The most relevant employment related measures taken by the Government arising from the COVID-19 pandemic situation are the following:
A. Extraordinary support in order to maintain job positions and minimize corporate crisis situations (so called “layoff simplificado”)
It is possible for a company to resort to the simplified lay-off regime if, due to the COVID-19 context, the company is found in a corporate crisis situation.
The following three situations (they are not cumulative) are considered a business crisis situation:
a) Companies or establishments/business units whose total or partial closure was ordered by the political or health authorities;
b) When there is the total breakdown of the company/undertaking’s activity, resulting from:
- The interruption of the global supply chains
- The suspension or the cancellation of orders;
c) When there is an abrupt and sharp drop in 40% of the company’s turnover, the period of thirty days prior to the request, with reference to the average of the two months prior to that period, or to the same period of the previous year. For companies who have initiated their activity in the last 12 months, the average turnover should be considered.
The employer can choose between:
- Suspending the employment contract(s); or
- Reducing the employees’ working hours, in accordance with the general layoff regime, provided for in the Labour Code.As regards the duration:
- Initial duration: 1 month, maximum
- Extension: monthly, up to a maximum of 3 months
B. Extraordinary support for occupational training purposes
It consists in the extraordinary support for part-time occupational training, through a training program, aimed at maintaining the job positions and strengthening the employees’ competences, therefore preventatively avoiding dismissals.
It is possible to request the support when the employer did not request the extraordinary support referred to in A.
As regards the duration, it corresponds to 1 month, but the workload may not exceed 50% if the employee’s normal working period.