AFTER three weeks of negotiation, trade unions and government ministers have agreed on conditions to extend ERTEs until June 30.

The temporary redundancy mechanism currently covers 3.3 million workers in Spain, with the state exonerating employers of social security contributions and paying an unemployment benefit to laid-off workers.

Until now, the ERTE mechanism was linked to the state of alarm – but Spain’s Minister for Work Yolanda Diaz last night reassured unions and employers the mechanism will continue regardless of de-escalation.

The new agreement is expected to be approved in Spain’s congress next Tuesday, report El Mundo.

Las Provincias report suggestions the government will allow industries badly-hit by the coronavirus lockdown to further extend ERTEs beyond June 30 – a key demand from the hospitality and tourism-dependent sectors.

For now, the CEOE and Cepyme associations, as well as the UGT and CCOO unions, have ratified last night’s agreements. Yolanda Díaz thanked the presidents of all organisations for their effort to reach the agreement, admitting both sides had made concessions.

The new measures include:

  • Companies with less than 50 workers who resume activity will be exempt from paying 85% of the social contributions of their employees this month, and 70% in June. For companies with more than 50 workers, the percentages will be 60% for May and 45% for June.
  • The Government will seek to extend until December 31 protections to prevent the firing of workers currently on an ERTE, and will announce a raft of incentives for companies that resume business activity with staff in tact.
  • Any business that dismisses its staff within the timeframe will have to pay back exonerated social security contributions, with interest.
  • The ERTE mechanism will be divided into ‘fuerza mayor total’ and ‘fuerza mayor parcial’.
  • Fuerza mayor total will exempt companies with less than 50 workers from 100% of social contributions, and 75% for those with more than 50.
  • Fuerza Mayor Parcial will mean exemptions from 30 to 85% of social security contributions, depending on the circumstances. If companies restart activity with reductions in working hours, they will be exempt from 85% of contributions for May and 70% in June if they have less than 50 workers. If they have more employees, the rates will be 60% for May and 45 % for June. Companies that resume business but keep some of their workforce on an ERTE will be able exempt from 60% of contributions in May quotas and 45% in June if they have less than 50 workers. Rates will be 45% of May contributions and 30% in June if they have more employees.

The agreement has been reached despite the continued controversy about the six-month period in which dismissals are not allowed – regardless of whether workers on an ERTE were on fixed or freelance contracts.

In April, the Ministry of Labor paid unemployment and ERTE benefits to 5.2 million people, costing €4.5 billion.

The Government estimates the ERTE mechanism will cost a total of €18 billion and help 4 million people, as reported to the European Commission.

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