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25 March 2020
Suspension of employment contracts and working time reductions
Extraordinary unemployment protection and ceasing of activity measures
Extraordinary benefit for ceasing of self-employed activities
Extraordinary contribution-based measures
Exceptional measures to facilitate remote working
Exceptional care-related circumstances
The Spanish government has published Royal Decree-Law 8/2020 of 17 March 2020 on urgent and extraordinary measures to address the economic and social impact of COVID-19 which supplements the labour-based measures adopted to date. This latest decree-law was set to enter into force on 18 March 2020 and will remain in place for one month. Following an analysis of the circumstances at such time, the government may pass a further decree-law to extend the term of the extraordinary measures.
The exceptional measures contained in the decree-law, which this article analyses in detail below, include:
Royal Decree-Law 8/2020 links the extraordinary measures listed above to companies' commitment to maintain workforce levels for six months from when that activity resumes; hence, the restructuring measures which companies wish to implement in the future must be closely watched.
In addition to these new measures, the government also published Royal Decree 465/2020 of 17 March 2020 amending Royal Decree 463/2020 of 14 March 2020, declaring a state of emergency to manage the health-related crisis triggered by COVID-19.
This latest regulation seeks to clarify the idea that persons found outside of their home performing permitted activities must be alone unless they are accompanying those with a disability, minors, the elderly or for any other just cause. Moreover, the temporary closure of hair dressing salons – not including home-based appointments – and the opening of veterinary clinics has also been confirmed.
Procedures for suspension of contracts and reduction of hours due to force majeure
The suspension of employment contracts and reduction of working hours are deemed to be underpinned by an event of force majeure when they are directly triggered by a fall in activity due to COVID-19, including the announcement of a state of emergency, entailing:
All of the above situations must be duly evidenced in order to be considered force majeure events.
Figure 1 provides a timeline of the procedure for the suspension of contracts and reduction of hours due to force majeure.
The procedures for the temporary suspension of contracts or reduction of working hours due to force majeure have been amended as follows:
Procedures for suspension of contracts and reduction of working hours on economic, technical, organisational and production grounds
In cases involving the suspension of contracts and reduction of working hours on economic, technical, organisational and production grounds due to COVID-19, the following features will be applied in relation to the procedure outlined in the corresponding regulation. Figure 2 provides a timeline of the procedure.
Creation of employees' representative commission
Where a company has no legal representation for employees, the commission will be formed of:
In either of the above cases, the representative commission must be formed within the non-extendable five-day period.
The consultation period with the employees' representatives or representative commission as described above must last no more than seven days.
Labour Inspection report
The request is optional for the employment authority, with the report to be issued within a non-extendable seven-day period.
In cases involving the suspension of contracts and the reduction of working hours detailed above, the State Employment Service will:
The duration of the benefit will be extended until the end of the suspension or working hours reduction period in question.
The initiation, instruction and termination of the procedure recognising the right to unemployment benefit will coincide with the terms of the applicable legislation for cases of temporary contract suspensions and working time reductions based on economic, technical, organisational and production grounds.
While the extraordinary public health measures remain in place, the submission of requests to initially register for or resume unemployment benefit or subsidies filed outside of the legally-established time frames will not lead to a reduction of the term of the corresponding right to the benefit.
Unemployment subsidies or those for persons aged over 52 whose requests for extension or other mandatory documents are submitted after the deadline will also not be affected.
On an exceptional basis and limited to one month from the entry into force of Royal Decree 463/2020 declaring a state of emergency, or until the last day of the month in which the state of emergency is lifted, self-employed workers whose activity is suspended or whose turnover for the month prior to the benefit application drops by 75% against the average turnover for the preceding six months will be entitled to an extraordinary benefit for the ceasing of activity.
This benefit will apply only to self-employed workers who:
The benefit amount will be calculated as 70% of the applicable contribution base and the time during which it is received will be counted as a contribution period. Any timeframes for the receipt of benefits for the ceasing of activity to which the self-employed worker may be entitled in the future will not be reduced in light of the above.
In cases of contract suspension and the reduction of working hours approved by the relevant employment authorities due to force majeure, while the period of authorisation remains, the following companies will be exempt from paying a portion of their social security contributions as detailed below:
In order to apply the above exemptions, companies must submit the corresponding request, identifying the affected employees and the specific periods during which their contracts will be suspended or hours reduced.
These company exemptions will not affect employees, who for all intents and purposes will be considered as still paying contributions.
Alternative measures such as remote working are considered a priority over temporary business closure or a drop in activity. Thus, companies must organise themselves accordingly to enable such alternatives where technically and reasonably possible.
For the purpose of facilitating remote working on an exceptional basis, companies' obligation to carry out a risk assessment will be considered fulfilled by means of a self-assessment performed by employees.
Employees who can prove a duty of care towards their spouse, civil partner or blood relatives up to the second degree will be entitled to adapt or reduce their working hours under exceptional circumstances relating to necessary actions to prevent the widespread transmission of COVID-19.
The following features are therefore established in relation to the grounds that trigger applications to adapt and reduce working hours, as well as the procedure to be followed.
Reasons justifying applications to adapt or reduce working hours
Exceptional circumstances will be deemed to exist when:
The right to adapt or reduce working hours is an individual right afforded to each parent or carer and must be justified, reasonable and proportional to a company's circumstances, most notably in the event that several employees of the same enterprise choose to exercise this right.
Working time adaptation
The adaptation of working hours will be primarily set out by employees in terms of scope and arrangement, provided that the request is justified, reasonable and proportional based on the specific care-related duties to be carried out by the employee. Companies and employees will make their best efforts to reach an agreement.
Such adaptation may comprise a change in shifts or schedules, flexible working, split or single shifts, work centre relocation, a change of duties, a change in the way work is performed – including remote working – or any other means available in the company or which may be implemented on a reasonable and proportional basis, limited to the exceptional period during which COVID-19 remains.
Working hours reduction
The right to a special reduction in working hours under exceptional circumstances will be subject to Articles 37.6 and 37.7 of the Workers' Statute, with the following exceptions:
For further information on this topic please contact César Navarro or Elena Esparza at CMS Albiñana & Suarez de Lezo by telephone (+34 91 451 9300) or email (email@example.com or firstname.lastname@example.org). The CMS Albiñana & Suarez de Lezo website can be accessed at www.cms-asl.com.
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