Due to the health situation we are going through, the Executive has introduced measures to reduce the impact of COVID-19 in the economic sphere. For this reason, it is common to hear in the media references to the famous Expedientes de Regulación de Empleo Temporal (ERTE).
These proceedings consist of the temporary suspension of the employment contract or the reduction of the working day, as a consequence of the occurrence of force majeure circumstances. Before analyzing their characteristics and given their current importance, it should be pointed out that on January 27th, Royal Decree-Law 2/2021, of January 26th, on social measures in defense of employment, came into force, by means of which the extension of the ERTEs is implemented until May 31st, 2021. The objective is none other than to consolidate and reinforce the social measures in employment matters that have been progressively introduced throughout the pandemic.
Having said the above, some of the defining features of the Temporary Labor Force Adjustment Plans are proposed below.
In the first place, it must be taken into account that in order to apply the suspension of the employment contract, the employer must justify economic, technical, organizational or production causes or those derived from temporary force majeure.
It is understood that causes concur:
  • Economic, when the results of the company show a negative economic situation, in cases such as the existence of current or expected losses, or the persistent decrease in its level of ordinary income or sales. In any case, it will be understood that the decrease is persistent if for two consecutive quarters the level of ordinary income or sales in each quarter is lower than that recorded in the same quarter of the previous year.
  • Technical, when there are changes, among others, in the means or instruments of production.
  • Organizational, when changes occur, among others, in the area of personnel working systems and methods or in the way production is organized.
  • Productive, when changes occur, among others, in the demand for the products or services that the company intends to place on the market.

Temporary causes of force majeure are considered to be fires, earthquakes, floods, or any other cause arising from an external event outside the sphere of activity of the employer, being unforeseeable or unavoidable situations.

The labor authority must establish force majeure, although we currently have a presumption to consider the health crisis originated by COVID-19 as a case of force majeure.
Secondly, the temporary reduction of the working day will consist of a reduction of between ten and seventy percent of the working day computed on a daily, weekly, monthly or annual basis. During the period of reduced working hours, no overtime may be worked, except in cases of force majeure.
Finally, it should be noted that the worker affected by a temporary reduction of working hours will be in a legal situation of unemployment.

If your company has been affected by the negative consequences of the pandemic and you wish to know all the keys to make use of the Temporary Labor Force Reduction Plans, contact Llorca Abogados.