Employment: New regulatory framework for ERTEs (Temporary Redundancy Schemes.)

Energy: Spain approves the “Hydrogen roadmap: a commitment to renewable hydrogen”.

Litigation: Legal action over the liability of company administrators.

EMPLOYMENT

New regulatory framework for ERTEs (Temporary Redundancy Schemes).

DAVID GARCÍA-FELIU
Senior Associate

On October 1, 2020, Royal Decree-Law 30/2020 of September 29, 2020, on social measures in defence of employment regarding new types of Temporary Redundancy Schemes (ERTEs), came into force.

The three types of ERTE regulated in this measure in the first and second articles have the following characteristics.

1. ERTEs for sectors with a high rate of ERTE use and a low rate of recovery of activity

The term of validity for this ERTE will run from 01.10.20 to 31.01.21. Those companies included in any of the 42 codes of the Classification of Economic Activities (CNAE-09) included in Annex 1 of RDL 30/2020 can benefit from this ERTE modality.

Likewise, companies that are part of the value chain of the above (half of their turnover in 2019) or whose activity depends on a company included in the CNAE codes in Annex 1 mentioned above may also apply for it.

These companies must not have reemployed 65% of the persons in ERTE and must belong to a sector which has had more than 15% of the persons registered with social security receiving payments from the SEPE (Spanish Public Employment Service); they have the possibility extending a previous ERTE.

The exemptions from Social Security payments, from which these companies can benefit from October 2020 until January 2021, are the following: in the case of companies with fewer than 50 workers, 85% of the salary contribution of their workers (whether they are being paid by the SEPE or they have returned to their jobs) and, in the case of those companies with 50 or more workers, an exemption of 75% of the salary contribution of their workers, whether they are being paid by the SEPE or they have returned to their jobs).

These exemptions will also be applicable if one of these companies initiates an ERTE for economic, technical, organizational or production reasons (“ETOP”) after completing a force majeure ERTE.

2. ERTE for impediment of business activities

The period of validity is from 01.10.20 to 31.01.20. This type of ERTE is aimed at those companies in any sector that experience a constraint in the carrying out of their business activities in any of their work centres as a result of health protection measures or restrictions adopted by both national and/or foreign authorities and, therefore, their turnover has been reduced to zero.

The Social Security exemptions will include the period of validity of the restrictive measures until 31.01.21. In the case of companies with fewer than 50 workers on 29.02.20, they may benefit, with respect to the workers whose activities are suspended in the affected centres, for the periods and percentages of the working day affected by the suspension up to 100% of the company contribution accrued during the period of closure, and until 31.01.21.

Those companies with 50 or more workers will be able to benefit, with respect to the workers who have their activities suspended in the affected centres for the periods and percentages of the working day affected by the suspension from an exemption of 90% of the business contribution during the period of closure and until January 31, 2021.

3. ERTE due to limitation of business activities

The period of validity is from 01.10.20 to 31.01.21. This type of ERTE is aimed at those companies in any sector that experience a limitation in the carrying out of their activities in any of their work centres as a result of decisions or measures adopted by the national authorities.

The following companies will be able to benefit from exemption percentages from October 2020 until January 2021:

For companies with fewer than 50 workers at 29.02.20 whose activities suspended, and the periods and percentages of the working day affected by the suspension, the exemption for the company contribution accrued in the months of October, November, December 2020 and January 2021 will be 100%, 90%, 85% and 80%, respectively.

Furthermore, for companies with 50 or more employees 29.02.20 whose activities have been suspended, the periods and percentages of the working day affected by the suspension, the exemption for the company contribution accrued in the months of October, November, December 2020 and January 2021 , will be 90%, 80%, 75% and 70%, respectively.

Finally, it is worth noting that if an extension or a new ERTE is granted (due to a limitation or restriction in accordance with the provisions of Royal Decree-Law 30/2020, the employment issues to be taken into account will include a new commitment to safeguard employment for six months (cumulative if a previous one existed) and a prohibition on overtime or outsourcing of any activity.

October 2020

ENERGY

New economic regime for renewable energy - auctions.

IGNACIO PUIG
Senior Associate

On October 6, 2020, the Council of Ministers of the Spanish Government, at the instigation of the Ministry for Ecological Transition and the Demographic Challenge (MITECO), approved the “Hydrogen Roadmap: a commitment to renewable hydrogen”.

Renewable hydrogen will be key to the decarbonization of the Spanish economy, as well as other cross- cutting challenges such as economic reactivation after the COVID-19 health crisis, a fair transition, the demographic challenge, a circular economy and climate neutrality, with the aim of achieving a 100% renewable Spanish electricity system by 2050. Furthermore, it will promote the creation of innovative industrial value chains in our country, technological knowledge, and sustainable employment generation, thus contributing to a rebound in the path towards a green economy with high added value.

The document, whose development is covered in the Integrated Energy and Climate Plan (PNIEC) 2021-2030, includes 60 measures and sets national targets – aligned with the European Hydrogen Strategy – to 2030. Among others:

• 4 gigawatts (GW) of installed electrolyzer power,
• A minimum of 25% of hydrogen consumption by industry to be renewable,
• Implementation of hydrogenerators, trains and heavy transport vehicles powered by this product.

Hydrogen is not a primary source of energy, such as the sun and wind, but rather an energy vector, that is, a manufactured product capable of storing energy for later release in a gradual way. When renewable energies are used for its manufacture, the hydrogen obtained will be considered “green hydrogen” or “renewable hydrogen”.

The document highlights the potential of hydrogen to activate the development of value chains, expand Spanish energy R+D+i and open up new business opportunities and economic activity in areas such as the manufacture of electrolyzer assemblers, fuel cells, components (electronics, control, automotive, mechanics), vehicles, shipyards, pressure tanks, hydrogen generators or renewable hydrogen production plants, as well as their management, large-scale storage solutions, hydrogen transport equipment and renewable hydrogen-based mobility services.

Furthermore, hydrogen allows for the acceleration of renewable development in Spain, with the associated positive effects of a higher presence of renewable energies in the system on electricity prices and on industrial competitiveness. In this area, the Roadmap highlights its role in the development of smart grids and, especially, to store renewable energy seasonally and on a large scale, thus providing manageability to the system. This development will be carried out in line with the Storage Strategy, whose draft is currently being finalized by the MITECO.

These two factors, according to the Roadmap, will make hydrogen one of the main assets which would make Spain one of the European powers in renewable generation. In addition to this, other technologies will be implemented, such as those included in the Road Map for the Development of Offshore Wind and Marine Energy in Spain, which is also being prepared, and which will bring about a radical change in the current energy paradigm, consolidating a 100% renewable electricity system by 2050.

October 2020

LITIGATION

Recognition of foreign judgements in Spain.

ALEJANDRO FERREIRA
Senior Associate

As a general rule, capital companies’ administrators are exempt from liability when their conduct does not lead to situations that are harmful to the company’s assets or when their intervention has been aimed at avoiding such damage, in which case the company will be liable for the debts with its assets.

However, one of the main objectives of the last reform of the Ley de Sociedades de Capital [Spanish Corporation Law] was to reinforce the effectiveness and the hardening of the liability regime for company administrators in the face of behaviours directly related to the exercise of their functions, which could be harmful to the assets of partners and/or creditors, and to the company’s own assets.

To this end, the commercial legislation establishes two perfectly differentiated actions against companies’ administrators based on the scope or sphere in which the negligent conduct takes place: individual action and social action.

In the case of an individual action, it is applicable when the assets affected by the administrator’s conduct belong to a partner or a third party. For example, this action would be applicable when the administrator's behaviour hinders the collection of a creditor of the company, but only when such damage has been directly caused by the administrator.

In the case of a social action, it is applicable when the damaged assets caused by the administrator’s fault or negligence are those of the society itself. Therefore, this action will always be carried out by agreement of the General Board, prior request of any of the partners.

Individual action is regulated in the Ley de Sociedades de Capital, but given its short extension, it is a legal concept that has been developed essentially by the jurisprudence. In this regard, the jurisprudence defines two different issues or aspects of this responsibility: subjective responsibility or for specific acts of the administrator that have been malicious or wrongful and have caused damage; and the objective responsibility for negligence in the general management of the company that make the administrator responsible for the debts created and that the company has not been able to pay.

Some practical examples of objective responsibility analysed by the jurisprudence would be the de facto closure of a company without presenting dissolution or bankruptcy, or the presentation of annual accounts that do not reflect an accurate picture of the company assets. In these cases, the administrator is personally liable for the payment of the company’s debts to creditors.

To conclude, it is important to make clear that these actions will always be applied in a restrictive manner as generally the law establishes that companies pay their debts with their assets. However, it is possible to assess the personal liability of a company’s administrators in the event of harmful malicious or wrongful conduct, or in the event of general negligence affecting the company’s solvency and capacity to pay.

October 2020