Learn how ERTEs, temporary layoffs, are instrumental in protecting employment during the coronavirus crisis

The government wants to protect employment at all cost. In its Law RDL 9/2020 of March 27th it bans all lay off of staff for any reason related to coronavirus; economical, technical, organisational or production related reasons in connection with Covid-19 crisis. 

This means that companies, employers, will not be able to use those reasons to justify a dismissal for objective reasons.

Rather, the government has stipulated that a Temporary Layoff Scheme (ERTE) is the right instrument to deal with this period of “Economical hibernation”.

What is an ERTE?

In essence the company is given permission to send its staff  home for a temporary period so that these can obtain unemployment benefits.  Depending on the argued reasons this might be ruled by certain conditions. 

In any case:

• Employer needs to notify the stuff that he / she is going to  apply for an ERTE.

If the company is not forced to close by law, it must produce a document to justify the losses and need to close. (For instance, showing that remote work is not possible).

ERTE on grounds of force majeure.

• This is for companies which have been forced to close by law.
• Employees have access to unemployment benefits even if they have not contributed long enough. 
• Employers are exempt from paying Social Security contribution for their employees.
• The ERTE expires when the State of Alert concludes and workers need to be readmitted inmediately.

ERTE on grounds of economical, technical, organisational or production related reasons in connection with Covid-19 crisis.

• Employees have access to unemployment benefits even if they have not contributed long enough. 
• Employers must continue to pay Social Security contribution for their employees.
• Employers can specify how long the ERTE will last for. 

The ERTE needs to be permitted by the Work Inspecting Department. The extraordinary law in the situation of coronavirus crisis has given a period of 5-7 days to approve them. This implies that most cases will be revised afterwards.