Royal Decree 608/2023, of 11 July, has been published, developing the RED Mechanism for Employment Flexibility and Stabilisation, which, once activated, will allow companies to apply for measures to reduce working hours and suspend employment contracts. It also introduces relevant changes to the regulation of collective dismissals.
Royal Decree 608/2023 of 11 July, published in the Official State Gazette of 12 July, develops the material and procedural aspects of the RED Employment Flexibility and Stabilisation Mechanism, an instrument whose general operating regime is set out in article 47 bis of the Workers’ Statute (ET), which, once activated, will allow companies to apply for measures to reduce working hours and suspend employment contracts.
Although it was activated for the travel agency sector on 1 April 2022, due to the crisis it underwent as a result of Covid-19, its definitive implementation required the development of article 47 bis of the E.T. (Workers’ Statute). This has been carried out through this Royal Decree 608/2023.
The regulation came into force on 13 July 2023 and will be applicable to procedures whose commencement by the company is notified after its entry into force.
Collective redundancies and temporary lay-offs (ERTE) that have been initiated at the date of entry into force of the regulation will be governed by the regulations in force at the time they were initiated.
It is a mechanism similar to the ERTEs that aims to provide companies with internal mechanisms to adjust to situations of crisis, cyclical changes in demand, which is why they have been articulated under two modalities: cyclical and sectoral.
Modalities and Activation of the RED Mechanism
The RED Mechanism can be activated in the cyclical modalities (when a general macroeconomic situation is observed that advises the adoption of additional stabilisation instruments) and sectoral (when permanent changes are observed in a specific sector or sectors of activity that generate the need for retraining and professional transition processes for workers), as provided for in article 47.bis.1 of the Workers’ Statute.
The activation will be carried out by agreement of the Council of Ministers and after informing the most representative trade union and employer organisations at national level, which will be published in the BOE (Official State Gazette).
In the case of the sectoral RED Mechanism, the criteria according to which a specific sector of activity is defined may be included.