CORONAVIRUS (COVID-19)

After China, Europe has now become the epicenter of the Coronavirus pandemic.

It is within the context of this unprecedented crisis that many European Union countries have already taken emergency measures to address it, in order to protect public health and limit its economic and social impact.

Main Measures Implemented by Spain and France Regarding Labor Law

In this regard, Spain declared a “State of Emergency” on March 14 and adopted Royal Decree-Law 8/2020 on March 17, concerning extraordinary urgent measures, as well as Royal Decree 465/2020 of March 17, amending Royal Decree 463/2020 of March 14, which declared a “State of Emergency.”

France, for its part, acted shortly thereafter. On the evening of March 16, the President of the Republic announced a new series of restrictive measures to combat the spread of COVID-19, and several ministerial orders and a decree entered into force. However, two bills are to be submitted to a vote in the French Parliament. These bills pave the way for the establishment of a “state of health emergency” but also aim to set new measures in the areas of economics, labor law, and justice.

From the perspective of employer-employee relations, two similar, though somewhat different, solutions appear to be emerging in France and Spain through the suspension of employment contracts.

1- In Spain

In Spain, the ERTE (“Temporary Employment Regulation File”) is at the forefront of measures taken by companies, with several thousand ERTEs already submitted to the relevant authority.

These ERTEs can be submitted based on economic, organizational, technical, or production reasons, or on force majeure. Many companies have been forced to close completely and thus unable to carry out their operations. Some of them have even submitted ERTEs due to force majeure.

  • An ERTE involves the suspension of the employment contract or a reduction in working hours; however, the employee remains bound to their employer but loses the right to receive their salary as well as salary supplements such as bonuses or vacation pay.
  • In the case of a reduction in working hours, the salary and salary supplements will be calculated based on the hours actually worked.
  • However, and exceptionally, the employee will have the right to receive unemployment benefits even if he has not completed the minimum contribution period required to be eligible.

2- In France

In France, "partial unemployment" is currently the most common measure implemented by companies. It is a tool for preventing layoffs that allows employees to remain in their jobs when their company faces temporary economic difficulties. Partial unemployment applies to companies experiencing:

  • Either a reduction in the establishment's usual working hours,
  • Or a temporary closure of all or part of the establishment.

The partial unemployment scheme involves the suspension of the employment contract, but not its termination.

The aim of this measure is to compensate for the loss of income resulting from employees working below the legal (collectively agreed or contractual) working hours, while also helping employers finance this compensation.

The French government announced that employees would initially receive an hourly allowance, paid by their employer, equal to 70% of their gross salary (approximately 84% of their net salary). The government will then reimburse the employer within a maximum of 10 days.

Employees placed on partial activity (furlough) can benefit from training programs. In this case, the allowance paid to the employee is increased. It will then be equal to 100% of their net hourly wage. This will also be the case for employees earning the minimum wage (SMIC).

Other measures have, of course, been implemented, although this article focuses on the most widespread and commonly used ones in both Spain and France. In any case, we can imagine that labor law will certainly be modified in an unprecedented way in the coming days.

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