Thousands of people are immersed in a File of Temporary Employment Regulation since last month of March 2020, the month in which the state of alarm was declared in our country and which led to a great economic-social crisis, not only at the national level but at the global level, putting thousands of businessmen and workers in check.
After more than a year immersed under the umbrella of a state of alarm, May 9 was coming to an end. Along with this long-awaited end of the state of alarm, in our sector, the labor lawyers We saw how concern about the future of the validity of the extension of the Records of Temporary Employment Regulation (ERTE).
Contrary to expectations, the Ministry of Labor confirmed that the end of the state of alarm did not affect the ERTE, maintaining these their validity until next May 31, as regulated in article 1 of Royal Decree-Law 2/2021, of January 26. However, once again, ERTEs have been extended until September 30 due to the recent negotiations established between the Government and the unions.
But the reality is that, despite the successive extensions, many companies have chosen or will choose to carry out an ERE, that is, a collective dismissal, instead of continuing under the ERTE umbrella.
After the legislative potpourri that we have suffered in labor matters, the questions that many clients still ask us are: What is the difference between ERTE and ERE? What implications does each figure carry? Can an ERE be carried out after having chosen to carry out an ERTE?
The main difference between the two files is the requirement of the temporality: while the ERTE are characterized by the suspension of the employment relationship or the reduction of the working day for a certain period of time, the ERE, also called “collective layoffs“, Imply the termination of employment relationship.
In addition, for there to be a collective dismissal as such, it has to affect a significant portion of the company’s workers; otherwise, we would be talking about common individual layoffs. Indeed, in the ERE figure, the number of workers must be taken into account provided that a period of 90 days the termination affects, at least,:
- Ten workers, in companies that employ less than one hundred workers.
- Ten percent of the number of workers in the company in those employing between one hundred and three hundred workers.
- Thirty workers in companies employing more than three hundred workers.
Another substantial difference is that collective dismissals, by implying the termination of the employment contract, carry the right to receive a compensation which will be negotiated with the workers’ representatives. Thus, the affected workers will receive a minimum compensation of twenty days’ salary per year of service with a maximum of twelve monthly payments.
However, on many occasions the economic situation of the company can be so unsustainable that it entails the need to request a bankruptcy. In this case, workers must go to the FOGASA to collect your compensation.
How should companies justify the decision to open an ERE?
The decision to terminate the employment relationship corresponds to the employer, who must duly justify his decision based on the following causes:
- ERE for economic reasons: it is understood that these causes concur when a negative economic situation emerges from the results of the company, that is, current or anticipated losses or persistent decrease in the level of income or sales.
- ERE for technical reasons: it takes place when there are changes in the scope of the means or instruments of production.
- ERE for organizational reasons: they concur when there are changes in the scope of the personnel’s systems and working methods or in the way of organizing production.
- ERE for production reasons: when there are changes in the demand for the products or services that the company intends to place on the market.
Can workers immersed in an ERTE be fired?
In principle, companies have the obligation to keep the worker in ERTE during six months after its extinction. However, this obligation is “relative”, because in the event of non-compliance, the only consequence would be to return the contributions to Social Security, if they had been enjoyed. This circumstance is translated as follows: the worker may challenge the dismissal within 20 days, requesting the nullity or inadmissibility of the dismissal.
This figure already played a leading role in another great past crisis: that of 2008, affecting an average of 100,000 workers. Years later, not as many as would be desirable, the coronavirus crisis anticipates a situation that will generate precedents, while thousands of workers immersed in an ERTE wait with uncertainty for the final result. The big question is, will all these suspensions turn into layoffs?
LABE Lawyers count with one Legal area and another labor that work together to offer comprehensive labor solutions to companies that operate both nationally and internationally. From this 360º firm, with headquarters at Paseo de la Castellana 30, it is warned of the need to have labor experts in case of carrying out any workforce restructuring operation.
Authors: Daniel Burón and Vanesa Paredes, lawyers at LABE Abogados