The Temporary Employment Regulation Files or TERF (ERTE in Spanish) are measures for the regulation of employment by companies. Measures included in the Workers’ Statute (articles 45.1.i, 47.3, 51.7) and in RDL 1483/2012 (articles 25,31,32,33).
This regulates the procedures for collective dismissal, suspension of the work contract or reduction of the working day.
In the case that applies to us now derived from the declaration of the state of alarm for the coronavirus epidemic, we talk about:
- Suspension of the work contract or reduction of the workday (ERTE) for economic, technical, organizational or production causes, or those derived from force majeure (TERF for force majeure)
The experts of our Labor Consulting Department clarify some of the most common doubts at this time:
Temporary Employment Regulation Files or TERF
Let’s try to answer the most common questions we may encounter:
When are these procedures followed?
The TERF by major force require the monitoring of a certain procedure in which the labor authority intervenes. That is the guarantor of the fulfillment of all the requirements established by law, who will verify the cause or not AUTHORIZING the application of the TERF.
Which is the Administrative Authority before which they have to be presented?
In principle, it is the Autonomous Community. However, there are different cases depending on where the work centres are located:
- All the work centres are in the same Autonomous Community, the body determined by the respective Autonomous Community. In the case of uniprovincial Autonomous Communities, the Government Delegation. Sub-delegation if it is in a single province within the Autonomous Community.
- The work centres are distributed in several Autonomous Communities.
- Exception: If 85% or more of the staff is located in the same Autonomous Community, then it will be the competent body of that Autonomous Community.
What types of TERF exist?
There are two types:
- Suspension of employment contracts. Absence from work for complete reference periods. Whether it is a day, week or month in a row or alternately.
- Reduction of working hours. Less hours per day are worked between 10% and 70% on a daily, weekly or monthly basis. But it is not applied by means of full days.
How do you apply for an ERTE?
The procedure will be initiated by a request from the company, accompanied by the means of proof it deems necessary.
Previously, a communication will be issued to the legal representatives of the workers, who will have the condition of interested party in the whole procedure. If there is no legal representation, it will be an individualized communication that will be attached to the documentation.
The competent Labour Authority may obtain a report from the Labour and Social Security Inspectorate. And it may carry out and/or request any other actions or reports it considers indispensable. It may even hear employees within 1 day of the communication of the request.
The Labour Authority will issue the decision within five days from the request. It must limit itself to verifying the existence of the major force alleged by the company. Therefore, it is up to the company to decide on the termination of the contracts, which will take effect from the date of the event causing the force majeure.
The company must inform the workers and the labour authority of this decision.
Temporary Employment Regulation Files. ERTE. Effects
Here we have to distinguish between the effects on companies and on workers.
Effects and obligations for companies.
- The obligation to pay and to work is suspended in full or in part, as the case may be.
- It affects the accrual of holidays. Since during its application these are not accrued. And in the case of a reduction, it causes a decrease in their remuneration.
- A request can be made to the General Treasury of Social Security for an exemption of up to 100% of the payment of the business contribution during the unemployment situation. And it will have a maximum duration of 12 months, which in turn can be extended for another 12 months under certain circumstances.
- In no case will the exoneration be recognized when more than 3 months have passed between the date on which the event of force majeure occurred and the request.
- The company is obliged to pay 100% of its Social Security contributions.
- There is one exception. This is when an area is expressly declared to be seriously affected.
- The company will promote during suspensions/reductions the development of training activities linked to the professional activity of the workers.
Effects and obligations for workers.
Workers have the right to apply for unemployment benefit:
- In case of suspension of the work contract. The workers will be in a legal situation of unemployment for the purpose of processing the benefits before the S.E.P.E.
- If it were for a reduction in the working day, the workers affected will also be in a legal situation of unemployment for the reduced time.
- We will have to wait for the Council of Ministers if it is confirmed that they will be counted as a benefit consumed.
Whatever your case may be, do not hesitate to contact us for any need.