Special E.R.E. Agreement Company

To enter into this special agreement, the following requirements must be met:

• Submission of the application to join the special scheme within the specified timeframe.
• On behalf of the company:
  • Not to be subject to insolvency proceedings on the date of dismissal.
• On the part of the employee:
  • To be listed as included in the collective redundancy proceedings file.
  • Be aged 55 or over on the date of dismissal.
  • Not having been a member of a mutual insurance scheme on 1 January 1967, in accordance with Article 51.9 of the consolidated text of the Workers’ Statute Act, approved by Royal Decree-Law 2/2015 of 23 October.
  • To have been notified of his dismissal by the company in accordance with Article 51.4 of the consolidated text of the Workers’ Statute Act, approved by Royal Decree-Law 2/2015 of 23 October.

The special agreement on collective redundancy schemes (E.R.E.) is aimed at companies and workers aged 55 or over who have been included in collective redundancy procedures.

This relates to contributions for the period from:

• Employment termination resulting from collective redundancy and
• The date on which the employee reaches the age of 63, or 61 in the case of a collective redundancy scheme (E.R.E.) on economic grounds.

However, if the employee is in receipt of contributory unemployment benefit as a result of collective redundancy, cover under the special agreement would commence on the date on which that benefit ceases.

Time frame

The company must submit the application for registration of the special agreement whilst the collective redundancy procedure is underway and, in any event, no later than the date on which it individually notifies each affected worker of their redundancy.

Should the company fail to apply for registration in the special agreement as set out in the previous paragraph, the employee may apply for registration within six calendar months of the date on which the company individually notified them of their dismissal.

Form

Via the Social Security e-Office, the company may apply electronically to be registered under this type of special agreement. Employees can submit their application via IMPORTASS.

The deadline for deciding on the registration for this special agreement is that established in general for applications to sign up to this ordinary special agreement.

Contributions under this special agreement are intended to cover the same benefits as under the ordinary special agreement.

Subject responsible for the payment

Contributions under the special scheme shall be borne exclusively by the company until the date on which the employee reaches the age of 63, or 61 in the event of a collective redundancy scheme (E.R.E.) on economic grounds.

Determination of the payment due

Once the period of cover under the special agreement has been determined on the basis of each worker’s individual circumstances (age, the date on which they reach the age of 61 or 63, whether they are entitled to unemployment benefits, etc.), the Social Security General Treasury system calculates the total contributions at the time the special agreement is formalised.

Contributions for the aforementioned period shall be calculated by applying the applicable contribution rate and reduction coefficient to the average of the worker’s contribution bases over the last six months of contributory employment. In addition, contributions must be made under the Intergenerational Equity Mechanism.

Where a worker is entitled to the allowance for those aged 52 and over, the contribution payable by the National Public Employment Service will be deducted.

Voluntary revaluation of the contribution basis following registration in the special scheme. Additional clause

The employer and the employee may voluntarily agree that the contribution basis under the special agreement is to be adjusted annually, with effect from the year following that in which the special agreement was registered, and may choose one of the following adjustment methods:

• Application of the percentage by which the minimum basis for Band 1 of the general table of contribution bases under the Special Social Security Scheme for Self-Employed Workers (RETA) has been increased. However, provided that this minimum contribution basis does not exceed the minimum RETA contribution basis in force on 31 December 2022 (€960.60), no increase shall apply.
• Application of the percentage by which the maximum contribution basis has been increased.
• If an employee has paid contributions at the maximum contribution base for 24 months – whether consecutive or not – within the last 5 years, they may choose to have the contribution basis under the special agreement increased to the maximum contribution basis.

The cost of the pay rise may be borne by the company or by the employee, by mutual agreement.

Method of payment

The total amount due in respect of all special redundancy schemes (E.R.E.) that the company is to enter into may be paid by direct debit, either as a single payment or in instalments; in the latter case, it is mandatory a sufficient joint and several guarantee be provided or, where applicable, the company’s liability for payment must be replaced by that of a registered financial institution or a duly authorised insurance company.

Regulatory Payment Period

In the case of a single payment, the payment shall be paid within the month following the month in which the decisions to register the workers in the special scheme were notified to the party responsible for payment.

In the case of payment in instalments, the first instalments shall be paid within the month following the month in which the party responsible for payment was notified of the decisions to register the workers in the special scheme. The second and subsequent annual instalments shall be paid within the month immediately preceding the start date of the relevant instalment.

Registration in this special scheme is compatible with:

• Unemployment benefit for those aged 52 and over.
• The conduct of business. In this case, once the worker has reached the age of 63/61, on which date the special agreement entered into by that worker will be renewed, the Social Security General Treasury will determine the amount of the contribution paid by the employer that corresponds to the work carried out by the employee, applying this to the novated special agreement.
  

The special agreement shall be terminated for any of the following reasons, in relation to the employee:

• Becoming eligible for a retirement pension or a permanent disability pension under any of the schemes within the Social Security System.
• Due to death.
• Upon reaching the age of 63, or 61 in the case of a redundancy scheme (E.R.E.) on economic grounds.
  

• Article 20 of Order TAS/2865/2003, of 18 October, which regulates the special agreement in the Social Security System.
• Thirteenth Additional Provision of Royal Legislative Decree 8/2015 of 30 October, approving the consolidated text of the General Social Security Act.

Applications for registration must be accompanied by the following documentation:

• Identification document of the worker (National Identity Document -NIF- or foreigner's identity card -NIE-).
• Identity document of the company representative (National Identity Document -NIF- or foreigner’s identity card -NIE-).
• Proof of authority as the company’s legal representative.
• Notification of the collective redundancy scheme or of the company’s decision to carry out collective redundancies to the Labour Authority.
• List of all employees affected by the redundancy scheme. (first name, surname(s) DNI or NIE).
• Final minutes of the consultation period in the collective redundancy procedure.