Friday, May 27

The Government approves the Red Fund so that the new ERTE can operate “imminently”


There is already a specific fund to finance the new ERTEs of the so-called “Red Mechanism”, which are expected to be necessary in the face of the war in Ukraine and for some consequences of the pandemic crisis. The Council of Ministers has approved this Tuesday the constitution of the Red Fund for the request of the new files created in the labor reform, regulated in article 47 bis of the Workers’ Statute. In the Government they have not given figures at the moment on how much money the fund will have.

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The rule approved this morning “implies the possibility of activating the RED Mechanism ensuring the financing of the measures” and that this labor tool “can operate imminently”, the Ministry of Social Security and Labor collect in their joint statement.

The Government extended in February one more month, until March 31, the ERTE mechanism for COVID so that companies that need it can process the new labor reform files: the renewed ERTE due to force majeure and those for objective reasons ( ETOP), as well as the new files of the Red Mechanism. The latter, however, must be activated beforehand by the Council of Ministers.

The ERTE of the Red Mechanism have two modalities, for cyclical crises of the economy and for sectoral problems. The latter is the one that has been proposed for travel agencies after the pandemic crisis, although it has not yet been activated by the Council of Ministers.

In the sectoral modality, exemptions of 40% of the Social Security contributions are foreseen, conditional on the training of the workers covered by the measure. “The company that wants to join is obliged to present a requalification plan that includes mandatory training actions to enable relocation to another position within the same company, or in other companies. It has a maximum duration of one year, with the possibility of two extensions of six months each”, the Ministries recall.

Protection for working people

The files of the Red Mechanism generate the right to a social benefit for the affected workers, similar to the unemployment benefit (70% of the regulatory base), although it does not consume unemployment.

“The benefits will be recognized with effect from the first day on which the measures of suspension or reduction of working hours could be applied, or with effect from the date of presentation of the request for affiliation to the mechanism, in the event that it was presented after the deadline. , and they will be paid once the business communication is received”, explain the Ministry of Social Security and Labor.

The Red Fund is expected to meet the financing needs “in terms of benefits and exemptions to companies from the payment of Social Security contributions, including the costs associated with training”, includes the labor reform.

The resources of this fund will come from “the surplus income that finances unemployment benefits at their contributory and welfare level, the contributions that are consigned in the General State Budgets, the contributions from the financing instruments of the European Union aimed at to the fulfillment of the object and purposes of the Fund, as well as the returns of any nature generated by the Fund”, adds the legislation. At the moment, the Ministry of Labor and the Ministry of Social Security do not answer how much the resources of the fund will amount to.



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