Covid-19 Crisis in Spain: New Measures Approved by the Government Fight Fraud in ERTEs

24 April 2020 - Monika Bertram

On 21 April 2020, the Government approved Royal Decree-Law 15/2020, of 21 April, on complementary urgent measures to support the economy and employment. This regulation consists of, inter alia, a series of measures related to tax, corporate financing and employment protection.

Monika Bertram Abogada +34 91 319 96 86

New measures in the labour context relating to the Covid-19 crisis

The Government agreed upon, inter alia, the following measures:

  • An extension of two (2) months of the preferential nature of remote working and of the plan “MECUIDA”, recognised in Articles 5 and 6 of Royal Decree-Law 8/2020.
  • That terminations of employment relationships due to not passing the probationary period effective as of 9 March 2020 shall be considered legal unemployment situations and, as such, shall entitle the workers in question to unemployment benefits.
  • That those persons who voluntarily have left positions at companies on or after 1 March 2020 because they had a firm commitment to an employment contract with another company, shall be legally unemployed and considered as in an equivalent situation to being registered (asimilada al alta). A requirement to access unemployment benefits will be that the new company has withdrawn from the hiring in writing as a consequence of the Covid-19 crisis.

Significant penalties to avoid fraudulent benefits

In spite of the foregoing, the most surprising measure is camouflaged in the Third Final Provision of the Royal Decree-Law. It agrees on the modification of Articles 23.1.c and 23.2 of the Law on Infractions and Penalties in Labour Matters (Ley sobre Infracciones y Sanciones en el Orden Social or “LISOS”) and the addition of a section to Article 43 of the same regulation.

Consequently, the new version of LISOS, in relation to infractions in Social Security matters, qualifies as a very serious infraction and, as such, punishable with a fine varying from EUR 6,251 to EUR 187,515, “making declarations or facilitating, communicating or recording false or inexact data which result in working persons unduly obtaining or receiving benefits, as well as the collusion with its workers or with other beneficiary persons for the obtention of undue benefits or benefits higher than what corresponds in each case, to elude compliance with the obligations which correspond to any of them in terms of benefits.”

Furthermore, it is clarified that the infraction is limited to each one of the persons that has fraudulently requested, obtained or benefited from Social Security benefits, adding Article 43.3 that in the case of the infraction foreseen in Article 23.1.c, it shall be the business owner who is directly obliged to return the amounts unduly received by the working person, provided that no wilful misconduct or culpability on the part of the latter is present.

Conclusions

It is evident that said modification centres its attention on those companies which have fallaciously taken advantage of the crisis produced by Covid-19 to activate mechanisms to request temporary dismissal proceedings (ERTEs), which provide the possibility of employees affected by such proceedings to receive unemployment benefits, and in cases of ERTEs due to force majeure, to the bonification in the payment of the Social Security corporate quota.

In light of the foregoing, we see how the Government, in the middle of this health crisis linked to a state of alarm in force since 14 March 2020, and which has been extended until 9 May 2020, continues to approve measures which intend to protect the labour market. It was evidently foreseeable that the state of alarm would last more than 15 days and that its consequences were going to be (and will be) catastrophic for the labour market. Given this backdrop, perhaps it would have been better to have compiled not only measures foreseen to make the temporary adjustment of activity more flexible to avoid dismissals or to update the penalty regime, but also measures to maintain, foment and revive hiring. And all of this not only during the state of alarm, but also after it is overcome. Let’s be reasonable: to protect de facto employment and, as such, avoid the necessity of resorting to measures which collapse the Public Service for State Employment (SEPE), it will be necessary for business owners to have the corresponding backing of the national government.

Monika Bertram Hernández
(mbertram@mmmm.es)
Abogada | Head of Labour Law