October 1, 2020

a more sectoral extension and changes in unemployment protection

Key week in the negotiation of the ERTE extension beyond September. The Government, the unions and the employers’ associations have met again this Tuesday to discuss how the new extension of the temporary employment regulation files caused by the coronavirus crisis will be, a negotiation that becomes a little more complicated with each extension . The three parties agree that the ERTEs should be maintained, but the accents differ on how, especially in the way of distributing public resources to support this mechanism of ‘hibernation’ of employment that was launched in March.

More than half a million unemployed await help for the unemployed who have exhausted their benefit in the pandemic: "We can't anymore"

More than half a million unemployed await aid for the unemployed who have exhausted their benefit in the pandemic: “We cannot take any more”

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The Executive and the social agents intend to close a new agreement on this issue throughout the week. They will try not to run out of deadlines this time and thus give more certainty to companies and workers. From the maximum of 3.4 million employees who came to be covered by ERTE, currently there are just over 700,000, of which 600,000 are in files due to force majeure and about 130,000, in ERTE for objective reasons (the so-called ETOP ). This Tuesday morning, the parties have met again after the meeting on Monday, with the provision of daily meetings to try to reach a consensus as soon as possible.

Next, we collect some of the most important keys in the third extension of the ERTE.

Even when

The initial proposal of the Government to the social agents includes expanding the ERTE for another three months, until the end of the year. However, yesterday the Minister of Labor, Yolanda Díaz, pointed out that perhaps the date was not “adequate” and opted to bring the horizon a little further ahead so that it would not condition the Christmas campaign. The Minister of Inclusion, Social Security and Migrations, José Luis Escrivá, explained for his part this Monday that the intention of the Executive is to maintain the ERTE as long as they are necessary, but that the quarterly review allows adapting the tool to the circumstances of each moment given the uncertainty of this crisis.

The social agents, and especially the businessmen, demand a broad horizon of extension in the ERTEs to give security to the companies that are going through more difficulties about the support they will have in the coming months and that they can organize themselves.

Unemployment benefit

The protection of workers affected by ERTE is of particular concern to unions. Two issues are debated. On the one hand, extend the benefit of people who have been in ERTE for more than six months, given that currently after 180 days the amount is reduced from 70% of the regulatory base to 50%. The Ministry of Labor is inclined to keep that amount at 70%, which would exempt that reduction that does apply to unemployed people.

On the other hand, Work has proposed to put an end to the so-called ‘counter to zero’ as of October, by which ERTE employees have received unemployment benefit at this time without consuming their right to collect unemployment in the future, of so that the State replenishes these workers these months of contributions. The measure has been applied in an extraordinary way for employees at ERTE, while unemployed people have been consuming their right to benefits.

ERTE more sectoral

This may be the biggest stumbling block in the negotiation and in which the parties have to tread the finest. The Government insists on the need to differentiate or sectoralize state support for ERTEs due to coronavirus after the first months of the pandemic, so that more public resources are focused on the sectors and activities that are directly limited by the virus and that will continue being so in the next few months. Yolanda Díaz mentioned yesterday as an example tourism, but also culture and transport.

With this approach, the Executive seeks to keep viable companies afloat but that cannot develop their activity directly due to the restrictions caused by the coronavirus, whether they are national or international limitations, while the support for companies that They continue in ERTE because they are going through difficulties, but they are no longer so directly connected with the restrictions linked to COVID. The Bank of Spain has warned of the danger of supporting with public funds for a long time employment in ‘zombie’ companies, which will not survive in the future, instead of redirecting those resources to policies that redirect the future employment of workers.

The Government reiterates that it would not be a totally sectoral approach, since it proposes to maintain ERTEs for regrowth for all activities, so that any company that was affected by restrictions due to the pandemic would have the right to apply one of these expedients. For example, in a municipality or territory in which prevention measures against the virus were regressed and in a company that had to suspend activity due to infections.

Unions and employers oppose this sectoral division of the ERTEs, because they fear that companies that are apparently not limited by the pandemic, but that are indirectly limited, will be left out. The unions usually illustrate this with the example of a supermarket in a tourist area such as the Balearic Islands, which runs out of customers although its activity does not belong strictly to the tourism sector.

The limitation to dismiss

The initial Labor proposal contemplates maintaining the prohibition of dismissal for objective causes linked to the pandemic until the end of the year, something that employers oppose. The Government prohibited dismissals for objective reasons, those with 20 days of compensation per year worked, motivated by the coronavirus, so that they are not “justified” legally. If they occur, they are considered unfair dismissals, which increases the compensation received by those affected, or even null. The justification for the measure so far is that the Executive has provided an alternative to layoffs, ERTE, which gives flexibility to companies without resorting to job destruction.

Exemptions from Social Security contributions

At the meeting on Tuesday, the parties began to present proposals on the exemptions of workers’ quotas directed at companies in ERTE. Savings in social contributions have been reduced since the start of the pandemic, with a differentiated system in the last extension of September depending on the number of workers in the company, as well as the type of ERTE (total or partial force majeure, ETOP or regrowth) and if the companies activated employees or kept them in the ERTE.

Beyond defining what percentage of contributions companies can continue to save in ERTE, unions and employers reiterate to Minister José Luis Escrivá to vary the system implemented on activated workers and those who remain suspended. The head of Social Security insists that exempting more the number of employees who return to work encourages companies to ‘disinhibit’ workers, while social agents ensure that companies really activate workers if there is demand, not for this help, and that resources should be redirected to companies with more difficulties, which cannot remove their employees from the ERTE.

Help for discontinuous fixed

In the extension of the ERTE, an extraordinary benefit is also discussed for discontinuous permanent workers, very numerous in the tourism sector, who at the end of the season of their activity are left without a job and do not have the minimum contribution to access the unemployment benefit . At the moment it is proposed that the aid be extended until the end of the year, although the date is not closed, according to social dialogue sources.

The unions have also demanded that a benefit for temporary workers without the right to unemployment benefit be addressed and that the Government approve now aid for unemployed people during these months who have exhausted their benefit. The Ministry of Labor began negotiating the subsidy before the August break and it seemed that it was going to be approved shortly, but for the moment the aid is not going ahead. Government calculations indicated that some 550,000 unemployed people had exhausted their benefits between March and September.


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