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The new 2021 labor reform: same board, same pieces, but different rules of the game. Second part

"A structural reform, by consensus and balanced although not without complexity"
  1. Consolidation of post-COVID ERTE (art. 47 ET; DA3 RDL32; DA39 LGSS).

The ERTE processing is facilitated by ETOP causes in companies with less than 50 workers and is included as a cause of temporary force majeure the impediments or limitations of the activity of the company by decisions of the competent public authority, including the protection of public health.

The ERTE Covid model is maintained with the following mechanisms: (i) flexible affectation or deactivation of workers based on activity alterations; (ii) prohibitions to perform HHEE; new outsourcing; or new hires; (iii) bonuses in social contributions linked to a 6-month job maintenance clause after the ERTE with individual (and not collective) penalty where it is breached and; (iv) financing of training actions. In the case of ERTE ETOP, the exemptions will be 20% and in the case of ERTE of force majeure they will be 90% conditioned in both cases to the completion of training programs. In addition, it is stated that the new ERTE regulations will not be applicable until March 1, 2022 and clarifies that the Covid ERTEs due to impediments or limitations of RDL 18/2021 will expire on February 28, 2022.

  1. The formulation of a new permanent RED Mechanism for the Flexibility and Stabilization of Employment and the reinforcement of the mechanisms for training and professional requalification (art. 47 bis ET and DA 39 and 41 LGSS).

Two modalities are contemplated with the intervention of the Council of Ministers, after consulting the social agents, so that companies request measures to reduce working hours and suspension of contracts as an alternative to dismissals in certain contexts of macroeconomic difficulty or of reconversion and productive transition or change of business models:

  1. Cyclic: when a general situation arises that advises the adoption of additional stabilization instruments with a maximum duration of 1 year.
  2. Sectorial: when in a certain sector or sectors of activity there are permanent changes that generate needs for requalification and professional transition processes between workers with a maximum duration of 1 year and the possibility of two extensions of 6 months each.

In both modalities, a consultation period with the workers' representatives must be processed and the labor authority will intervene in any case, although it is not a mandatory mechanism and prior to an ERE but merely voluntary. A social and independent unemployment benefit is recognized for workers included in a RED mechanism.

  1. The increase and individualization of sanctions and new types of offenders and the reinforcement of the ITSS's actions (Arts. 7.2; 18.2c and 40.1.c.bis of the LISOS and DA40 LGSS)

Specialties are included in the sanctioning regulations, including in the regulation the provision of an infringement for each worker in the event of non-compliance with the contracting regulations according to the types of infringement of art. 7.2 and article 18.2.c of the LISOS with a maximum penalty of 10.000 euros per worker, although it will be necessary to include some criteria for maximum graduation. In addition, new types of offenders are included in cases of non-compliance with new obligations of the ETTs and of the companies that request ERTE or the RED mechanism.

  1. The entry into force and the transitory rules (DF8 and DT 1,3,4 and 5 RDL 32).

RDL 32/2021 has come into force on December 31, 2021 except for the regulation of training contracts; fixed-term contracts; and fixed discontinuous contracts that will enter into force on March 30, 2022.

These include, among others, the following specific transitory rules for the new regulations:

  • The contracts for specific work or service and the fixed contracts of work of article 24 of the VI State Construction Agreement will be applicable until their maximum duration.
  • Fixed-term contracts entered into from December 31, 2021 to March 30, 2022 will have a duration of no more than 6 months.
  • The new forecast of limits to the chaining of contracts will apply to contracts signed as of March 31, 2022.
  • The current training contracts concluded before March 30, 2022 will be applicable until their maximum duration.
  • Collective agreements will have to adapt to the modifications of art. 84 ET within 6 months.
  1. Looking to the future: the parliamentary procedure and the modernization of the Workers' Statute and the bases of a new social contract.  

Finally, the parliamentary procedure and the foreseeable intention of the nationalist parties to impose the regional or provincial agreements to the sectorial sectors, which would break the unity of the labor market and could jeopardize the agreement with the most representative employers and unions at the state level. The regulation of collective bargaining to complete the new labor reform in important matters, among others, in matters related to the extension of the term from six to twelve months of contracts due to production circumstances, is pending evolution; sectoral plans to reduce temporary employment; the maximum percentages; the objective and formal criteria that should govern the call of permanent discontinuous workers; the sectorial employment exchanges and the maximum periods of inactivity; etc.

In any case, this labor reform has not addressed issues that did not have the necessary consensus, such as the establishment of a single contract or the austrian backpack nor has it included a bonus system or incentives for permanent hiring that can prevent the rotation of workers in temporary positions in different sectors and companies and, of course, is far from modernizing labor regulations on novel issues derived from digitization and the sustainability of labor relations.

In conclusion: although the labor reform may have a positive assessment, its effects will have to be evaluated within 2 or 3 years (it is announced by the Government for 2025!) And, especially, its impact on the reduction of the temporary employment rate and on the rotation of workers and, where appropriate, in the reduction of youth and structural unemployment (and, therefore, of sectoral, territorial and gender gaps). For the moment at least the solutions adopted seem balanced, although it will not eliminate the duality and segmentation of the labor market (in permanent and temporary and in fixed continuous and fixed discontinuous) But as a whole, it can be an ideal legal framework to maintain the current labor dynamism and create more and better jobs. And, undoubtedly, among the challenges for the future may also be the lack of work and sufficient working time for our active population in the labor market in Spain.

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About the Author

Carlos de la Torre Garcia

Carlos de la Torre Garcia

Attorney Of Counsel of the Labor Department of Baker & Mckenzie. Specialist in labor and Social Security advice for national and international clients.

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