ERTE — Temporary Layoff in Spain

What Is an ERTE?

An ERTE (Expediente de Regulación de Empleo Temporal) is a temporary workforce adjustment mechanism under Spanish labour law, governed primarily by Article 47 of the Estatuto de los Trabajadores. It allows a company to:

• Suspend employment contracts entirely (the worker stops working and stops receiving salary)
• Reduce working hours between 10% and 70% (partial ERTE)

Unlike a permanent ERE, an ERTE is explicitly temporary: contracts are not terminated, workers retain all their employment rights, and they are expected to return to full-time work once the cause ends. During the suspension or reduction, affected workers receive unemployment benefits (prestación por desempleo) from SEPE, the public employment service, provided they meet contribution requirements.

Types of ERTE

ERTE by Economic, Technical, Organisational, or Productive Causes (ETOP)

The most common form. The company must demonstrate a genuine and current cause:

• Economic: Current or anticipated losses, or a persistent decline in revenues over three consecutive quarters versus the same period of the prior year.
• Technical: Changes to production methods or tools.
• Organisational: Changes to work organisation, systems, or processes.
• Productive: Changes in demand for goods or services.

This type of ERTE requires a consultation period (período de consultas) with worker representatives before the measure takes effect.

ERTE by Force Majeure (Fuerza Mayor)

Applied when the suspension or reduction is caused by circumstances beyond the company’s control — government-ordered closures, natural disasters, supply chain disruptions due to war or pandemics, etc. The COVID-19 ERTEs declared from March 2020 were force majeure ERTEs, authorised by emergency legislation with enhanced Social Security exemptions.

Force majeure ERTEs require authorisation from the labour authority (unlike ETOP ERTEs), and the causation must be demonstrated by documentary evidence.

Procedure: ERTE ETOP

Step 1: Opening the Consultation Period

The employer must notify the workers’ legal representatives (works council or elected delegates) and simultaneously inform the labour authority. The opening communication must include:

• Explanatory memorandum detailing the causes
• Number and classification of workers affected
• Proposed duration and scope
• Supporting economic or technical documentation

Step 2: Consultation Period

The parties negotiate in good faith. The consultation may end in agreement (acuerdo) or without one.

Step 3: Company Decision and SEPE Application

After the consultation period (with or without agreement), the employer:

1. Issues its decision, specifying affected workers, duration, and scope
2. Simultaneously applies to SEPE for recognition of workers’ unemployment benefit entitlement (solicitud colectiva de prestación)

SEPE processes the application and begins paying benefits to affected workers, typically from the date of contract suspension.

Procedure: ERTE Force Majeure

1. The employer submits an application to the competent labour authority with documentation proving the force majeure event.
2. The labour authority has 5 working days to issue a resolution (resolución). Silence is approval.
3. Once authorised, the employer applies to SEPE for collective benefit recognition.

Worker Rights During an ERTE

Workers affected by an ERTE retain:

• Unemployment benefit from SEPE (calculated on their benefit base, generally 70% of their regulatory base for the first 180 days, 50% thereafter), subject to having accumulated sufficient contribution days
• Full retention of seniority — the period of ERTE counts for seniority, redundancy calculation, and notice periods
• Health coverage through Social Security
• Reinstatement right — at the end of the ERTE, workers must return to their previous positions
• Protection against dismissal — companies that implement an ERTE commit to maintaining employment for a defined period (typically 6 months) after the ERTE ends

Workers may not be dismissed for objective or disciplinary reasons solely related to the ERTE cause during the suspension.

Social Security Exemptions

One of the principal advantages of an ERTE over individual dismissals is the Social Security cost structure:

• During a force majeure ERTE, the employer’s Social Security contribution for common contingencies is partially or fully exempt (the specific percentage depends on company size and the applicable legislation).
• For ETOP ERTEs, exemptions may be agreed at sector level or as part of the consultation agreement.
• Workers in ERTE continue to accrue Social Security coverage as if they were working — contributions are deemed made.

Duration and Extension

An ERTE ETOP must specify a duration. Extensions require a new consultation period, though parties may agree shorter extension consultations. There is no statutory maximum duration, but the temporary nature must be genuine — a permanent structural change should be addressed by an ERE, not a series of successive ERTEs.

ERTE vs. ERE: Key Differences

Practical Considerations for Employers

• Collective agreements may impose additional requirements — always check the applicable convenio colectivo before proceeding.
• Works councils have the right to challenge an ERTE before the courts if they consider the causes insufficient or the procedure defective. A judicial nullity (nulidad) means the suspension is invalid and the employer owes back pay.
• Companies with a high volume of temporary contracts should be cautious: ERTE is only available for employees in active employment. Fixed-term workers whose contracts expire during an ERTE are not renewed; they do not receive ERTE benefits.
• ERTE management requires ongoing communication with SEPE and the labour authority, including monthly notifications of which workers are affected and at what percentage reduction.

Frequently Asked Questions

Can a company dismiss workers during an ERTE? Disciplinary dismissals (for serious misconduct) remain possible during an ERTE. However, dismissals for causes related to the same grounds as the ERTE (economic, technical, organisational, productive) during the ERTE and the post-ERTE employment maintenance period will typically be declared unfair (improcedente) or null.

Do workers on ERTE accrue holiday entitlement? The treatment of holidays during an ERTE varies. Days suspended under an ERTE do not generate holiday entitlement for the suspended period, but collective agreements may establish more favourable rules. Existing accrued holidays are not forfeited.

Can a self-employed worker (autónomo) use an ERTE? No. ERTE is exclusively for employees under employment contracts. Self-employed workers have their own extraordinary cessation benefit (cese de actividad extraordinario) administered through their mutual insurance society.

What documentation must an employer retain after an ERTE? All documentation from the ERTE procedure — opening communication, consultation meeting minutes, agreement or unilateral decision, SEPE authorisation, and monthly reporting — must be retained for at least 4 years (general Social Security inspection period), and ideally for the duration of any potential legal challenge (up to 3 years).

How long does a typical ERTE ETOP take to implement? From opening communication to the start of the suspension: a minimum of approximately 5–15 consultation days plus administrative processing. In practice, companies should plan for 3–6 weeks from decision to implementation for a straightforward case with limited workforce scope.