Labour rights in an ERTE situation

The COVID-19 pandemic is creating a global health emergency. The health crisis is affecting productive activity as well as demand and the well-being of citizens. As a consequence of Covid-19, many questions are currently being asked about the Temporary Redundancy Programmes (ERTE). We answer some of the most frequently asked questions these days.

What is an ERTE?

It is a temporary suspension of contracts, never implying the termination of the employment relationship, which is resumed once the cause that motivates it has ended. Given that the current case is the Coronovirus, once it is extinguished, the ERTE must also end.

Can unemployment benefits be collected during an ERTE?

Yes, unemployment can be collected during the suspension. The law establishes minimum contribution requirements, but the Government, in order to address the economic and social impact of COVID-19, has announced that in an ERTE caused by the Coronavirus crisis, "... workers will exceptionally be entitled to contributory unemployment benefits, even if they do not meet the prior contribution requirement" (Royal Decree-Law 8/2020, 17 March, extraordinary urgent measures). (Royal Decree-Law 8/2020, of 17 March, on extraordinary urgent measures).

What is the amount of the benefit?

The amount of the benefit will be 70% of the regulatory base for the first six months, and 50% from the seventh month onwards.

What is the base to be taken into account for calculating the benefit?

The regulatory base on which this percentage is calculated will be the result of calculating the average of the bases of the last 180 days of contributions or, failing that, of the period immediately prior to the legal situation of unemployment, worked under the employment relationship affected by the extraordinary circumstances that have directly caused the suspension of the contract or the reduction in the working day.

During the period of an ERTE, are contributions paid for the workers?

Yes, the ERTE period is considered a contributory period.

In order to receive unemployment benefits, do I have to carry out the corresponding procedures at the State Public Employment Service (SEPE)?

Yes, the benefit is applied for individually at the SEPE, and must be applied for telematically (by appointment). However, in the Community of Madrid, according to the instructions regarding the services provided by the employment offices of the Community of Madrid after the declaration of the state of alarm, it is stated that:

"Registrations of workers affected by ERTE applications: Workers affected by temporary company adjustment plans (ERTE) shall not carry out any formalities in relation to their registration in the employment application. The Directorate General of Labour of the Community of Madrid will send the list of affected workers (including ERTEs affecting fewer than 50 workers) to the Directorate General of the Public Employment Service, which will automatically process the registration of the employment application and send it to the worker, preferably by telematic means. Therefore, it will not be necessary for workers to go to their employment office". It is to be expected that instructions along the same lines will be issued at state level.

Do I have a deadline to submit my application?

The deadline for submitting an application for unemployment benefits is 15 working days, but the submission of applications for initial registration or resumption of unemployment benefit and unemployment benefit outside the legally established deadlines will not mean that the duration of entitlement to the corresponding benefit will be reduced. This is an extraordinary measure to deal with the impact of COVID-19.

How does the unemployment benefit used up during an ERTE count? Can I get it back?

Through Royal Decree-Law 8/2020, of 17 March, on urgent extraordinary measures, it has been decided "not to calculate the time in which the contributory level unemployment benefit is received that has its immediate cause in the aforementioned extraordinary circumstances, for the purposes of consuming the maximum periods of receipt established".

Do I accrue holiday during the period of a suspension ERTE and during a reduction ERTE?

No, holidays are not accrued during the suspension period, however, during a reduction ERTE, they are; and the salary received during the same period will be in proportion to the reduction in working hours.

What happens to the extra payments in the ERTE of suspension and in an ERTE of reduction?

In a legal situation of unemployment, the extra payments are not accrued as they are included in the Contribution Base to be taken into account for the calculation of the benefit. In the case of suspension of the contract, they are not accrued. In the event of a reduction in working hours, the extra payments will be reduced in the same proportion as the reduction in working hours.

Am I entitled to any type of compensation if I am subject to an ERTE due to Coronavirus?

No, no compensation is due for ERTE due to Coronavirus, as the employment relationship is not terminated, but suspended.

What happens if I am on sick leave/temporary incapacity during the ERTE?

Given that the employment relationship is already suspended, the worker would continue to be on sick leave and when he/she is discharged, he/she would be affected by the ERTE and would receive the relevant benefit.

What happens if I am on parental leave and can I be included if I am on maternity or paternity leave?

With regard to a situation of incidence, if the worker's return to the company coincides with the period of suspension, he/she will be affected by the ERTE. During the situation of the birth of a child, the employment relationship is suspended and, therefore, the worker cannot be included in a suspension ERTE, but he/she can be included when he/she is discharged. Finally, if the worker is on a reduced working day due to legal guardianship, he/she can be included in the ERTE.

Do I lose pension rights as a result of an ERTE?

No, given that the contributions are maintained, a priori, you do not lose any type of right with regard to a possible permanent disability or retirement.

How long can an ERTE last? If the Coronavirus situation is prolonged, for how long can an ERTE be established?

The law does not establish any minimum or maximum period and, in fact, it is possible to chain several cases as long as the legal requirements are met. Therefore, if the Coronavirus situation is prolonged, the ERTE could last until that moment. However, once it is over, the company is obliged to reincorporate the worker to his/her position with the same conditions that he/she had before its application.