Spain race against time to extend vacation – EURACTIV.com
The Spanish employers’ association, CEOE, has rejected a latest proposal from Social Security Minister José Luis Escrivá to extend temporary layoff or leave programs called ERTE – protecting some 600,000 jobs – beyond the date May 31 limit. EURACTIV partner EFE reports.
Unions, the CEOE and the government are fighting against the clock to agree on an extension of the plans until September 30, as the economic impact of the pandemic is still deeply felt in many key sectors.
President of CEOE Antonio Garamendi called on the government to create a “level playing field” for businesses and workers as a precondition for reaching a new deal.
Negotiations are blocked by the demand of the CEOE and the unions to maintain an exemption from social security contributions ranging from 70% to 100% depending on the number of employees. The government wants to replace this with a system that encourages companies to rehire workers.
Protect jobs in the most affected sectors
Spain’s ruling left-wing coalition, the PSOE and Unidas Podemos, could either approve the extension by decree without agreement with the employers, or continue negotiations until the last minute.
Sources close to the negotiations told EFE on Tuesday May 25 that the government was ready to continue the dialogue.
The Spanish Central Bank recently recommended the extension of temporary dismissal programs for employees in the economic sectors most affected by the COVID-19 pandemic, in particular tourism, which accounts for around 15% of Spain’s GDP.
A total of 899,939 people benefited from the country’s temporary layoff program in February alone. Over the whole of 2020, 3.6 million workers from a total of 550,000 companies, mostly small and medium-sized enterprises (SMEs), participated in the program.
The program sees the Spanish state paying workers around 70% of their normal wages and prohibits companies from firing people. In the event of fraud or dismissal, companies must return the exemptions from contributions to the social security system and face heavy penalties. Beneficiaries of ERTE schemes are officially considered to be employed, i.e. they are not considered to be unemployed.
To alleviate the difficult situation in the Spanish labor market, the European Commission ad Tuesday that the Iberian country received around 3.3 million euros in new loans from the European Unemployment Fund (SURE). The country is entitled to a total of 21.3 million euros.
[Edited by Daniel Eckand Josie Le Blond]