Negotiations to extend Spain's furlough scheme begin on Friday

At the end of November 2020, almost 750,000 people were furloughed, which is a lot less than the 3.4 million out of work in April.

Labour & Social Economy Minister, Yolanda Díaz, has already announced that she will summon a meeting after the Three Kings Day holiday to address negotiations and CCOO Leader Unai Sordo has confirmed that talks will get underway on Friday.

The Government, Unions and Employers agree that the furlough scheme is still needed, especially for Sectors such as Tourism, Hospitality and Commerce.

A few weeks ago the Government expanded the number of “ultra-protected” Sectors, to include Wholesale & Beverage, Restaurants & Food Stalls, Botanical Gardens, Zoos and Nature Reserves, Bars and Gambling & Betting activities, including casinos, bingo halls and lotteries.

The current furlough regulation is in force until January 31 and employers have been pushing for an extension until the official end of the State of Emergency in Spain on May 9. The Labour & Social Security Ministries insist that there is no deadline and that it will be maintained for as long as necessary.

Previous negotiations to extend the furlough regulations until the end of this month were tough because of differences between the Employer's Association and some members of the Government regarding which Sectors should be protected.

The decree approved at the end of September automatically extended the procedures for force majeure until January 31 for certain Economic Sectors.

Force majeure ERTEs with automatic extension are limited to the companies most affected by the pandemic whose activity is classified in one of the codes of the National Classification of Economic Activities, or CNAE-09, with exemption quotas of between 75% and 85%. These exemptions can also benefit companies that are not part of the Sectors but are in their value chain or whose business depends on them.

The decree also created two options which all companies from any Sector can take advantage of:

ERTE due to activity impediment as a result of restrictions adopted by the authorities, such as nightlife companies.

ERTE of activity limitation, aimed at companies that see their activity altered by Local, Regional or State Authority limitations to their capacity and/or hours.

The activity limitation ERTEs are accompanied by quota exemptions of 70%-100%, whilst the activity impediment ERTEs include exemptions of 90%-100%.

It’s not clear whether this ERTE scheme will be maintained in the new extension or if there will be more changes in the list of CNAE activities, but in view of the actions taken by Autonomous communities to stop contagion, workers and companies affected by limitations and impediments to their activity will need to be protected.

New ERTE

According to Social Security data, 746,900 workers were furloughed at the end of November, which is 18,487 more than October 31 and 40,650 more than September 30.

The Ministry detected a "transfer" of ERTEs to the new schemes included in the new ERTE extension until January 31, 2021.

So, at the end of November 326,296 belonged to the ‘old’ ERTE, which is 379,954 fewer than at the end of September and 420,604 belonged to the new ERTE, with special exemptions for ultra-protected Sectors and coverage for companies affected by the administrative restrictions.

218,380 of those people belong to ultra-protected Sectors, including 167,917 that correspond to the CNAE list agreed in September and 50,463 to companies in its value chain.

79,232 are in an impediment ERTE and 117,064 are in an ERTE of activity limitation.

The implementation of the new protection schemes has resulted in a greater Sectoral concentration of protected workers with 60% of those included in the new ERTE modalities belonging to the Food & Beverages Services Sector or Accommodation Services.

Both sectors had 330,979 workers in the new ERTE in November, with 45% of all workers included in these protection systems, compared to 35% at the end of September.

The variation in use of this protection can also be seen in the number of affiliates in each Sector covered by ERTE.

Protected workers represent 5% of total affiliates nationwide; 62% in the Accommodation Services Sector; 56% in Tourist Activities & Travel Agencies; 43% in Air Transport; 29% in Gambling & Betting Activities; 27% in Food & Beverage Services and 19% in the Sports, Recreational & Entertainment Sector.

Because ERTE of Impediment and limitation are linked to Administrative restrictions and are different by territory, there are geographical differences:

In the Balearic Islands, Castilla-La Mancha, the Valencian Community, Extremadura and Madrid the number of people in ERTE has decreased compared to September.

In Asturias, Navarre and Catalonia the number of workers in ERTE has increased compared to September because the coronavirus restrictions were more intense.