The new normality with enlargement of the ERTE employment files.

30 June, 2020

Last Saturday, the Royal Decree-Law 24/2020, on social measures for the reactivation of employment and protection of self-employment and competitiveness of the industrial sector, was approved, which was the result of a complicated pact with the relevant social factors for the extension of the ERTE until 30 September. Many sectors are crying out for it to be extended to December, or even beyond, but the public economic effort, which already seems today to be working the miracle of the loaves and fishes, is not enough. But there are no miracles, and this effort will take its toll on us for a long time to come.

New conditions

The conditions for this extension are no longer so benevolent: the exemption from social security contributions will no longer be total, but 35% in companies with less than 50 employees and 25% in companies with more than 50 employees.

Reintegration of workers is encouraged, as in companies with less than 50 employees, employees returning to work will be exonerated from their contributions by 60%, and in companies with more than 50 employees, by 40%.

There are other reductions for other cases of impossibility of opening or reopening, but, in short, the economic fabric is encouraged to restart activities; in a country as enslaved to tourism as ours, we are in the dilemma between the resentment of those who come to us to import new infections and the need for them to bring us business. Summer is already upon us and we can only give the Covid-19 for discreet content.

Conflicts arise

With the beginning of this new normality, conflicts have already arisen, especially in the area of financial payments due, and there are already several judgments in which judges have granted exceptional deadlines and moratoriums, given the exceptionality of the situation, applying the principle of rebus sic estantibus, which we have already discussed on other occasions (which would allow the modification of the clauses of a contract when, due to the passage of time, new circumstances appear that were not foreseen at the time of its conclusion). There is even a draft amendment to Article 1258 CC (contracts are binding on what has been expressly agreed and on all its consequences), at the proposal of the former  Judge of the Supreme Court, Javier Orduña, to incorporate the rebus sic stantibus clause into this article (as is already the case in many other European countries), which seems to already have the approval of several political parties with a view to its processing in Congress.

The necessary solidarity

Parallel to this just claim, the good faith and conciliatory attitude of economic agents must necessarily intervene, because we cannot leave everything in the hands of the courts. I have already repeated that we need to make use of mediation, and of agreements that allow business to continue, without some taking advantage of a favourable position in relation to those who do not have it, since, as we are seeing, the courts themselves are in favour of applying weightings in accordance with the exceptional times we are experiencing. It is important that those who are able to stay afloat are helped to stay afloat; and not only by means of State aid, but also by means of the solidarity that the moment requires of all of us.

When insolvency is unavoidable

Those who cannot stay afloat must have at their disposal, in time and form, the fresh-start mechanisms that were put in place years ago, and which are now being adjusted, to reach the largest possible population that needs them.

As our Dean of the Barcelona Bar Association, Mª Eugenia Gay, said yesterday in La Vanguardia, ‘fresh-start mechanisms are born with the purpose of giving an incentive to good faith debtors to start again through a reasonable restructuring of their debts…’ and ‘it is essential that citizens know their rights in order to be able to exercise them’.

An extraordinary period of time has been established until 31 December 2020 so that debtors who are in a state of insolvency can apply for bankruptcy (without taking into account the general rule, which grants a period of two months to do so from the time the situation of insolvency is known – or could be known -). Therefore, there is a special period of time that must be taken advantage of, in order to obtain information, study possible solutions, and try to reach agreements with creditors, so that, if it is finally necessary to apply, it must be done with the greatest possible preparation.

So, we are at your disposal to inform you about everything you want to know about it.

If you have any questions about this article, you can use the contact area of our website to contact our team of specialist lawyers. We will be glad to answer your questions.

Juan Núñez   Lawyer

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