.
Summary of the work-related measures in the Spanish Royal Decree-Law 8/2020, of 17 March
19/03/2020

Summary of the work-related measures in the Spanish Royal Decree-Law 8/2020, of 17 March

The work-related measures contained in Royal Decree-Law 8/2020, of 17 March, on extraordinary urgent measures to deal with the economic and social impact of COVID-19 may be summarised as follows:

Preference for remote working

In order to execute the containment measures set out in the applicable regulations, while guaranteeing the continuity of business operations and employment relations, priority shall be given to organisational systems that make it possible to continue with operations by alternative mechanisms, particularly by means of remote working; appropriate measures should be facilitated to make that possible.

These alternative measures, particularly remote working, must be given priority due to the temporary cessation or reduction of operations; the company must adopt appropriate measures if that is technically and reasonably possible and if the effort required to adapt is proportionate.

 

Right to adapt the work schedule and reduction of working hours

Measures are established to promote work-life balance, by giving employed workers—who can show evidence that they have caring responsibilities for dependents due to exceptional circumstances related to preventing the spread of COVID-19—the right to access the adaptation or reduction of their working hours, with the resultant proportional reduction in their salary.

Alternative rights are established such as the right to adaptation, rather than being absent for the whole day, which may generate fewer adverse effects for both the worker and for the company itself.

This model, which is beneficial for the worker, is a consequence of the fact that they are not going to receive any remuneration or benefit during the emergency. That means that they will have to request preferentially to adapt their working hours, which allows them to keep their job and their remuneration, or low-intensity reductions to lose the minimum amount of their remuneration.

It may consist of a change of shift, alteration of schedule, flexible schedule, split shifts or continuous shifts, change of work centre, change of duties, change in the way work is done, including remote working, or any other change of conditions that may be available at the company or which might reasonably and proportionately be implemented, taking into account the temporary and exceptional nature of the measures set out in this regulation, which is limited to the exceptional period for which COVID-19 lasts.

The special working hours reduction must be notified to the company with 24 hours’ notice, and it may reach one hundred per cent of the working hours if necessary. In the event of reductions to the working hours that reach 100%, the worker’s right must be proven and be reasonable and proportionate according to the company’s situation.

 

Extraordinary benefit due to cease of operations for those affected by the declaration of the state of alarm to manage the health crisis caused by COVID-19

Emphasis is placed on the case of sole traders, who are particularly affected by the current situation; an extraordinary benefit due to cease of operations is created, which covers the end of the operations caused by a situation that is at all events involuntary.

As an exceptional measure, the validity of which shall be limited to one month, as from the entry into force of Royal Decree 463/2020, of 14 March, declaring a state of alarm to manage the health crisis caused by COVID-19, or until the last day of the month in which said state of alarm ends, if it lasts for more than one month, self-employed workers or sole traders whose operations are suspended, according to the provisions of said Royal Decree, or, otherwise, when their income in the month prior to that for which the benefit is requested is reduced by at least 75 per cent compared to the average of their income for the previous half-year period, they shall have the right to the extraordinary benefit due to cease of operations regulated in this article, as long as they meet the following requirements:

  1. Be covered by and registered with, on the date the state of alarm was declared, Spain’s Special Social Security System for Self-Employed Workers or Sole Traders.
  2. In the event that their operations are not directly suspended according to the terms of Royal Decree 463/2020, of 14 March, they must show proof of a reduction in their income of at least 75 per cent compared to the previous half-year period.
  3. Be up to date with the payment of their Social Security contributions. However, if on the date on which the operations are suspended or on which the income was reduced, this requirement were not met, Social Security shall invite the sole trader to pay the contributions owed within a non-extendable period of thirty calendar days. The payment of this overdue amount shall entitle the party concerned to acquire full rights to the protection.

The amount of the benefit shall be determined by applying 70 per cent of the calculation basis. When no proof is shown of the minimum contribution period to enjoy the right to the benefit, the amount of the benefit shall be equivalent to 70 per cent of the minimum contribution base in the Special Social Security System for Self-Employed Workers or Sole Traders.

The extraordinary benefit due to cease of operations regulated in this article shall last one month and be extended, where appropriate, until the last day of the month in which the state of alarm ends, in the event that it is extended and lasts more than one month. It shall be understood that contributions have been made for the period for which it is received, and it shall not reduce the benefit periods due to cease of operations to which the beneficiary may be entitled to in the future.

It shall be for mutual insurance companies that collaborate with Social Security to manage this benefit.

 

Exceptional measures in relation to the procedures to suspend contracts and reduce working hours due to force majeure

The contract suspensions and reduction in working hours that are directly caused by loss of activity as a consequence of COVID-19, including the declaration of a state of alarm, involving the suspension or cancellation of operations, temporary closure of premises frequented by the public, restrictions on public transport and, in general, on the mobility of people and/or goods for which proof may be duly shown, shall be considered to be caused by force majeure.

In the event that the company decides to suspend contracts or temporarily reduce working hours on the basis of the foregoing, the following special requirements will be applied:

  1. The procedure shall begin with the company making an application, which shall be accompanied by a supporting Report concerning the link between the loss of activity and the corresponding supporting documentation. In those cases in which the work centres belong to a sector included in Royal Decree 463/2020, declaring a state of alarm to manage the humanitarian crisis caused by COVID-19, it shall suffice to submit any document that proves that fact.
  2. The company must notify the workers of its application and send the foregoing report and the supporting documentation, if any, to their representatives.

Another document will detail the period during which the ERTE (temporary lay-offs) will last (From…- Until…) and the company’s operations according to the list at the end of this document.

  1. The existence of force majeure, as the grounds for suspending the contracts or reducing the working hours set out in this article, must be recorded by the employment authority, regardless of the number of people affected.
  2. The employment authority’s ruling shall be issued within five days of the application, after considering, where appropriate, a report drafted by the Inspectorate of Work and Social Security and it must limit itself to recording the existence, where applicable, of the force majeure claimed by the company; it shall be for the latter to decide on implementing measures to suspend the contracts or reduce working hours, which shall take effect from the date of the event that gave rise to the force majeure.
  3. d) The Inspectorate of Work and Social Security report, applying for which shall be at the discretion of the employment authority, shall be issued within a non-extendable period of five days.

It should be stressed that in those cases in which an ERTE due to force majeure cannot be carried out, an ERTE on financial, technical, organisational and production grounds should be processed, following the same procedure, even if the period for executing it is extended to 5 days, it shall not have the immediacy of the ERTE due to force majeure set out in this Royal Decree-Law, though it may be applied retroactively.

 

Extraordinary measures concerning contributions in relation to the procedures for suspending contracts and reducing working hours due to force majeure related to COVID-19

In the contract suspension and working hours reduction plans authorised on the basis of temporary force majeure related to COVID-19, the General Treasury of Social Security shall exempt the company from paying the company contribution, as well as from making payments related to joint collection items, while the contract suspension or working hours reduction period authorised on said grounds lasts, where the company, as of 29 February 2020, had fewer than 50 workers registered with Social Security. If the company had 50 or more workers registered with Social Security, the exemption from the obligation to pay contributions shall be 75% of the company contribution.

Said exemption shall not be applicable to the worker; said period shall continue to be counted as a period during which contributions had been made for all purposes.

The exemption from the contributions shall be applied by the General Treasury of Social Security at the request of the business owner, after notification is given of the identification of the workers and the period of the suspension or reduction in working hours.

 

Extraordinary measures in the area of unemployment protection

Given the extraordinarily serious situation, this decree-law strengthens coverage to the workers affected by an ERTE, making it possible for them to have access to the contributory unemployment benefit, even if they have not paid contributions for long enough to access it and. Furthermore, the contract suspension or working hours reduction period during which they are receiving said benefit does not count for the purposes of consuming the maximum periods during which they may be received according to law. In normal circumstances, during an ERTE, the worker may access the contributory unemployment benefit if he/she has made contributions for the time necessary to access it and, moreover, this period counts for the purposes of the maximum period for receiving the benefit.

The duration of the benefit will last until the end of the contract suspension or temporary working hours reduction period from which it is derived.

 

Temporary limitation on the effects of late submission of applications for unemployment benefits

During the period in which the extraordinary public health measures are in force that have been adopted by the authorities to combat the effects of the spread of COVID-19 (limitation on the movement of citizens or limitations concerning the operation of public services), the submission of applications for initial registration or renewal of the benefit and unemployment assistance made after the deadlines set out in law shall not entail a reduction in the duration of the right to the corresponding benefit.

 

APPENDIX. LIST OF OPERATIONS

  1. Museums.
  2. Archives.
  3. Libraries.
  4. Monuments.
  5. Public shows.
  6. Amusement and entertainment.
  7. Cafe-show.
  8. Circuses.
  9. Exhibition premises.
  10. Night club.
  11. Restaurant-show.
  12. Other premises or facilities comparable to those mentioned.
  13. Cultural and artistic: Auditoriums, Cinemas, Squares, premises and bullfighting facilities.
  14. Other premises and facilities: Conference halls, Concert halls, Conference rooms, Exhibition halls, Multipurpose halls, Theatres.
  15. Sports: Venues or enclosed venues; football, rugby, baseball and comparable fields; basketball, handball, volleyball and comparable courts; skeet shooting, clay pigeon shooting and comparable; shooting galleries; tennis and comparable courts, skating, ice hockey, roller hockey and comparable rinks; swimming pools, boxing, wrestling, judo and comparable venues; permanent motorcycle, car and comparable tracks; velodromes, racecourses, greyhound tracks and comparable; fronton, pelota, squash and comparable courts; sports centres, bowling greens and comparable; billiards and comparable rooms; gyms, athletics tracks, stadiums, other premises, facilities or activities similar to those mentioned.
  16. Open spaces and public thoroughfares: Foot racing tracks; cycling, motorcycling, car and comparable racing tracks; motocross, trial and comparable tracks; nautical races and shows; aeronautical races and shows; other premises, facilities, and activities that are similar to those mentioned above.
  17. Recreational dance activities: Discos and dance halls, Youth centres.
  18. Recreational activities, Recreational sports: Premises or venues, without spectators, open to the public for sport and recreation, in any form.
  19. Games and gambling: Casinos, gambling and games of chance establishments; gaming rooms, recreation rooms, raffles and draws; other premises and facilities comparable to those used for recreational gaming and gambling according to the sectoral regulations regarding gambling, specific gambling venues.
  20. Cultural and leisure: Theme parks, fairs and comparable; water parks; stalls at fairs; zoos; children’s playgrounds.
  21. Open grounds and public thoroughfares: Open-air festivals, parades and popular festivals or folklore events.
  22. Leisure and entertainment – Special bars: Bars without live music, Bars with live music.
  23. Leisure and entertainment – Hospitality and restaurants: Taverns and wine bars, cafes, bars, café-bars and comparable; chocolaterias, ice cream parlours, tea rooms, croissanteriesand comparable; restaurants, self-service restaurants and comparable; bar-restaurants, hotel bars and restaurants, except to serve guests; banquet halls; terraces.
  24. Face-to-face educational activity in all centres and at all stages, cycles, degrees, courses and educational levels, including university education, as well as any other educational or training activities taught in other public or private centres.
  25. Retail premises and establishments.

 

Gutierrez Pujadas & Partners is an international tax and accounting firm based in Barcelona, with a boutique mindset and specializing in international taxation, family offices and holding companies.