What is an ERTE?
ERTE is the acronym that stands for Temporary Employment Regulation File.
An ERTE is not a dismissal, but a temporary suspension of employment of part or all of the staff, during the time the activity is considered stopped.
An ERTE is different from an ERE, since an ERE implies that the dismissal of the worker is effective and firm.
Although both are measures that can be used by companies in exceptional situations, both must always be carried out under justified reasons and in an appropriate manner.
Which regulations are applied?
The ERTE are regulated by articles 45, 47 and 51 of Royal Legislative Decree 1/1995, of 24 March, which approves the revised text of the Workers’ Statute Law.
Specifically, article 47 of the Workers’ Statute refers to the ERTE, stating that “The employer may suspend the employment contract for economic, technical or organizational reasons (…) Economic causes are understood to exist when the company’s results show a negative economic situation, in cases such as the existence of current or anticipated losses, or the persistent decrease in its ordinary income or sales. In any case, the decrease is understood to be persistent if during two consecutive quarters the level of ordinary income or sales of each quarter is lower than that recorded in the same quarter of the previous year.
On the other hand, technical causes are understood to be “when there are changes, among others, in the scope of the means or instruments of production; organizational causes when there are changes, among others, in the scope of the systems and methods of work of the personnel or in the way of organizing the production and productive causes when there are changes, among others, in the demand for the products or services that the company intends to place on the market”.
How long does the procedure take?
It is a quick procedure, as it is processed within 5 days, and it has retroactive effects.
How long does an ERTE last?
It usually depends on the circumstances. However, if the ERTE is caused by the global COVID 19 pandemic, it will last as long as the State of Alarm is extended.
Our comment: It is easy to understand that the problems created by the pandemic COVID 19 can certainly exceed the time of the State of Alarm. This will be a question to be explained to the Court in case is necessary.
What is considered force majeure?
First of all, it should be noted that the Official State Bulletin indicates that “The existence of force majeure (…) must be verified by the labor authority, regardless of the number of workers affected”.
However, force majeure is understood to mean “Loss of activity as a result of Covid-19 and the state of alarm, involving the suspension or cancellation of activities, closure of premises with a public influx, restrictions on the transport and mobility of people and/or goods, lack of supplies that prevent the continuation of the activity, or in urgent and extraordinary situations due to falling sick of the workforce or the adoption of preventive isolation measures”,
How much does a worker affected by an ERTE be paid?
Workers will be paid 70% of the Contribution Base, taking into account the last 180 days of contributions (or a lower number of days, if the worker has not been with the company for 180 days)
Some type of complementary salary can also be agreed with the company.
How could an ERTE be claimed?
If the worker affected by an ERTE considers that it should be questioned, he has a period of 20 working days from the notification from the company.
After that, the judge must assess whether the ERTE has been carried out in accordance with the corresponding legislation. If the judge decides that the ERTE is not valid, “the workers must be reinstated in their previous conditions, and the company must pay the unpaid salary differences due to the suspension or reduction of the working day”.
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