Spain: The Employment Regulation Agreements: A Paradigm for Labour Agreements in Spain.

Spain

The Employment Regulation Agreements: A Paradigm for Labour Agreements in Spain.

Employment Regulation Agreements (Expedientes de Regulación de Empleo, ERE) have been a common topic in the Spanish news in recent years. Many publications have brought the issue to the forefront in these times of economic crisis. This is not surprising, as more than 133,892 of these procedures have been filed, affecting over 2,284,328 workers since 2008.

The ERE is a legally established procedure that allows a company that has provided clear evidence of financial, technical, organizational or production-related difficulties to modify its employees’ labour conditions (wages, salaries, fees, etc.), terminate its employment agreements, or make some or all of its workers redundant.

These procedures continue to fall under the legal jurisdiction of the government, although the 2012 labour reform significantly limited company powers and functions in the process. ERE conditions are regulated by Articles 41, 47 and 51 of the Workers’ Statute, as well as Royal Decree 1483/2012, of 29 October, which approved the regulation on collective redundancy, employment agreement termination and work schedule cutbacks.

Because the procedure allows companies to adapt their workforce to the firm’s actual financial, technical or production situation, it has been widely implemented in these times of crisis and the number of EREs filed in recent years has risen sharply. Some companies have, in fact, filed more than once.

The numbers speak for themselves. In 2007, in Spain there were 3,794 EREs that affected 58,401 workers. By 2013, however, the number had risen to 27,173 EREs involving 379,972 workers. Most certainly, 2012 saw the worst of the crisis, as 35,521 procedures affecting 483,313 people were filed.

The procedures usually take one to two months to complete and, in most cases, end with an agreement between the company and the employees. From 2008 to 2013, 91% of EREs concluded with an agreement between the company and the workers. If we focus only on EREs for collective redundancy, however, the rate drops to 85%. Significantly, the rates of agreement observed in collective redundancies in 2012 and 2013 were 77% and 78%, respectively.

In short, EREs are necessary and effective procedures that respect labour rights, sometimes help to keep the company from closing its doors and, consequently, avoid the loss of jobs. Clear proof of this is that most of these procedures end with an agreement between the company and its employees.