In the dynamic landscape of the Spanish economy, businesses often face periods of uncertainty or structural change. Whether due to external economic shifts, organizational restructuring, or unforeseen crises, companies operating in Spain must be intimately familiar with the legal mechanisms available to manage their workforce during difficult times. Two of the most significant tools provided by Spanish labor law are the ERTE (Expediente de Regulación Temporal de Empleo) and the ERE (Expediente de Regulación de Empleo). At Alen & Marbe, we understand that navigating these processes is not just a legal requirement but a strategic necessity for business continuity.

Understanding the Basics: ERTE vs. ERE

Before initiating any procedure, it is crucial to distinguish between these two mechanisms. While they share a similar name and procedural framework, their objectives and long-term impacts are vastly different.

An ERTE is a temporary measure. It allows a company to either suspend employment contracts or reduce working hours for a specific period. The employment relationship remains intact, and employees are expected to return to their normal conditions once the temporary period ends. This is typically used for transient economic, technical, organizational, or production reasons (ETOP), or in cases of force majeure.

In contrast, an ERE is a permanent measure. It refers to a collective redundancy procedure that results in the definitive termination of employment contracts. This process is mandatory when the number of dismissals exceeds certain thresholds within a 90-day period, depending on the size of the company’s workforce.

Step-by-Step Guide to Managing an ERTE Correctly

Successfully implementing an ERTE requires strict adherence to the procedures outlined in the Spanish Workers' Statute. Failure to follow these steps can result in the measure being declared null and void, leading to significant financial penalties and the obligation to pay back wages.

1. Identification of Causes: The company must provide evidence of the grounds for the ERTE. These can be economic (losses or persistent decline in income), technical (changes in production tools), organizational (changes in staff work systems), or production-related (changes in demand for products/services).

2. Communication and Consultation: The company must notify the legal representatives of the workers and the labor authority. A consultation period is then opened, where the company and the workers' representatives must negotiate in good faith to reach an agreement.

3. Final Decision and Notification: Once the consultation period ends, the company must notify the workers and the labor authority of its final decision. If an agreement was reached, the measures are implemented as agreed. If no agreement was reached, the company can still implement the measures, but they are more susceptible to legal challenges.

4. SEPE Coordination: It is vital to coordinate with the State Public Employment Service (SEPE) to ensure that affected workers receive their unemployment benefits correctly and timely.

Managing an ERE: Compliance and Sensitivity

The ERE is one of the most sensitive procedures a company can undertake. Given that it involves permanent dismissals, the legal scrutiny is much higher. Managing an ERE correctly is essential to minimize litigation risks and protect the company’s reputation.

The procedure follows a similar path to the ERTE but includes additional requirements. For instance, the company must present a detailed "Redundancy Plan" (Plan de Acompañamiento Social) if it employs more than 50 workers. This plan should include measures to mitigate the consequences for the affected employees, such as outplacement services or training.

According to the official guidelines provided by the Spanish Ministry of Labor and Social Economy, the consultation period for an ERE must last no less than 30 days (or 15 days for companies with fewer than 50 employees). During this time, the parties must discuss possibilities of avoiding or reducing the dismissals.

Common Pitfalls and How to Avoid Them

Many companies face legal setbacks because of procedural errors rather than the validity of their reasons. Common mistakes include:

• Lack of Documentation: Failing to provide a robust "Memoria Explicativa" (explanatory report) that justifies the economic or organizational need for the measure.
• Bad Faith Negotiation: Approaching the consultation period as a mere formality without a genuine intention to negotiate or share relevant information with workers' representatives.
• Incorrect Threshold Calculation: Miscounting the number of dismissals over a 90-day period, which can accidentally trigger a collective redundancy procedure when the company thought it was performing individual dismissals.

To avoid these risks, it is essential to have legal counsel involved from the very first signs of financial or organizational distress. A proactive approach allows for better planning and a smoother transition for both the business and its employees.

Strategic Legal Support with Alen & Marbe

Managing an ERTE or an ERE is a high-stakes endeavor. At Alen & Marbe, we specialize in Spanish labor law and have extensive experience guiding both national and international companies through these complex processes. Our goal is to provide legal security while ensuring that the measures taken align with the long-term strategic goals of your business.

We assist in every phase, from the initial audit of the company’s situation and the drafting of the necessary documentation to the representation in negotiations with unions and labor authorities. We ensure that your company meets all legal obligations while minimizing the social and financial impact of the restructuring.

If your company is considering a workforce adjustment, do not leave your compliance to chance. Contact Alen & Marbe today for a comprehensive consultation on how to manage an ERTE or an ERE correctly and safeguard the future of your organization.