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Are companies being watched over or strangled?

| News | Employment Law and Social Security

Alfredo Aspra analyses the initiatives taken by the Government to curb the economic impact of the Covid-19

Royal Decree 10/2020, which regulates paid leave, maintains that since the declaration of the state of alert last March 14, initiatives have been adopted to "watch over the companies that are affected by the economic and productive impact derived from the Covid-19". It also referred to some of the drafts for which that business organisations would have been consulted. Important nuance, that would have been consulted, but not agreed. Is anyone really worrying in a slightly serious way about the situation in which some companies are in, and to which many others will be dragged? Is it reasonable to totally shift the salary and social security costs to the companies during the next 11 days under the mentioned permit?

What about the decision to restrict the possibility of going to ERTE due to force majeure, despite the objective circumstances of loss of productivity and alarming decrease in income? Why is the exemption from contributions not applied in ERTE due to economic, organizational and productive causes related to Covid-19? In the face of a temporary situation of extreme urgency and need, why are the ceilings on the amounts of unemployment benefits being paid by the government not removed to prevent many companies from being forced to supplement wages during the ERTE?

Even more strikingly, why are the companies that maintain the highest volume of employment, mostly applying formulas of great responsibility and solidarity, not treated equally or even better legislatively, understanding as such companies with up to 50 employees?

On top of that, in addition to the cost to be borne by the companies for paid leave, the aim is to restrict mobility without the express wish of the company, in the event that the companies do not wish to use internal flexibility mechanisms (basically ERTE or irregular distribution of the working day), On the fateful Saturday we had breakfast with another labour regulation in the BOE, the Royal Decree-Law 9/2020, which prohibits dismissals tied to force majeure causes related to the Covid-19, not all types of terminations, or introduces elements of as much insecurity as muddle, such as interrupting the term of temporary contracts affected by contract suspensions under the aforementioned Royal-Decree law. Time will tell, I fear, whether the much-vaunted urgency and necessity will allow decisions to be taken that could challenge such basic rights as the freedom of enterprise enshrined in the Constitution or the Treaty on the Functioning of the EU.

Review of applications

Without forgetting, of course, the pearl introduced in the Second Additional Provision of the Royal Decree-Law 9/2020, a sort of general warning so that, during a period of no less than four years, the companies can see their ERTE applications reviewed and, if it is considered by the competent labour authority, for understanding that such application would not have been made in accordance with the norm, under interpretation criteria as subjective as ". ...the conduct of the company consisting of requesting measures in relation to employment that are not necessary or have insufficient connection with the cause that gives rise to them...", will also be punishable, in accordance with the provisions of the said regulation, by all types of sanctions and the return of benefits.

I continue to call for the need to legislate exceptional and temporary measures that are equal to the circumstances and in line with countries such as the United Kingdom, where the government is supplementing 80% of companies' wage costs, or Germany, with almost 70% of aid, the Netherlands or Portugal, with equally attractive percentages.

If we really want to protect companies and employment, we should promote temporary and extraordinary measures, but really effective ones such as: 1) exempting companies from their quotas or a large part of them in situations of ERTE due to economic, organizational and productive causes related to Covid-19, not only force majeure; 2) establishing public benefits that alleviate a large part of the salary without the current limits (between 671 and 1,411/month), 3) facilitate deferral of social security contributions without penalty and through a simple and agile procedure; or 4) make it possible to recover paid leave during 2020 in a more flexible and realistic manner so that companies can actually recover that production and lost income. In short, a true welfare state.

You can read the full article in Expansión

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