Agreement was reached on ERTE on Thursday.

25-06-2020

Agreement has been reached between the Spanish government and business and union representatives on an extension of ERTE to the end of September.

The current arrangements expire at the end of this month, and while it had not been a case of deadlock in the negotiations - the government has always accepted the need for an extension - there have been issues regarding the terms. These have been improved in that, for example, there will be the possibility of total workforce ERTE for force majeure in the event of there being new outbreaks of the virus. There has also been movement on social security bonuses, in other words the discounts offered to companies on their social security contributions.

The new conditions will go to a cabinet meeting on Friday for approval before the current expiry date.

A further sticking-point has been a possible extension to the end of the year. The two main employers' confederations - CEOE and Cepyme - say that work will continue to address what happens in the final quarter of the year. Otherwise, they gave the revised proposals their "unanimous support". The general secretary of the CCOO union, Unai Sordo, was also very positive in assessing the agreement, which will prevent job destruction and also demonstrate the ability of all sides to agree. "It is a good agreement, which sends a message of confidence to Spanish society."

The social security bonuses will be reduced month by month, down to 35% in September for businesses with fewer than fifty workers and to 25% for businesses with more than fifty. There has also been agreement to extend benefit for the self-employed and to establish a new subsidy for seasonal workers.

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Steve / Hace 9 days

In plain English it means that the possibility to furlough staff has been extended to September, which was, under the circumstances, a forgone conclusion. The reduction in social payments is a help but not good enough. For instance. If an employer has 10 staff at a medium salary of 1.500 per month, his social costs before this would have been around 5.000 €. He will now only have to pay 1.300 to 1.500, plus his 300. In other words 1.800 when absolutely no money is coming in. And they consider this a help to boost the economy. Some boost. Some help.

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