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Everything flows; and more, Labor Law

"Labor Law must act, then, as well-designed sails and as part of the safety and protection of ships that sail unpredictable seas and arrive at fertile ports"
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Background image: The Second Vice President of the Government and Minister of Labor, Yolanda Díaz. (EFE / Javier Lizón)

On September 29, 2021, the (predictably) last of the urgent royal decrees in the socio-labor sphere related to the covid pandemic, extending the main measures associated with the special temporary employment regulation regime, that - until March 2020 - apparently hibernated figure of adjustment between the reduction in the demand for human labor and the economic needs of the people who provide that job: ERTEs.

Royal Decree-Law 18/2021, of September 28, has sought a final adjustment - within a series of legislation motorized that it has put to the test the normative capacity of the legislator and the interpretative and applicative capacity of the legal operators - for the protection of employment, and this basically through a tool partially financed with public money; that is, through the "Socialization of wages", as President Macron called it at the beginning of the health emergency, with typically French expressive and analytical lucidity, thus underlining the unimaginable of such a possibility in the face of various orthodoxies of the EU economic framework and, therefore, also highlighting the adaptive capacity of politics; because the laws, from the Constitution downwards, are not, we already know, a collective suicide agreement.

We will never forget that, almost overnight, before the certain threat of economic and social collapse of dantesque magnitudes, the world - yes, no less -, through very diverse institutions - political, scientific and economic, among others -, making use of the accumulated knowledge of past crises and the greater technological and economic capacity of humanity he has never enjoyed, coordinated efforts to try to avert a certain, grave and common danger. I know that in the initial weeks - when never before seen expenses were committed to avoid unrecoverable entropy - from institutions close to the largest centers of world power, success estimates of around 50% were handled, in any case dependent on obtaining effective vaccines and of the generation, meanwhile, of resources to withstand the pull. One of the leading experts in finance in Spain calculated, towards the end of 2020, that without the success of vaccines, continued confinement and insecurity, we had around six months before the money, as in the dreadful German inflation crisis of almost a century ago, ceased to have value.

I think it is worth it, now that we seem to see the end of this nightmare and face new challenges with no apparent solution to continuity, reflect, with deep sorrow for so many lives lost (in many cases in a terrible loneliness), but also with recognition and some satisfaction, on the ability we have had to overcome the worst of such a great challenge.

In more than a few countries we have done it, in addition - and I return now to the legal-labor regulatory field -, with a high degree of inclusive social solidarity. The star normative tool - the temporary employment regulation file - already existed in Spain, although with a very moderate use, for decades, in order to have alternatives to dismissal during crisis situations of foreseeable limited duration in time, Co-honoring temporary unemployment with income of those affected financed in a mixed way (public-private), seeking both by legal regulations and by collective bargaining the balance between the efforts and needs of employers and employees (such as non-productive expenses of those, and income and possible future unemployment benefits from these). As the T of "erTe ”indicates - absent in the name, no longer legal but still used in practice, of collective dismissals, the“ EREs ”-, this measure is effective and viable when the duration of the cause that justifies it is limited in time - hence the "T" for "temporary" - to the economically sustainable according to the concurrent parameters in each situation.

Indeed, as we learned from their practice prior to Covid-19, to extend an ERTE beyond what is foreseeable and feasible, the company reduced (when it did not eliminate) its chances of survival as a result of the sustained imbalance between expenses and income, and the workers, who had suffered the reduction of their economic resources, were frequently doomed to the loss of their job with a reduction of public unemployment benefits; for both, the consequences were dire.

The extraordinary regulation of ERTEs during the pandemic has been the effect of a situation that, although not unprecedented - similar situations, and worse, have always been suffered by humanity - it has been decided to face, for the first time in history, with sufficient knowledge, technological and economic resources, and with an inclusive and supportive political will in a dimension never seen in open economic systems. Undoubtedly, this example encourages us to imagine possible solutions that are also non-traumatic (without layoffs, or with the least possible) in future structural and transition crises, with the centrality of the regulatory institution of temporary employment regulation.

However, we cannot (and should not) forget that the maintenance of this mechanism partially financed with public resources has been at the cost of a notable increase in public debt and with an additional effort of private employers, and both charges will only be finally sustainable if the productive economy is; that is, if the companies are capable of being profitable (and it remains to be seen how many - very significantly among the small and medium-sized ones - will finally come out of the current crisis with good) and if, as an effect of the economic resources generated, we are able to cope with accumulated debt. Labor Law must act, then, as well-designed sails and as part of the safety and protection of ships that sail unpredictable seas and arrive at fertile ports; but without forgetting that the socio-labor regulations are neither the water nor the wind; It is not the economy, nor can it replace it.

Roman Gil Alburquerque

Partner of Sagardoy Abogados. Doctor of Law.

Article originally published in the El Confidencial's Fide Blog

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