The draft of the labor reform that has been debated this Wednesday at the social dialogue table contemplates that the new internal flexibility tool for companies in crisis – the so-called Employment Sustainability Mechanism (MSE) that will accompany the figure of the temporary employment regulation files in the legislation that enters into force on January 1 – it can only be applied for a maximum of one year, in the event that there is an agreement with the unions, or six months in the event that it is authorized by the Labor Authority without agreement.

This is stated in the last draft, to which you have had access Information and that includes a substantial change with respect to the current legislation on temporary employment regulation files (ERTE), which do not have a maximum (or minimum) duration and can be extended for as long as the company needs. The Covid crisis has shown that business need can last for months, or even years, and this reserve would be a solution to this problem, which involves allocating a large amount of public resources in the form of benefits and exemptions from contributions.

The text, as it is currently drafted, establishes that the MSE “may only be applied during a specific reference time period and for a maximum percentage of reduction of the ordinary working day to be carried out within it”. Specifically, “the reference period may have a maximum duration of 12 months if there is an agreement in the consultation period and 6 months in the event that the MSE is authorized by the labor authority when there is no agreement”. “In any case, the reference period will be of the strict duration essential to respond to the assumption on which the Mechanism is based,” he clarifies.

Likewise, it is determined that the reference time period and the percentage of reduction of working hours will be “identical for all workers in the same workplace affected by the Employment Sustainability Mechanism “, although it is added that” provided there are duly accredited justifying causes, different percentages of reduction of working hours may be set depending on the professional groups, functions or jobs affected. “One option, the latter , which seems more logical for companies that resort to this internal flexibility mechanism due to serious needs.

The draft, prepared with contributions from all parties – sources from the Ministry of Labor clarify – also contemplates that the benefits in terms of social contributions linked to the MSE (yet to be defined) will be conditional on the company’s compliance with a series of obligations , between them, the maintenance of the employment of the affected persons during the six months following the end of the application of the mechanism. This is a workforce safeguard clause, similar to the one that operates in current ERTEs, which will prohibit companies from firing workers affected by these processes until half a year after the MSE has ended.

What’s more, as advanced by Vice President Yolanda Díaz, the development of training actions and, in some cases, the relocation of a minimum of 20% of those affected by the MSE will be mandatory. This last condition will be mandatory for companies that take advantage of the Mechanism in the case of “professional transition processes of workers towards jobs in other companies or sectors.” In parallel, as the draft states, the MSE may also be used when economic, technical, organizational or production causes concur or “due to the requalification needs of the affected workers to guarantee their employment in the company itself.”

Maximum temporality of 15%

Another of the main novelties of the draft debated this Wednesday is that limits temporary hiring in companies to 15% of the workforce or to the lower percentage established by collective bargaining. According to what has been proposed, companies must inform the legal representation of the workers, during the month of January of each fiscal year, about the proportion of temporary staff and present a specific proposal for transformations or hiring to be carried out to meet the minimum, some conversions and contracts that must be made effective before March of the corresponding year.

The package to reduce the high rate of temporary employment in the national labor market also includes an approach to improve the protection of workers in temporary work companies (the so-called ETTs). Specifically, the proposal allows the conclusion of contracts to make available for temporary jobs provided that the employment relationship of the transferred person is arranged for an indefinite period. If carried out, it would be another substantial change in current legislation.