Coping with COVID-19 in Spain: new help for employers and employees

The Spanish government has approved four pieces of legislation to deal with the coronavirus outbreak:

1. Royal Decree 463/2020, of 14 March, declaring the state of alarm for managing the health crisis caused by COVID-19; 
2. Royal Legislative Decree 8/2020, of 17 March, on urgent and extraordinary measures in order to confront the social and economic impact of COVID-19; 
3.  Royal-Decree-Law 9/2020, of 27 March is meant to complement and clarify the rules of the prior Royal Decree-law 8/2020; and
4. Royal-Decree-Law 10/2020, of 29 March, which provides for a mandatory recoverable paid leave for any employees who are not engaged in essential activities.

Below we summarise the main employment measures of this new COVID-19 legislation.

Preference for remote working

The COVID-19 legislation states that companies should maximise home working.

To do so, the company must provide employees with the necessary tools for these purposes, provided it is feasible and reasonable.

Adjusting working time

The COVID-19 legislation gives employees taking care of a relative the right to request an adjustment to their working time or a reduction in their working hours of up to 100 per cent of their normal working hours.

Adjusting working time includes changing changing their working hours/shifts and asking for home working, if this is feasible.

While it’s for the employee to decide the details of their new working arrangement, the request must be justified and reasonable. The employer will have limited grounds to reject such requests.

If the employee reduces their working hours, their pay should be reduced accordingly (ie up to a 100 per cent salary reduction).

The employee must give the employer at least 24 hours' notice of a change in their working-time arrangements.

Temporary suspension of employment by the employer

Temporary layoffs or temporary reduction of work hours – force majeure

The COVID-19 legislation allows for the suspension of employment agreements or the reduction in working hours as a result of force majeure.

However, this requires prior approval from the authorities, which must be given (or rejected) within five days. The whole process may take between one and two weeks.

The COVID-19 legislation specifies that employment contract suspensions or working time reductions directly caused by COVID-19 will be considered force majeure for these purposes.

During the period of suspended employment, the employer is not obliged to pay any salary to the employee. The employee is entitled to unemployment benefits only. 

If working hours are reduced, the employee is entitled to receive the unemployment benefit pro rated to the reduction in work hours.

The procedure to access unemployment benefits is clarified and simplified, so that companies which are implementing temporary suspensions of employment will take care of the application for their employees.  The benefit will apply from the date of the suspension, or the date of communication to the authorities.

The COVID-19 legislation also offers social security benefits to: companies with under 50 employees will not need to maintain the contributions for the employees. Companies with 50 or more employees will have an exemption of 75 per cent of those contributions.

Employment contracts’ suspension or work hours reduction – ETO grounds

There is an alternative procedure for the implementation of employment contract suspensions or temporary working-time reductions based on economical, technical or organisational (ETO) reasons. 

This does not require prior approval, but it does need preparation of documentation and prior consultation with employees’ representatives (regardless of the number of individuals affected), which is reduced to seven days (although it is possible to reach an agreement prior to that date). Furthermore, the legislation provides a reinforcement on the monitoring and control mechanisms of the grounds argued for any temporary suspensions, in order to avoid fraud.

The whole process may take between two and three weeks, depending on how negotiations progress with employee representatives.

In both cases, there is no mandatory severance payable, although some ETO suspension agreements have some sort of payment to top up unemployment benefits.

The company must continue making social security payments during the suspension period.

The legislation also provides that the suspension of any fixed-term agreements under temporary suspensions of employment shall imply the suspension of the term of the relevant agreement

Prohibition of redundancies for ETO reasons linked to Covid-19

The flexibility offered in the relevant processes for suspension of employment by employers requires that the employer commits to maintaining employment (ie make no redundancies) for the six months following the end of the state of emergency.  The government considers that the flexibilization of the rules on temporary suspension of employment is there for those purposes, and therefore redundancies on for ETO reasons linked to Covid-19 will not be justified and considered unfair.

Mandatory recoverable paid leave

With the aim of limiting movement of individuals as a way to mitigate the spread of the virus, through the Royal-Decree-Law 10/2020, of 29 March, the government has introduced mandatory recoverable paid leave for any employees who are not engaged in essential activities.  The main features of this legislation are as follows:

• Employees providing services for companies whose activity has not been stopped by the legislation on the State of emergency (Royal Decree 463/2020, of 14 March) shall be put on a recoverable mandatory paid leave between 30 March and 9 April 2020, both inclusive.
• The legislation includes several exceptions for essential activities (as defined in the legislation), including those in charge of food and health industries, and all supplies associated to those, the army and public and private security bodies, and specific activities within other businesses.
• It does not apply either to employees who are homeworking, those on sick leave or whose agreement is suspended under the law, or those affected by temporary suspensions of employment, but it does apply to employees whose employer has cut working time, rather than suspend employment, for the time they were meant to work.
• During the paid leave the employee will remain entitled to his/her full salary.
• The hours which are now paid but not worked should be recovered by 31 December 2020.  For these purposes, the employer must consult with the employees’ representatives (or with a special negotiating body if there were none).
• Companies that must apply the mandatory recoverable paid leave set out above may, if necessary, set out the minimum number of staff of the working shifts that may be strictly essential to maintain indispensable activity.