Spain extends temporary unemployment scheme ERTE until the end of March

by Lorraine Williamson
extend ERTE

MADRID – The work protection mechanism ERTE, which was put into effect at the start of the pandemic, extends again after negotiations with the social partners. Until the end of March, however, different conditions will apply to employers for this scheme. 

The ERTE is a measure that allows the Spanish government to protect existing jobs in situations of force majeure. This is done by temporarily firing employees and allowing them to return when they can. During this work-free period, the government pays almost all social security contributions. However, the employees remain registered as employed by the Seguridad Social. 

From 3.6 million to 1000 ERTEs 

At the worst moment of the pandemic, an ERTE scheme was made for 3.6 million employees. For the still remaining 1000 employees, the scheme would end on February 28. However, the ERTE scheme extends until the end of March and serves as a transition period until the new work protection model, the so-called RED mechanism, comes into effect. This model was included in the agreement on the labour reforms at the end of last year and is intended for companies or sectors experiencing problems of a structural nature. The ERTE will also continue to exist for temporary situations of force majeure. 

Sources from the CCOO union have announced that the premium waiver will increase from 80% to 60% in March for employers who have made a training plan for their employees. For all employers without a training plan, the premium waiver goes from 40% to 20%. For small companies with 10 or fewer employees, the exemption goes from 50% to 30%. 

Cumbre Villas

ERTE becomes RED 

For structural emergencies, there will therefore be the work protection mechanism RED, which has two variants. Those are the RED-cíclico and the RED-sectoral. In the first case, it concerns help in retraining employees to work in another company or even in a different sector. The RED-cíclico lasts a maximum of 1 year. The old and new employers jointly pay the employee’s dismissal scheme. 

The RED sectorial is aimed at employees in sectors undergoing a complete change. This involves a complete workforce that needs to be retrained. This variant also has a 1-year duration, with the option of two extensions for a maximum of six months. 

Plan Mecuida 

The so-called Plan Mecuida, a measure for labour flexibility that is intended for employees who are unable to work due to quarantine or caring for a family member with Covid-19, will also be extended until June 30. The extension of Plan Mecuida and ERTE will be approved by the Council of Ministers on Tuesday. 

Related article: Current ERTE extension

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