Force majeure and the grounds for suspension of contracts due to Covid-19 cannot be regarded as justifying dismissal
Spain Labor Alert
Royal Decree-Law 9/2020, including a number of additional measures to Royal Decree-Law 8/2020, has been published and contains provisions on the application process for unemployment benefit, the monitoring of temporary layoffs (ERTEs) or the tolling of terms of temporary contracts.
Royal Decree-Law 9/2020, of March 27, 2020, adopting additional measures, in the field of employment, to soften the effects of Covid-19, sets out, among others, the following employment measures:
Extraordinary measures for the protection of employment: force majeure and the economic technical, organizational and production-related grounds justifying the temporary layoffs (ERTEs) allowed in article 22 and article 23 of Royal Decree-Law 8/2020, due to Covid-19, cannot be regarded as justifying the termination of employment contracts or dismissal.
Measures for speeding up the application process and payment of unemployment benefit: the procedure for acknowledging contributory unemployment benefit in temporary layoffs due to Covid-19 is commenced by the company filing a collective application.
Tolling of the term of temporary contracts: the suspension of temporary contracts, including training, hand-over and relief contracts, on the grounds for temporary layoffs due to Covid-19 will mean that the terms of these contracts will stop running, as well as the periods of reference equal to the suspended period.
Restriction on the length of layoffs (ERTEs) based on Covid-19 due to majeure: they cannot go beyond the period that the extraordinary situation caused by Covid-19 is in place, meaning therefore that their maximum length will be until the end of the state of emergency decreed by Royal Decree 463/2020, and any potential extensions (in the case of an express decision, and by silence, and regardless of the contents of the employer’s specific application).
Penalty regime and return of incorrect benefits: penalties will be levied for applications filed by companies that contain misstatement or incorrect information and practices consisting of applying for measures, in relation to employment, that do not prove necessary or are not sufficiently connected with the ground for them, and which give rise to the generation or receipt of incorrect benefits. Incorrectly granting benefits to workers for reasons not attributable to them, as a result of any of the breaches mentioned above, will give rise to a review commenced by the authorities of the decision granting those benefits.
In these cases, in addition to any administrative or criminal liability determined by law, the company will have to pay over to the managing entity any amounts received by the working person, and deduct them from the unreceived wage payments to which they would have been entitled, to the extent of the sum of those wage payments.
Where the entity managing unemployment benefits finds any indication of fraud for obtaining the unemployment benefit payments, it will notify the labor and social security inspection authority, which, for its part, will include, among its plans of action, examining the existence of the grounds submitted in the applications and notifications of temporary layoffs based on Covid-19.
Term: the royal decree-law comes into force on its publication date in the Official State Gazette and will remain valid while the state of emergency is in place and any potential extensions.