EMCC European Monitoring Centre on Change

Temporary lay-off plan

Spain
Phase: Management
Tip:
  • Response to COVID-19
  • Income support for workers
  • Working time flexibility
Last modified: 03 August, 2021
Domače ime:

Expediente Temporal de Regulación de Empleo

Angleško ime:

Temporary lay-off plan

Coverage/Eligibility

A temporary layoff plan is a special administrative labour procedure which can be executed due to failure of the business activity as a result of economic, technical, organisational or production problems. Since Royal Decree law 10/2010 was approved, it can be implemented irrespectively of the number of workers affected. Law 3/2012 eliminated the requirement of administrative authorisation.

During the COVID-19 pandemic, all workers, including those in cooperative companies, affected by temporary collective dismissals or reduced working time schemes have the right to receive unemployment benefits, even if they do not meet the minimum contribution period required for it.

A special mechanism also covers domestic workers (people who are registered in the Special System of Home Employees of the General Social Security Regime, before the entry into force of Royal Decree 463/2020).

Main characteristics

A temporary layoff plan is a special administrative labour procedure that allows companies to temporarily dismiss workers or to reduce the working time. As far as the consequences of the measure are concerned, in temporary layoff cases the workers are entitled to unemployment benefits, while the enterprise must continue paying social security contributions. In the case of working time reduction, workers are entitled to partial unemployment benefits. In those cases, working time can be reduced between 10% and 70%. Once the measure is over, workers return to their jobs according to their previous contractual conditions.

Since law 3/2012 was approved, the procedure can be implemented irrespectively of the number of workers affected. That law also eliminated the requirement of administrative authorisation. Once all the relevant information has been reported, a consultation process is opened. The consultation process with the employee representatives will not be longer than 30 days (or 15 in enterprise employing fewer than 50 employees). This fulfils the request of the Spanish legislation to 'exercise in good time' the consultation process. Consultation implies meetings for deliberation where the company management and the workers' legal representatives discuss the reasons for the redundancies, the possibility of avoiding or reducing the number of redundancies and the possible measures aiming to mitigate the consequences over the affected workers and to permit the continuity and viability of the enterprise project. In the absence of workers’ legal representatives, employees are able to confer representation on a commission made up of a maximum of three members of the most representative trade unions of the sector.

The process works as follows. First, the employer notifies to the public employment services the initiation of the layoff process. This allows the public employment service to begin a procedure to ensure compliance with all legal requirements established. Then, the employer must notify the employee representative in writing about the opening of the consultation process. The notification must contain the following information: number and professional categories of the workers affected by the redundancy; number and professional categories of the workers normally employed during the last year; justification of the measure according to the concurrence of economic, technical, organisational or productive causes; nominative relationship of workers affected; and information about the composition of the employees’ representative commission (Art. 8, Royal decree 801/2011 of 10 June).

Simplified procedure

On 27 March 2020, as a response to the COVID-19 crisis, the government has simplified the administrative procedures whereby companies implementing a temporary collective dismissal ask the unemployment benefit for their employees, so that the workers will receive their payment benefit faster. This simplified procedure for temporary layoff was initially planned to be implemented until the end of the state of alarm to maintain confinement measures, although social partners together with the Ministry of Work agreed its extension until September 2020. In September, the government and the social partners have agreed an extension of the measure until 31 January 2021.

For cases in which the company decides to suspend contracts or temporarily reduce the working day, the following process will be followed:

  • The procedure will begin at the request of the company, which will be accompanied by a report regarding the link of the loss of activity as a result of COVID-19, as well as, where appropriate, the corresponding supporting documentation. The company must communicate its request to the workers and transfer the previous report and the supporting documentation, if any, to their representatives;
  • The existence of force majeure, as a motivating cause for the suspension of contracts or the reduction in working hours, must be verified by the labour authority, regardless of the number of workers affected;
  • The decision of the labour authority will be issued within a period of five days from the request, following a report, where appropriate, of the Labour and Social Security Inspection and must be limited to verifying the existence, when appropriate, of force majeure alleged by the company;
  • The report of the Labour and Social Security Inspection, whose request will be optional for the labour authority, will be fulfilled within the non-extendable period of five days (although, at the time of writing there may be delays due to the current overload).

For cooperative companies, when due to lack of adequate or sufficient means the general assembly of the cooperative cannot be called to hold it through virtual means, the company's governing council will assume the authority to approve the total or partial suspension of the provision of work for its members and partners and will issue the corresponding certification for processing, under the terms provided in articles 22 and 23 of Royal Decree-Law 8/2020 of 17 March, of extraordinary urgent measures to face the economic and social impact of COVID-19.

In addition to the collective request, the communication by the company to the public employment service will include the following information, individually for each of the affected establishments:

  • Name or company name, address, tax identification number and social security contribution account code to which the workers whose suspensions or reductions in working hours are requested are listed;
  • Name and surnames, tax identification number, telephone and email address of the legal representative of the company;
  • File number assigned by the labour authority;
  • Specification of the measures to be adopted, as well as the starting date on which each of the workers will be affected by them;
  • In the event of a reduction in working hours, determination of the percentage of temporary reduction, computed on a daily, weekly, monthly or annual basis;
  • For the purposes of accrediting the representation of workers, a responsible declaration in which it must be stated that the authorisation of those for their presentation has been obtained;
  • The complementary information that, where appropriate, is determined by resolution of the general directorate of the state public employment service.

Entitlement to benefit

All workers affected by temporary collective dismissals or reduced working time schemes will have the right to receive unemployment benefits even if they do not meet the minimum contribution period required for it. Moreover, for future unemployment spells, the period in which the worker received unemployment benefits under temporary collective dismissals or reduced working time schemes motivated by COVID-19 will not be considered as consumed ('counter to zero' policy). The objective of this measure is to make sure that all workers under these procedures will receive income support.

In all cases it is required that the contract has been signed prior to the date of entry into force of this royal decree-law. The measures provided for in this regulation shall be applicable to the affected workers if, at the time of the adoption of the temporary collective dismissal or reduced working time procedure, they had a previous right to unemployment benefit or subsidy suspended and/or if they lacked the minimum period of listed employment to cause right to contributory benefit, or had not received previous unemployment benefit.

Domestic workers will also have access to the extraordinary benefit for lack of activity. They are considered an especially vulnerable category in the current circumstances, given that normally they do not have the right to unemployment benefit. A temporary extraordinary subsidy was, consequently, introduced. The amount of the subsidy will depend on the remuneration previously received, as well as the reduction in activity suffered, requiring proof of such reduction from the employer. This subsidy is compatible with the maintenance of other activities and the maximum amount to be received will be the minimum wage (standing at €950 per month in 2020) without extraordinary payments.

Right to flexible working time and reduction of working hours

This measure allows workers to adapt or reduce their workday to care for their dependants, with a 100% reduction in the workday being possible. The objective is to facilitate those people with care responsibilities of disabled, elderly or child dependants, to adapt their working time and eventually reduce it in order to be able to guarantee the care tasks. This policy was included in Royal Decree 8/2020 of 17 March. Eligible employees should make contact with their company to get the application of the regulations contained in the labour code in relation to reduction of working time.

Funding

  • National funds
  • Employer

Involved actors

National government
Funding.
Public employment services
Administration.
Employer or employee organisations
Negotiations.

Effectiveness

From the beginning of the economic crisis of 2008, the number of workers affected by temporary dismissals dramatically increased. Afterwards, the recovery of employment implied a decrease in the use of these measures until 2017. At a later stage, the number of workers benefitting of this instrument restarted to raise. 

According to the statistics of the Ministry of Work and Social Economy, the number of workers affected by temporary dismissal was 300,713 in 2012, 234,116 in 2013, 92,234 in 2014, 62,298 in 2015, 53,658 in 2016, 28,257 in 2017, 44,954 in 2018 and 50,033 in 2019 (Ministry of Work and Social Economy 2020).

The health crisis caused by COVID-19 has triggered new situations of need linked to the lack of employment and has aggravated the situation in which previously unemployed people found themselves. 3,386,000 workers were affected by temporary dismissal until May 2020. Nevertheless, more than one million of these affected workers are returning (depending on local situations) to their jobs as their companies are resuming activity.

Strengths

This measure reduces the number of job losses and permits employers to adjust their production to the recession (Felgueroso, De la Fuente & Jansen 2020).

Weaknesses

Under the new regulation, temporary layoff does not need to be authorised by the labour authority. Thus, the power of the companies to apply for the measure has been increased. Social dialogue has been fundamental in the design of this new regulation during the crisis. Indeed, most of the Royal Decree 8/2020 (regualting the simplified procedure of temporary layoff plans) resulted of previous agreements of social partners (CCOO, UGT, CEOE and CEPYME) (La Razón 2020)

Examples

Abc, Acerinox, Abm Rexel, Altadis, Arcelor, Banco Popular, Bridgestone, Conforama, Citroen, Corte Inglés, SEAT, OPEL, NISSAN.
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