New measures to face the economic and social impact of COVID-19

As you will know from recent media coverage, the Government approved new measures that expand or clarify those previously approved by Royal Decree 463/2020 of March 14th, also including new extraordinary urgent measures to face the economic and social impact of COVID-19.

The decisions adopted have been published today, Wednesday March 18th 2020, in Royal Decree 465/2020 of March 17th 2020 and Royal Decree-Law 8/2020 of March 17th 2020, the latter being an extensive Royal Decree,  which is derived from a very detailed study.

Throughout the following days we will inform you of the implications of each of the measures adopted. This communication being only informative in order to help you make decisions regarding your business and economic activities. These include:

TEMPORARY FLEXIBLE MEASURES TO AVOID STAFF DISMISSALS.

Royal Decree-Law 8/2020 of March 17, in its articles 22 to 26 includes a series of exceptional measures to make the mechanisms of temporary adjustment of activity more flexible, to try to avoid dismissals by companies during the COVID crisis- 19. The following measures can be highlighted:

Exceptional measures in relation to ERTEs (temporary lay-off proceeding) motivated by force majeure.

ERTEs that have their direct cause in a loss of activity as a consequence of COVID-19, including the emergency situation, will be considered as coming from a situation of force majeure whenever the loss of activity implies any of the following circumstances:

o Suspension or cancellation of activities.
o Temporary closure of public  premises.
o Restrictions on public transport, mobility of people and / or goods.
o Lack of supplies that seriously prevent  activity.
o Urgent and extraordinary situations due to contagion of the workforce or adoption of preventive isolation measures decreed by the health authority.

If, based on the above, the company decides to carry out the ERTE, it would take effect from the date of the act which caused the force majeure. The resolution of the ERTE will be issued by the labour authority within 5 days from the request, after a report, outlining the case, from the Labour and Social Security Inspection. This report must be limited to verifying the existence of the force majeure alleged by the company, regardless of the number of workers affected.

How will the Social Security quota corresponding to the business contribution, be financed.

When the ERTE is motivated by force majeure, the company will be exempt from their quota payment of the business contribution during the period that the ERTE lasts.    This will be based on the following:

o If at 02/29/2020 the company had less than 50 employees: 100% of the payment of the quota corresponding to the business contribution will be exempt.


o If at 02/29/2020 the company had 50 employees or more: 75% of the payment of the quota corresponding to the business contribution will be exempt.

The employer must expressly request said exemption.

ATTENTION: The sixth additional provision of Royal Decree-Law 8/2020, establishes that the extraordinary measures approved in the labour field will be subject to the company’s commitment to maintain employment for a period of six months from the date of resumption of the activity.

Exceptional measures in relation to ERTEs due to economic, technical, organisational or production reasons.

For ERTEs that have their cause in an economic, technical, organisational and production reason. The following specialties are approved as exceptional reasons:
o In the absence of legal representation of employees, the commission for negotiation during the consultation period will be formed by the most representative unions based on the applicable collective agreement or, if this representation is not established, the commission will be composed of three employees from the company itself, chosen in accordance with the provisions of article 41.4 of the Workers Statute. This Commission must be constituted within the non-extendable period of 5 days.

o The consultation period between the company and the representation of the employees or the representative commission shall not exceed the maximum period of 7 days.

o The report of the Labour and Social Security Inspection may be requested by  these organisations and will be issued within the non-extendable period of 7 days.

What aid has been provided for this type of ERTE?

In the case of ERTE due to economic, technical, organisational and production reasons, the right to contributory unemployment benefit will be recognized for the affected employees, even if they do not have the necessary minimum period of paid employment necessary for it. Nothing has been approved regarding the exemption from the payment of Social Security fees corresponding to the business contribution for this type of ERTE.

ATTENTION: The sixth additional provision of Royal Decree-Law 8/2020, establishes that the extraordinary measures approved in the labour field will be subject to the company’s commitment to maintain employment for a period of six months from the date of resumption of the activity.

MEASURES TO SUPPORT VULNERABLE EMPLOYEES, FAMILIES AND GROUPS.

Extraordinary benefit for cessation of activity for the self-employed.

The right to receive an extraordinary benefit for the cessation of activity for self-employed is approved, and provided that the following conditions are met:

o Duration of the extraordinary benefit: one month from March 14th 2020 or until the last day of the month in which the state of emergency ends.

o Amount of extraordinary benefit: 70% of the regulatory base, which is calculated on the average contribution during the 12 previous months to the termination of the situation . The extraordinary benefit may be requested even if the minimum period to access the cessation of activity benefit has not been met, but it will be incompatible with any other Social Security benefit that the self-employer is already receiving.

Requirements necessary to exercise this right:

o That its activity has been suspended by virtue of Royal Decree 463/2020 or that its billing in the month prior to which the benefit is requested is reduced by at least 75%  of the previous semester .

o Be affiliated and registered on the date of the declaration of the state of emergency, this is March 14th 2020.

o Be up to date in the payment of Social Security payments, if it is not the case,  voluntarily payments may be made by paying the due payments and at that moment can request the right to the extraordinary benefit.

Priority of remote work against temporary cessation or reduction of activity.

Whenever it is reasonably possible and the worth is proportionate,  systems will be established to maintain the activity in companies through alternative mechanisms, particularly through remote work. These measures must be a priority against the temporary cessation or reduction of activity.

As an exceptional measure during the state of emergency, to ensure that the company continues its activity respecting compliance with the Occupational Risk Prevention Law, it will be sufficient for the employee to complete voluntary self-evaluation that is annexed in the Royal Decree (let us know if you require such self-evaluation for your employees and we will send you an editable PDF model).

Rights of adaptation of the schedule and reduction of working hours.

Workers have the right to access to the adaptation of their working day and / or to reduce it when they prove:
o Having to dedicate themselves to caring for their spouse or partner.
o Having to dedicate themselves to caring for family members up to the second degree of consanguinity.
o When there are exceptional circumstances related to the actions necessary to prevent community transmission of COVID-19, for example, for the care of children after the closure of educational centres has been decreed or when the employee must attend to another vulnerable person who was in the care of a third party who can no longer continue to provide such care.

The adaptation of the day may consist of shift changes; alteration of the schedule; flexible schedule; split or continued working day; change of work centre; change of functions; provision of remote work; any other change available or that can be implemented in a reasonable and proportionate manner, bearing in mind the temporary and exceptional nature of the measures envisaged.

This right included in article 6 of the Royal Decree, is  an individual right of each of the parents or caregivers, and must be exercised in a co-responsible, reasonable and proportionate manner in relation to the situation of the company, particularly when there are several employees who access it in the same company. The company and the employee must do everything possible to reach an agreement.

The employee will only have the right to request reductions in working hours that reach 100% when said request is justified, reasonable and proportionate to the situation of the company.

All the measures that are adopted to adapt the schedule and the reduction of working hours will have a temporary nature limited to the duration of COVID-19.

Credit supplementation to finance an Extraordinary Social Fund.

The Government supplements the credit approved in the budgets to finance an Extraordinary Social Fund destined exclusively to the social consequences of COVID-19 for those vulnerable workers, families and groups.

Likewise, the supply of water and energy to vulnerable consumers is guaranteed, guaranteeing said supply without the possibility of suspending it for those consumers in which the condition of vulnerable, severe vulnerable consumer or at risk of social exclusion occurs.

Moratorium on mortgage debt for the acquisition of habitual residence.

Measures have been established to extend the term established for the payment of mortgage debts under certain circumstances, with a series of requirements. We will expand this information later.

More tomorrow…

Within Royal Decree-Law 8/2020 of March 17, there measures have been included  that affect the Suspension of deadlines in the tax field and extraordinary measures applicable to legal entities under private law, whose content and scope we will inform you about tomorrow. Just as an advance:
o For the moment, there have been no changes regarding filing deadlines of the tax calendar for the year 2020.
o The legal period for the preparation and presentation of the annual accounts has been exceptionally modified.