New mechanisms of internal flexibility in companies to avoid dismissal entered the Spanish labour market playing field

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On 30 December 2021 Spain introduced new labour market flexibility to avoid dismissals and meet the needs of businesses during the Covid-19 pandemic. By making these flexibility measures more accessible to companies outside of events like Covid-19, it is possible to reduce the cost of business in times of crisis. This means that dismissals and redundancies can hopefully be avoided.

When can the new measures apply?

The new laws formalise these arrangements so that companies may invoke them where there are economic, technical, organizational and/or production reasons (ETOP) or where force majeure provisions apply.

What are these flexibility measures?

The measures are: (1) a temporary employment adjustment (Expedientes de Regulación de Empleo”), known in Spain as "ERTEs") and (2) an employment flexibility and stabilisation mechanism (known in Spain as “RED”).

What do the new measures do?

Companies that provide training activities to employees included in the ERTE scheme are entitled to deductions from social security contributions and credit for financing.  The aim of the measures is to improve the professional skills of affected employees and enhance their employability. These mechanisms also allow companies to seek to reduce working hours and the suspension of employment contracts in certain cases. The new law also introduces a streamlined application procedure to expedite access to the new measures.

What action is required?

For more detailed information on accessing the news flexibility measures please contact our member firm contact who will be pleased to help you (see below).

Relevant Law and Ruling

• Royal Decree-Law 32/2021, 28 December, on urgent measures for labour reform, the guarantee of employment stability and the transformation of the labour market
• Art. 47 and 47 bis of the Workers' Statute

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This article was produced by  Enrique Ceca Gómez-Arevalillo – Partner, at Ceca Magán Abogados, Spain, a CELIA Alliance member firm. For further information or if you have any queries relating to the content of this communication, please contact us. CELIA Alliance CELIA Alliance members are identified here. Members of the CELIA Alliance are each independent law firms and do not practice law jointly with any other member of the CELIA Alliance. "CELIA Alliance" and "CELIA" are not trading names. For more information about the CELIA Alliance click here. Disclaimer Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this newsletter. For further legal information click here. Circular 230 disclosure To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Copying If you would like to copy or otherwise reproduce this article then you may do so provided that: (1) any such copy or reproduction is for your own personal use or if it is made available to any third party it is done so on a free of charge basis; and (2) the article is reproduced in full together with the contact details, disclaimer and any logos as they appear on each article.