Spanish government set to extend furlough schemes for one year

The current system sees the Spanish state pay workers around 70% of their regular salary and prohibits companies firing people. [Shutterstock/Alexandre Rotenberg]

The Spanish government has proposed to extend temporary lay-off schemes. This system has significantly protected thousands of jobs endangered by the pandemic, only for one extra year. EURACTIV’s partner EFE reports.

Taken across the whole of 2020, a total of 3.6 million Spanish workers from 550,000 companies – mainly small and medium-sized businesses (SMEs) – have benefited from the scheme, known in Spanish as ERTEs (Expediente de Regulación Temporal de Empleo), EFE reported.

The current system sees the Spanish state pay workers around 70% of their regular salary and prohibits companies firing people.

In case of fraud or redundancies, companies must return exemptions from contributions to the social security system and risk heavy penalties. Those benefiting from the ERTE schemes are officially considered employed.

A new mechanism to protect employment

Last week, the left-wing Spanish government proposed replacing the current ERTE system with an Employment Sustainability Mechanism (Mecanismo de Sostenibilidad del Empleo, MSE) for a maximum of one year if an agreement is reached with the workers’ representatives, and only for six months if there is no agreement.

This week, labour minister, Yolanda Díaz (Unidas Podemos), will meet the country’s main trade unions – Comisiones Obreras, CC.OO, and Unión General de Trabajadores, UGT- and with the primary employers association (CEOE) to discuss details of the new furlough scheme, likely to be implemented as of January 2022.

According to the text of the draft proposal, as seen by financial daily Cinco Días, Spanish companies will be able to implement the new post-pandemic temporary lay-off schemes only if they can prove that they have suffered heavy economic losses and if they have been forced to re-train their workers with new skills and competences to keep their jobs.

Strict conditionality

The text reads that Spanish companies and workers affected by one of these new schemes will have access to “benefits in terms of contributions and unemployment protection.”

Benefits in terms of company contributions to the Social Security will be conditioned on the maintenance of the employment of the affected workers until six months after implementing the new furlough scheme.

Exemptions to social security contributions will be conditioned on the development of training programmes. If the mechanism is applied in the process of professional transition to other companies or sectors, the outplacement of at least 20% of the affected workers must be guaranteed, official sources told Cinco Días.

Likewise, overtime, outsourcing of activity and new recruitments will be banned during the implementation of the new scheme.

The document also proposes limiting the weight of temporary contracts in structural positions to 15% of the workforce as a measure to limit temporary employment, which currently stands at 25%. 

[Edited by Alice Taylor]

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