On 11 March 2020, the World Health Organization announced that the COVID-19 outbreak had reached pandemic proportions and issued strict recommendations for countries’ health authorities to adopt isolation policies and to close businesses that could generate a risk of contagion.
Due to the spread of the disease in Spain, the Government adopted a series of measures in the form of (i) Royal Decree 463/2020, of 14 March, which declares the state of emergency to tackle the health emergency caused by COVID-19, ("RD 463/2020"); (ii) Royal Decree 465/2020, of 17 March, amending Royal Decree 463/2020, of 14 March, which declares the state of emergency to tackle the health emergency caused by COVID-19
("RD 465/2020") and; (iii) Royal Decree-law 8/2020, of 17 March, on extraordinary measures to tackle the economic and social impact of COVID-19 ("RDL 8/2020"). All of these provisions adopt extraordinary measures and have had a considerable impact on employment law and the Social Security.
Sectors affected by the state of emergency to manage the health crisis caused by COVID-19
As a result of the health crisis, the state of emergency has suspended a huge number of establishments opening to the public, except for:
- retail establishments that sell food, beverages and necessity goods;
- medical establishments;
- veterinary clinics and centres;
- establishments specialising in the sale of orthopaedic products;
- establishments specialising in the sale of hygiene products;
- establishments that sell stationary;
- petrol stations;
- establishments that sell tobacco products;
- establishments specialising in the sale of technological and telecommunications products;
- establishments specialising in the sale of pet food;
- establishments that provide support for online sales and e-commerce;
- establishments that provide support to telephone and/or postal activities;
- dry cleaners and laundromats; and
- professional mobile hairdressers.
Employees performing their normal professional services in any of the above businesses should continue to go to their place of work, except when:
- the employer has placed them on sick leave;
- the employer has allowed the employees to work from home;
- the employee has tested positive for COVID-19. It should be highlighted that COVID-19 infection constitutes leave from work due to accident;
- the employee is officially in isolation or infection due to COVID-19.
Freezing of all procedural deadlines and terms
The terms and deadlines established in procedural provisions have been frozen, with the exception of collective industrial disputes and proceedings to protect fundamental rights and public freedoms as established by Law 36/2011, of 10 October, which regulates the labour jurisdiction (Ley 36/2011, de 10 de octubre, reguladora de la jurisdicción social).
Only trials declared urgent by law and urgent and preferential requests for interim relief, as well as the collective dismissal proceedings and temporary lay-off processes (ERTE) will take place.
Modifications of rules regarding temporary lay-offs
The new provisions have shortened the time periods and relaxed the procedures to make temporary lay-offs (Expediente de Regulación Temporal de Empleo, or ERTE). The modifications differ depending on whether the ERTE is based on (i) grounds of force majeure, or (ii) objective grounds, i.e. economic, technical, organisational and/or productive grounds.
The modifications are described below:
ERTE on grounds of force majeure
- Grounds. The following will constitute force majeure: suspension and/or cancellation of business; temporary closure of establishments open to the public; restrictions on public transport and the movement of people and goods; supply shortages; contagion among the staff or the imposition of preventive isolation as decreed by the labour authorities, all as a result of the state of emergency.
- Procedure. When the company decides to suspend employment contracts and/or to temporarily reduce working hours, the following will apply:
- The company will first have to submit an application, which must include a report on the loss of business as a result of the COVID-19 outbreak and documentary evidence for the same.
- The company must inform the affected workers of the application and it must send the above report and documentary evidence to the workers’ representatives, if any.
- The labour authority must verify that the force majeure event indeed triggered the suspension of employment contracts or reduced working hours, irrespective of the number of workers affected.
- The labour authority must deliver its decision within five days of the application. The labour authority may, at its discretion, also request a report from the Labour and Social Security Inspectorate; if so, it must issue its report within five days.
- If the company is permitted to implement the measures, it may suspend the employment contracts or reduce working hours with effect from the date on which the event triggering the force majeure took place.
ERTE on objective grounds
- Grounds. When a company decides to suspend employment contracts or reduce working hours on economic, technical, organisational and/or productive grounds connected to the COVID-19 outbreak.
Objective and correctly documented evidence must be provided of the grounds for the measure, as was the case before the COVID-19 outbreak.
- Procedure. The following new rules now apply to the process:
- If there are no workers’ representatives, there are two possible scenarios:
- The workers’ representative committee set up to negotiate during the consultation period will be composed of the trade unions that are most representative in the company’s sector of business and which have authority to be part of the committee set up to negotiate the applicable collective bargaining agreement. Decisions are taken by representative majority.
- If no workers’ representative committee is set up, the committee will be composed of three workers from the company in question.
- If there are no workers’ representatives, there are two possible scenarios:
In any of the above scenarios, the representative committee must be assembled within a non-extendable period of five days.
- The consultation period between the company and the workers’ representatives or representative committee must not exceed seven days.
- The report issued by the Labour and Social Security Inspectorate, which the labour authority has discretion to request, must be issued within seven days.
Social security impact for companies that impose temporary lay-offs on grounds of force majeure
When a company is authorised to suspend employment contracts or reduce working hours on grounds of temporary force majeure triggered by the COVID-19 outbreak, the General Treasury of the Social Security will release that company from the obligation to pay the company’s Social Security contribution and joint company-worker contributions for the term during which employment contracts are suspended or working hours reduced.
If the company has 50 or more workers registered with the Social Security, it will be released from paying 75% of its Social Security contribution. If it has less than 50 workers, it will be released from paying 100% of the contribution.
For the above purposes, a company’s employee headcount will be taken as at 29 February 2020.
Impact of the measures on employees
The following will apply to workers affected by the measures:
- Workers are entitled to unemployment benefit even if they have not paid contributions for the minimum required period.
- The time during which workers receive unemployment benefit will not count towards the maximum time during which they are permitted to receive that benefit.
Workers are permitted to adapt and reduce their working day up to 100%, reducing their remuneration accordingly, when they provide evidence that they need to care for a spouse or civil partner or family member (to the second degree).
The concept of “adapting the working day” due to exceptional needs connected to COVID-19 is in principle a prerogative of the employee.
The employee is able to determine: (i) the scope, (ii) content, (iii) justification and (iv) proportion of the measure adopted. The company and the worker must do everything possible to reach an agreement.
The right to adapt the working day may entail:
- redistribution of working time;
- shift changes;
- changes to working hours;
- flexible working times;
- split or continuous working day;
- change of workplace;
- change of functions;
- changes to the way work is performed (remote working).
Remote working and compliance with the Spanish health and safety law 31/1995, of 8 November
Among the extraordinary measures available, companies must enable and encourage remote working by employees who are able to perform their professional services at home.
Given the exceptional circumstances, where an employee conducts a self-assessment, this shall be understood as compliance with the obligation to carry out an occupational health and safety assessment pursuant to article 16 of the Spanish Health and Safety Law 31/1995 of 8 November (Ley 31/1995, de 8 de noviembre, de Prevención de Riesgos Laborales).
Duration of the extraordinary measures
All of these measures shall apply until the extraordinary situation caused by the COVID-19 outbreak comes to an end.
All of the above measures are linked to the obligation imposed on companies to maintain their levels of employment for six months beyond the end of the state of emergency.
The contents of this publication are for reference purposes only and may not be current as at the date of accessing this publication. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2021