16 May, 2020 @ 10:00
1 min read

COVID-19: As Spain’s Ministry of Labour uncovers fraudulent redundancy schemes, Lawbird’s Antonio Flores explains ERTE


SPANISH ERTE schemes, following the trend of most European countries, allow employers to lay off or temporarily suspend workers in crisis situations.

This can be done fully for the duration of the shift or, alternatively, on a part time basis.

There are two types of ERTEs that can be used. 

The ERTE is based on economic or productivity grounds, which requires a certain degree of participation and an agreement with employees.

The Government will pay salaries (with an upper limit) but not the substantial social security expenses, which are covered by the employer. 

The second furlough procedure is the ERTE ‘force majeure’, an expeditious process that if not resolved by the authorities within five days of application, with a specific resolution, will be deemed approved by application of the mechanism of ‘administrative silence’, without having to seek employees’ consent.

The advantage here is that the Government pays the salaries and covers the social security – we could call it full package – and it is quick to implement.

But who can qualify for ERTE during the crisis?

Companies hit with physical obstacles to freely trade (i.e. street shops, bars, restaurants, hotels, airlines etc.) would typically qualify for ‘force majeure ERTE’ whereas others such as offices (law firms, marketing companies, real estate agencies etc.) would not be eligible for the ‘force majeure’ ERTE as they can still trade online, albeit with major challenges due to the restricted movement of people.

Still, they would qualify for the less attractive ERTE scheme.

Companies that believe they are safe once the five-day deadline has passed, or even once salaries start being paid by the SEPE (State Employment Public Service), are mistaken: the Government has announced it will start to review the files and anyone misusing the ERTE ‘force majeure’ fast-track redundancy tool will face severe fines (between €6,000 and €187,000), quite apart from having to refund temporary leave wages.

Let us take the example of real estate agencies in Andalucia, where real estate businesses do not need to run from a street shop (unlike in Extremadura for instance).

Have they been totally prevented from trading? Are they banned from listing properties? Or showing off-plan properties even if online? The answer is no, they can still do so even if many may not, because they lack clientele (the devil’s in the detail here) and yet, larger numbers of real estate businesses have gone for the full package ERTE. 

Time will tell which legal advisors made the right redundancy scheme choice.

Antonio Flores (Columnist)

Lawyer Antonio Flores is the legal columnist for the Olive Press. Antonio has been practising law since 1997, year in which he began working for a large law firm in Marbella as a Property Lawyer. In 1998 he left the company he had joined a few months earlier, and used his knowledge and the experience gained to build his own practice. He is known throughout the community as independent, reputable and trustworthy. Through a combination of strong work ethics, determination and international exposure, his competence of Spanish Law is unparalleled and demonstrated through his fluency in English and Spanish.

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