Package of measures in response to the economic and social consequences of the war in Ukraine

Royal Decree-Law 6/2022, of March 29, adopting urgent measures in response to the economic and social consequences of the war in Ukraine, has now been published.

This National Plan in Response to the Impact of the War includes several labor measures to mitigate its consequences. Among them, the Government prohibits objective dismissals (despido objetivo) for companies that receive public aid.

Aid for families and workers

The Royal Decree-Law introduces a discount of €0.20 per liter of fuel, including diesel, gasoline, gas, and AdBlue. In addition, companies that avail themselves of the measures for reducing working hours or suspending employment contracts regulated in Article 47 of the Workers’ Statute (Estatuto de los Trabajadores) for reasons related to the invasion of Ukraine, and that benefit from public support, may not rely on these reasons to dismiss employees.

Limitation on rent increases

The new legislation also contains an extraordinary limitation on the annual rent update for main residences, preventing increases above 2%. This limitation will remain in force until June 30. Tenants will be able to negotiate with their landlord the increase to be applied in this annual rent update. In the absence of an agreement, the rent may not be updated above the change in the Competitiveness Guarantee Index (Índice de Garantía de Competitividad, IGC), currently at 2%.

A 15% increase in the minimum living income

Recipients of the minimum living income (ingreso mínimo vital) will receive a 15% increase in their monthly payments for April, May, and June 2022. This increase will also apply, on the same terms, to applications for this benefit that had been filed by the date on which the Royal Decree-Law entered into force but had not yet been decided, as well as to applications filed afterward, provided that the effective date of the award is not later than June 1, 2022.

Electricity social discount

In addition, in order to protect the most vulnerable, the number of households receiving the electricity social discount (bono social eléctrico) will grow by 600,000 families, so that it will benefit 1.9 million households, as recipients of the minimum living income are now included. The legislation provides for the automatic renewal of the social discount. The 60% and 70% discounts for vulnerable and severely vulnerable consumers will remain in place until June 30.

New €10 billion line of ICO guarantees

The Council of Ministers has approved a new €10 billion line of guarantees for loans from the Official Credit Institute (ICO) to cover liquidity needs arising from the temporary increase in the cost of energy and fuel. Applications for the guaranteed loans may be submitted until December 31, 2022.

Aid for the agricultural and fisheries sectors

The Council of Ministers has also approved an aid package for the agricultural and fisheries sectors worth more than €430 million, set out in the Royal Decree-Law.

Social Security contributions for companies

In addition, the Royal Decree-Law includes measures to strengthen the liquidity of companies and workers, in line with those approved during the pandemic, by means of deferrals at a very low interest rate. Specifically, these are liquidity measures for companies in various sectors affected by the current situation, such as special deferrals of Social Security contributions at a very low interest rate of 0.5%, seven times lower than the usual rate.

Easier procedures for Ukrainian refugees

Within the remit of the Ministry of Justice, the Royal Decree-Law provides that persons of Ukrainian origin who apply for Spanish nationality will be exempt from submitting birth certificates and criminal record certificates from their country of origin, thereby being treated in the same way as refugees and stateless persons recognized as such by the Ministry of the Interior. The legislation also includes the approval of an extraordinary budget appropriation of €1.2 billion in 2022 for the reception of refugees from Ukraine.

Protection of vulnerable persons

Among other measures, the Royal Decree-Law establishes a unified model for certifying victim status in cases of human trafficking or sexual exploitation, so that public services or social organizations can certify it. In addition, trafficking is included among the matters handled by the 016 helpline, which has been providing assistance in Ukrainian since last Friday.

How does the prohibition on objective dismissals work for companies?

In Royal Decree-Law 6/2022, the Government has included a series of labor rules within the package of initiatives to address the impact of the crisis caused by the war in Ukraine. Notable among these regulatory initiatives is the prohibition on objective dismissals for reasons related to the price of energy.

Objective dismissals would also be prohibited where companies receive direct aid under the plan and where they decide to implement a temporary layoff scheme (ERTE). If a company receiving aid dismisses its employees, it would automatically have to repay the amount of the aid.

The purpose of this initiative is to protect employment by preventing unfair dismissals (despidos improcedentes), in order to put an end to job destruction.

As happened during Covid-19, companies will be able to resort to internal flexibility measures such as ERTEs, provided for in Article 47 of the Workers’ Statute.

Article 44 of Royal Decree-Law 6/2022 provides that companies benefiting from direct aid may not justify objective dismissals on the basis of the increase in energy costs.

Furthermore, companies that avail themselves of the measures for reducing working hours or suspending employment contracts regulated in Article 47 of the Workers’ Statute, and that benefit from public support, may not rely on these reasons to dismiss employees.

We would remind you that the RED mechanism is already active for the travel agency sector.

The prohibition on companies carrying out objective dismissals due to the energy crisis, high prices, and supply shortages caused by the war in Ukraine will remain in force for 3 months, until June 30, 2022.

For companies that implement an ERTE for reasons related to the invasion of Ukraine, no time limit has been set for the application of the prohibition on dismissals.