Royal Decree-Law 2/2009, of 6 March.
Written by Josep Conesa
Employment and insolvency lawyer
This Royal Decree-Law is structured around three chapters covering the following areas: employment retention, improved social protection for workers, and measures to encourage employment in Spain.
Employment Retention Measures
Among the measures designed to retain employment, the most notable is the right of companies to a 50% rebate on employer contributions to Social Security for common contingencies.
This rebate may be claimed by companies whose workers, affected by a Collective Dismissal Procedure (ERE), have had their contracts temporarily suspended or their working hours temporarily reduced. Collective contract suspensions processed under insolvency legislation are also covered by this rebate.
To qualify for this rebate, the company must commit to retaining those employees on its workforce for at least one year from the end of the suspension or reduced-hours period. If the company fails to meet this requirement and dismisses any of those employees before the stipulated period has elapsed, it must repay the amounts from which it has benefited. The only exception, where repayment will not be required, is in cases of disciplinary dismissal or where the dismissal is declared fair.
The duration of these rebates will run concurrently with the employee's period of unemployment but may not, in any case, exceed 240 days per employee.
Protection Measures for Unemployed Persons
Protection for unemployed persons is structured around two measures: on the one hand, the restoration of entitlement to unemployment benefit, and on the other, the removal of the waiting period to become eligible for the unemployment subsidy.
Reinstatement of unemployment benefit:
Employees whose employment contract is terminated through a Collective Dismissal Procedure (ERE) or by court order in insolvency proceedings shall have the right to reinstatement of their contributory unemployment benefit for the same number of days during which they received unemployment payments.
Employees who, by virtue of a Collective Dismissal Procedure (ERE) or insolvency proceedings, have had their working hours reduced or their employment contract temporarily suspended may also benefit from this measure. In such cases, the number of days for which they received partial unemployment benefit will be reinstated.
In all cases, whether involving contract suspension, reduction of working hours, or contract termination, and where the circumstances described above apply, the reinstatement of unemployment benefit shall not exceed a maximum of 120 days. Accordingly, any unemployment days accumulated by employees affected by a Collective Dismissal Procedure (ERE) or insolvency proceedings will not be forfeited (provided they do not exceed 120 days).
These measures shall apply to all reductions of working hours or contract suspensions authorised between 1 October 2008 and 31 December 2009, and to all contract terminations authorised from March 2009 through 31 December 2011.
Removal of the one-month waiting period before receiving unemployment benefit:
Previously, employees were required to wait one month from the moment they became entitled to unemployment benefit before payments began. This created a period of unprotected exposure that, in the current economic climate, was causing serious hardship. This mandatory waiting period has now been abolished, allowing unemployed individuals to begin receiving their subsidy from the moment they lose their job.
Employment promotion measures
With a view to promoting employment, companies that hire unemployed benefit recipients on a permanent basis will receive a 100% reduction in their Social Security contributions for common contingencies.
The cap on this reduction will be equivalent to the gross amount of benefit the employee had yet to receive, and in no case may it extend beyond three years. Where the contract is part-time, the reduction will be applied proportionally to the agreed working hours.
Companies benefiting from this reduction must retain the newly hired employees for a minimum of one year. Furthermore, this reduction is incompatible with any other employment promotion incentive.
This is a summary of the main measures adopted. Should you require personalised advice or more detailed information, our firm is at your disposal to address any questions you may have.
