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The 10 business trends in Labor Relations after Covid-19. (First part)

Companies and workers face many uncertainties and few certainties derived from a health alert that has also produced at a global level, but especially in Spain, an unprecedented economic and employment crisis and a devastating disruptive and destructive effect. A natural virus known as SARS-COV-2 has altered the lives of millions of citizens with a very negative impact on public health (sometimes lethal). Governments have had to adopt (in the case of Spain, under the legal umbrella of the state of alarm, under the provisions of article 116 of the Constitution) unprecedented restrictions on the freedoms and fundamental rights of citizens with mandatory measures of closure of economic activities, maintenance of essential sectors, restrictions of activity in other sectors and obligations of confinement of citizens. The economy and employment have remained in a situation of “induced coma” and now a new stage of “better normality” is beginning (in the words of Guy Ryder, ILO Director General) with a de-escalation of citizens that is also economic and in the so-called "Plan for the transition to a new normal" (Order 399/2020, of May 9). 

The 10 business trends in Labor Relations after Covid-19. (First part)

The figures of the impact of COVID 19 on employment: first victims. 

Global economic growth has literally plummeted. The ILO estimates that in the first half of 2020, 4,5% of working hours will be lost due to the closure of workplaces, which is equivalent to 130 million full-time jobs globally and that COVID -19 and lockdown measures around the world affect almost 1600 billion workers in the informal economy, causing a 60 percent decrease in their income. https://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/ 
documents / briefingnote / wcms_743154.pdf


The IMF points out that, in the case of Spain, annual GDP will fall by at least 8% percent; the unemployment rate can exceed 20%; and the public deficit will rise to 9,5% of GDP. For its part, EUROFOUND in a recent European survey on the impact of COVID 19 on living and working conditions in 27 States of the European Union with different parameters referring to job and income losses, financial insecurity, optimism, mental well-being or confidence in the future, which has included a sample of 85.000 workers in Europe, it shows very negative levels in the case of responses received from Spain.  https://www.eurofound.europa.eu/sites/default/files/ef_publication/ 
field_ef_document / ef20058en.pdf


The Government in Spain is cautious with data that indicate that registered unemployment rose by 8% in April to reach 3.831.203 unemployed. The faces of the employment crisis already show a closure of 10% of small and medium-sized companies; 900.000 jobs lost (which primarily affects temporary workers and those under 35 years of age); and 3,3 million workers and 500.000 companies affected by temporary employment regulation files (ERTEs), at the end of April, of which 90% would be under the force majeure formula. Likewise, the registrations of Social Security affiliates have fallen to a figure of 18.458.667 affiliates, with a loss since the beginning of COVID-19 of 947.896 employed persons. And, finally, the data on social benefits show that the economic support network reaches 6 million workers and the self-employed (including benefits and subsidies), more than 30 percent of the employed labor force.

From labor hyperregulation to interpretive collapse. 

Decree laws in the labor and economic sphere have been approved in an accelerated manner, appearing a new labor law, with a transitory vocation, which has been classified as a Right "in" the emergency (Casas Bahamonde) but it is a unilateral regulation, approved by the Government Except for the relevant exception of the recent RDL 18/2020 (not negotiated with the social agents or with the parliamentary groups) that has forgotten, with some exceptions, collective autonomy and that adds, in practical application, numerous gray areas and imperfections . The accelerated and alluvial nature of the new rules has facilitated a high efficiency to combine the extra flexibility that companies demand in the COVID-19 period to avoid a spiral of closures, bankruptcies and layoffs and job security and social protection , incorporating along the way some of the weakest groups (temporary workers, discontinuous permanent workers, domestic workers, freelancers, etc.). The linking of some labor institutions (ERTEs, telework, provision of cessation of activity, etc.) to the validity of the state of alarm and / or its extensions or modifications has also been insufficient and imperfect and has motivated new adaptations and periodic decisions of the legislator . 

In this complex context, the new labor regulations have created questions and large doses of legal insecurity for companies in decision-making, and the new business trends in labor relations derived from COVID 19 that are developed below are already in sight. 

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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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