COVID-19: Spain – Royal Decree extends extraordinary measures

In Spain, the Royal Decree entered into force on 27 June 2020. Please find below a brief summary of this Decree and the significance for employers:

1. The temporal scope of force majeure temporary layoff is extended until 30 September 2020. Companies must notify the Labour Authority of the decision to reactivate work and end the suspension / reduction of contracts.

2. Temporary layoffs for objective reasons (meaning suspension/reduction of contracts), can be initiated while a force majeure temporary layoff file is in force (meaning suspension/reduction of contracts due to force majeure). In case the suspension/reduction of contracts for objective reasons initiates after suspension/reduction of contracts due to force majeure has ended, the suspension/reduction for objective reasons will be retroactive to the termination of the force majeure.

3. Until 30 September 2020, companies in a situation of partial force majeure temporary layoff may benefit from the exemption in force which recognises the right to contributory unemployment benefit for the worker concerned, even if they do not have the minimum period of contributory employment to do so. The time during which the unemployment benefit is received at the contributory level shall not be taken into account for the purpose of calculating the maximum periods of receipt.

4. Extraordinary contribution measures:

   a. Reactivation of activity as from 01 June: 60% exemption during July, August and September for companies with fewer than 50 employees; 40% for companies with more than 50 workers.

   b. Suspension continues from 01 July to 30 September: 35% exemption in July to September for companies with less than 50 workers: 25% for companies with more than 50 workers.

   c. Companies which, as of 30 June, are affected by a situation of total force majeure, and with respect to workers who continue to be suspended as of 01 July, will enjoy the following exemptions:

   • if the company has less than 50 workers, 70% in July, 60% in August and 35% in September
   • if the Company has more than 50 workers: 50% in July, 40% in August and 25% in September.

5. The prohibition on dismissals until 30 September 2020 remains in force.

See our coronavirus (COVID-19) feature for more information generally on the possible legal implications of COVID-19.