Due to the interruption of business activities, some companies may recur to a mechanism of flexible labour called an ERTE.
The coronavirus has put to the test different companies’ capacities to resist and withstand medical emergencies, primarily due to the state of alarm. Due to the interruption of commercial activity, weather this is due to the restrictions imposed by the state of alarm or the business’ voluntary action in the context of this medical emergency, companies may use mechanisms like ERTE to safeguard their future.
What is an ERTE?
An ERTE is a temprorary employment regulation which enables companies to make suspensions within employment contracts or reduce their working hours due to force majure, and this can be applied to partial areas of the workplace or its entirety. There is not limit regarding the duration of this regulation, as it is dependent on the amount of time that this force majure influences business activities.
What are the effects of an ERTE?
Workers would be still be a part of this company and listed with them on their Social Security, however they would not be able to receive their salary. Only those employees who can claim unemployment benefits would be able to ask for this salary, but it would only be 70% of the original payment and will accounted for within future benefits, as this is a temporary suspension and not an opportunity for compensation. “Workers will return to their positions, under the same conditions, once the ERTE has ended” says Antonio Fernandez, the professor of Labor Law at the Open University of Catalonia.
When and how is an ERTE initiated?
The employer is the one who communicates an ERTE to the Labour Authorities. The employee does not need to do anything. Labour authorities will then approve or disapprove the ERTE and analyse whether they must pay an unemployment benefit or not.
When is an ERTE finished?
There are various possibilities. When the force majure, which in this case is the coronavirus, finishes, the company can begin to suspend the ERTE and begin reincorporating its workforce. In a more negative scenario, the company can suspend this activity and conduct a collective dismissal.