reducción de jornada a consecuencia del COVID-19

Puedes encontrar aquí la hoja informativa y la plantilla para la solicitud, de forma colectiva por la empresa, de las prestaciones por desempleo por suspensión o reducción de jornada consecuencia del COVID-19

Los trabajadores afectados por un ERTE de este tipo no tienen que realizar ningún trámite para solicitar las prestaciones por desempleo ante el Servicio Público de Empleo Estatal (SEPE).

La solicitud la presentará la empresa en nombre de todos los trabajadores afectados por la medida.

Cover Photo: Plaça de Sant Jaume, 1, 08002 Barcelona, Spain, Ajuntament de Barcelona (Barcelona City Hall) | Photo: Kenneth Russo

By Ken Russo

While my background is in the legal industry, the skills acquired and fine-tuned in law practice are now applied to focus on the sport of football. Russo Soccer aims to inform, educate and engage on news and relevant issues in the game.

Um advogado por formação, concentro meu trabalho nos negócios, comunicações e operações de equipes no futebol mundial. | Abogado con fundación avanzada en comunicaciones, enfocado en los negocios del fútbol y las comunicaciones. | Je suis un avocat experimenté dans les affaires de football.