Business 28/09/2021

Furlough to continue until 28 February 2022

Spanish government, unions and employers reach agreement to extend scheme

3 min
Ministers José Luis Escrivá and Yolanda Díaz at the presentation of the latest agreement to extend the ERTE.

BarcelonaOnce again, dialogue between government, unions and employers has borne its fruit at the very last minute. An agreement has been reached to extend the furlough scheme (ERTE) until 28 February 2022. After many modifications, the final text has the approval of trade unions UGT and CCOO, which have a very "positive" opinion of the text proposed by the Spanish government, as well as employer associations CEOE and Cepyme, which have also ratified the proposal. The measure is expected to be approved by the cabinet today.

The current furlough scheme – which expired on Thursday, September 30 – will be extended throughout the month of October, until the 31st, under the same conditions. Then, from November 1, a new scheme will come into force, lasting until February 28, 2022, i.e. one month after it was originally planned.

The October extension was agreed so that companies have time to apply for the new ERTEs, since the extension, unlike last time, will not be automatic. The companies that want it will have to go through the bureaucratic process again before the administration, which will have to answer within a fixed period of a few days. Ultimately, the administrative silence will be positive, i.e. iif there is no answer from the administration, the request is considered granted. In November, however, the conditions will change and the new scheme will come into force.

Training workers

Up until now, the main obstacle in the negotiations had been linking reductions in companies' social security dues to worker training. In spite of the fact that throughout the negotiation this option had raised misgivings on the part of unions and employers, the Spanish government has pushed ahead.

Companies with reduced activity who put their workers on furlough will benefit from a 40% reduction in their Social Security payments. If, however, they offer their workers training, they may enjoy an 80% reduction in fees. This will require a minimum of 30 hours' training in medium companies (10 to 49 workers) and 40 hours if they have larger workforces. For smaller companies (with under ten workers), exemptions will reach 50% without training and 80% with training. In the case of companies which are forced to close temporarily, the exemptions for all companies would be 100% in all cases, according to the proposal put forward by the government

In this new agreement, the unemployment protection for workers on furlough will be maintained at 70% of the regulatory base, as at present. The final text also establishes that workers will not use up their unemployment regular benefits when on furlough. In addition, according to trade union sources, companies will be banned from firing workers in the six months after having profited from the furlough scheme and neither may workers do overtime nor new workers be hired as long part of the companies' workforce are on furlough. In addition, the Spanish government, the unions and employers have also agreed on a specific furlough scheme for the Canary Islands, specifically for all companies affected by La Palma volcano.

The self-employed

In addition, the Ministry of Social Security has agreed to maintain the aid for self-employed workers with low incomes until February 2022, after the ministry led by José Luis Escrivá reached an agreement with self-employed organisations ATA, UPTA and Uatae. The beneficiaries will have to prove an income of under 75% of the minimum wage and the amount of aid will be equivalent to 50% of the contribution base. At the moment, the organisations estimate that some 141,000 self-employed workers will receive this extraordinary aid.

Negotiation

In fact, the second vice president of the government and Minister of Labour and Social Economy, Yolanda Diaz, said on Monday that the latest document submitted by the executive to employers and unions brought positions "much closer". The central government proposed to social partners a new scheme that offers more exemptions from Social Security payments to companies that invest in training for workers on furlough.

"We are working, and we have been working all weekend to close an agreement, and the latest document brings the positions much closer," she explained in an interview to Cadena SER. "We chose to offer training in companies with over 10 workers not only to defend them, but retrain them if necessary sp they have a door open to other productive sectors," she remarked.

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