Clause of maintenance of employment in ERTEs What do I do after the ERTE?

Since the publication, on March 14, of Royal Decree 463/2020, declaring a state of alarm for the management of the health crisis situation caused by COVID-19, many royal decrees have been issued over the months depending on how the pandemic was developing and the situation in which the companies found themselves, proceeding to the extensions of the force majeure ERTES, offering the possibility of exemption of quotas according to certain percentages, the number of employees and the corresponding CNAE of the different activities, in order to "safeguard" a situation that for many is proving to be very complicated.

Notwithstanding the above, many of the companies in the sector are now beginning to think about the options available to them after May, in the event that the ERTES are not extended and they have to reinstate all their workers, or how the summer will affect sales and bookings and whether they will be able to meet all personnel expenses.

Therefore, the most important thing is to know what the current regulations say in order to make the right decision in one direction or the other.

It is necessary to highlight one of the most important and most debated points, which is the issue of maintaining employment. Royal Decree-Law 8/2020, of March 17, on extraordinary urgent measures to face the economic and social impact of COVID-19, as everyone will remember, imposed, for the first time, the obligation to safeguard employment for a period of six months from the date of resumption of activity for companies that had carried out an ERTE due to force majeure due to COVID-19, provided that they benefited from the exemption of Social Security contributions. Through Royal Decree-Law 24/2020, of June 26, said measure was established for companies in ERTE ETOP and was continued through Royal Decree-Law 30/2020, of September 29, for those companies that as from October 1, 2020 would benefit from exonerations of social security contributions. Finally, Royal Decree-Law 2/2021, of January 26, on the reinforcement and consolidation of social measures in defense of employment maintained, as the previous ones, the validity of the commitments to maintain the employment of the companies that have benefited from exemptions to the Social Security for the ERTES applied until January 31, 2021, It also regulated a new obligation to safeguard employment for another 6 months for companies that apply exonerations for the ERTES from February 1 and until May 31, 2021, whether for companies that extend their ERTES or start a new one.

And why can these measures affect the business fabric? We must not forget that in the different royal decrees that have been published, in the case of benefits of exemption of quotas by the companies, new periods of maintenance of employment have been incorporated, which are closely linked to the exemption of quotas, for the sake of the continuity of the workers in the gear of the companies and thus avoid, or so they have tried, massive layoffs. And this is so because, both in RDL 30/2020 and in this last one, RDL 2/2021, what the regulation indicates is that the companies will be committed to maintain the level of employment for another six months, since, if the company was affected by a commitment to maintain employment previously acquired, the beginning of this will take place when the previous one has ended. Therefore, we could be faced with a period of 18 months of employment maintenance to which the company would be obliged.

In this regard, it should be noted that the legislation establishes that companies that fail to comply with this commitment to maintain employment must reimburse the full amount of the exempted contributions, including the corresponding surcharge and late payment interest, except for the exceptions stipulated in the sixth additional provision of Royal Decree-Law 8/2020, of March 17, which will be discussed later on.

While it is true that as regards the accumulation of deadlines with respect to the maintenance of employment there is an open debate where many consider it unfeasible and impossible to carry out, it is no less true that the Labor and Social Security Inspection published an Internal Note on the consequences of non-compliance with the "safeguarding of employment" where the criterion of total reimbursement was established. This criterion was endorsed by the General Labor Directorate of the Ministry, as well as by the General Treasury of the Social Security, although it is true that it leaves an open door to be able to discuss it in court. And with regard to this "total refund", we believe that a reflection should be made: if the spirit of the regulation and its main purpose is to safeguard, in the future, the employment of all those workers who may have been affected by a temporary employment regulation procedure and the employer is forced to return the totality of the exonerations of all its employees, would this not represent a very serious threat to the viability of companies in the sector, probably leading to the disappearance of thousands of jobs? The answer would probably be a resounding yes, but to date there is no jurisprudence on the matter, therefore, the employer must act, analyzing and assessing any type of action depending on the particular situation of each company. 

However, it is necessary to recall the provisions of the Sixth Additional Provision of RDL 8/2020 of March 17, on extraordinary urgent measures to address the economic and social impact of COVID-19, which states that the commitment to maintain employment shall not be considered to have been breached in the following cases: disciplinary dismissal declared fair, voluntary resignation of the employee, retirement of the employee, total or absolute permanent disability or great disability of the employee, termination of temporary contracts due to expiration of the time agreed in the contract or termination of work or service and termination of the call of people with permanent-discontinuous contract, when this does not involve a dismissal but an interruption of the same.

Likewise, and according to Royal Decree-Law 18/2020, of May 12, on social measures in defense of employment, it is established that the commitment to maintain employment will not be applicable in those companies in which there is a risk of bankruptcy based on Article 5.2 of Law 22/2003, of July 9, 2003, on Bankruptcy in relation to Article 2.4 of the aforementioned law. In this case, and in view of the lack of clarity or vagueness of the regulations, the priority objective must be to have all the documentary evidence that accredits the situation of the company, in order to assert this exception, if the employer were to need to proceed with the termination of the contracts of its employees.

Throughout all these months and the different trainings and consultancies that we have been offering, from TOURISM & LAW, we have always conveyed the need to analyze case by case. The most appropriate solution is not always to "put on our flotation device, jump into the river and let the current take us", because what do we do afterwards? Our objective must be the continuity of our companies and for this we must analyze the pros and cons of each step we take. As of today, we do not know whether or not the ERTES will finally be extended, and for this reason we have the obligation to study and evaluate the options available to us in order to make the right decision, since in the event that the Government, trade unions and employers do not agree on the extension, the companies will have to reinstate their entire workforce, with the consequences that this would entail.

MªPaz Abad (Lawyer-Director T&L)