Understanding ERE

ERE is the administrative procedure under Spanish legislation that companies must follow when requesting a temporary suspension of labor contracts or a collective dismissal because of economic, technological, organizational, or productive reasons, or due to force majeure. Such action requires the agreement of the workers' representatives or, failing this, prior official authorization from the administrative authorities. The administrative authority would be either the Ministry of Employment and Immigration or the Regional Employment Ministry depending on the location of the affected employees.

When a company is forced to perform a massive reduction in force, ERE grants Social Security benefits if the company chooses not to terminate their employees, but rather suspend them temporarily. In addition, ERE provides financial support to employees who are terminated.

Oracle provides all the tools you need to manage the ERE procedure enabling you to enter required data, adjust reductions in contribution and compensation, and generate the reports to communicate required data to legal entities (Social Security and SPEE).

Types of ERE Actions

For a given ERE event, a company can take the following actions for its employees:

  • Permanent termination: Employees who are terminated permanently are provided an indemnity payment from the company. In addition, terminated employees are eligible to receive unemployment benefits paid by the Servicio Público de Empleo Estatal (SPEE).

  • Suspension: This action results in the temporary suspension of employees. During this suspension, employees don't work at all and receive a monthly benefit paid by SPEE. At the end of the suspension, employees return to their jobs and receive their normal monthly wage.

  • Work Schedule Reduction: This action results in a reduced work schedule for affected employees. Their work schedule is reduced either by the number of days worked per month, or the hours worked per day. During the work schedule reduction, employees receive a portion of their wages from their company based on the hours or days worked. In addition, they receive some unemployment benefits from SPEE to make up for wages lost due to their reduced work schedule.