ERE, Temporary ERTE. Suspension of employment contract due to the Coronavirus.

ERTE? ERE? SUSPENSION OF CONTRACTS?
CORONAVIRUS? WHAT TO DO?
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I.- OCCUPATIONAL ALTERNATIVES TO CORONAVIRUS OR COVID 19

There are several possibilities. The so-called TEMPORARY ERTE due to:

a) Cause of Force Majeure:

Due to the existence of temporary force majeure, the employer may decide to suspend employment contracts or reduce working hours. We consider COVID or CORONAVIRUS, which makes it impossible to provide services, to be one of the possible causes.

Force majeure is unique in that it consists of an occurrence outside the company circle, independent of the employer's will with regard to the consequences it entails in terms of the provision of work, there being a disconnection between the damaging event and the company's area of action.

Suspension due to force majeure does not require the concurrence of an additional cause, such as the company being in a situation of crisis, and it is not necessary to know the prosperous or adverse situation of the company.

As in the case of permanent force majeure, temporary force majeure as a cause for suspension of employment contracts requires a procedural requirement, which is that it must be previously confirmed by the labour authority in an employment regulation file, regardless of the number of workers affected.

The periods taken into account for the recognition of unemployment benefits in cases of suspension of the contract or temporary reduction of working hours that are directly caused by exceptional circumstances arising from catastrophic events may be used again for the recognition of a future benefit. In these cases, the SEPE may authorise that the time during which unemployment benefits are received is not counted for the purposes of using up the maximum periods of receipt established. Likewise, in these cases, workers who do not have the necessary contribution periods to be entitled to unemployment benefits may be authorised to receive them.

b) Economic, technical or organisational reasons..:

The company may unilaterally suspend the employment contracts of all or part of its staff based on economic, technical, organisational or production causes with no other requirement than that of following the specific procedure established for the adoption of this measure, to which it must be subject in all cases, i.e. regardless of the size of the workforce and the number of employees affected, without the need for any threshold to be exceeded, unlike what happens in the area of collective dismissal.

As both the suspension of contracts and the reduction of working hours are temporary flexibility measures, the reasons justifying them must be of a temporary nature, so that these measures are not suitable for resolving situations of a structural nature.

No maximum time limit is set for the application of the suspension period, the duration of which must be appropriate to the situation that determines it. It is possible to apply successive ERTES if the reasons for the measure and its temporary nature persist.

II.- Effects of the Suspension of Social Security Contracts:

During the suspension of the contract for economic, technical, organisational or production reasons, or due to force majeure, the company must keep the worker registered and pay the employer's contribution and the managing body must pay the worker's contribution.

II.- Worker's situation during suspension

Workers are in a legal situation of unemployment when their employment relationship is temporarily suspended, or the ordinary daily working day is temporarily reduced by decision of the employer for economic, technical, organisational or production reasons or due to force majeure, or by virtue of a judicial decision adopted in the context of bankruptcy proceedings. And the employer must promote the development of training actions linked to their professional activity, with the aim of increasing their versatility or increasing their employability.

IV.- Procedure

Depending on whether the case is processed due to "force majeure" or due to "economic, technical or organisational reasons", the procedure is different. In the first case it is more accelerated.

Basically, it is necessary to inform the workers' representatives, the labour authority, of the existence of the cause, accompanied by a report and different documentation of a labour nature, the details of which can be extensive.

V.- Who to turn to

G.Elias y Muñoz Abogados has a department of Labour Lawyers who can help you in the ERTE, ERE OR TEMPORARY SUSPENSION OF CONTRACTS as a consequence of the Coronavirus.

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