In cooperation with our Spanish partner law firm we are bringing you an overview of how Spain is tackling the coronavirus crisis from the legal perspective.
The Spanish government has issued a state of emergency based on a royal decree.
Like in other EU countries, Spanish employers may apply for short-time work ("Kurzarbeit”). According to the circumstances, employers may shorten their employees’ working hours or suspend the validity of employment agreements. The decisive factor is whether the cause lies in vis maior, or whether it is a cause of economical, technical, organizational or production nature.
If the entrepreneurs apply for Kurzarbeit, they have to undertake to keep workplaces and abstain from firing employees for at least 6 months after the operation of their enterprise has been reopened.
According to the pandemic-related measures adopted in Spain, the due date of certain taxes and levies has been postponed – both at the level of the whole country and at the level of the Madrid autonomous region. This concerns the gift tax, inheritance tax, transfer tax, waste collection and gambling machine fees and “certified legal acts tax” (ITP/AJD).
Entrepreneurs, who become insolvent, are, during the whole duration of the state of emergency, relieved of the duty to file an insolvency petition.
Insolvency petitions filed by a creditor shall be processed by the courts after two months since the termination of the state of emergency have elapsed.
A debtor, who has notified the court that he has opened up negotiations with creditors regarding refinancing, an out-of-court settlement, or a preliminary insolvency plan, is, for the whole duration of the state of emergency, relived of the duty to file an insolvency petition.
In connection with insolvency proceedings, a completely extraordinary case has happened in Spain. A textile producing enterprise in Valencia region was undergoing insolvency proceedings – it had no employees and did not conduct any activities. Yet, it was still a bearer of a valid license to conduct its business and owned fully operational production equipment.
With regard to the emergency situation in the healthcare sector, the commercial court in Valencia allowed the production enterprise to recommence its activity. Thus, the enterprise could start producing protective wear for healthcare personal. Employees participating in the process did so without right to any remuneration and at their own risk. All delivered input materials were provided for free; in the same vein, finished protection wear was delivered to healthcare workers for no cost.
The court, according to its decision, explicitly stated that the social function of the insolvency proceedings allows the court to take into account – alongside with the interest of the creditors to satisfy their receivables - the interest of public good. Due to said reason, the court allowed a temporary reopening of the enterprise in question.
The article has been prepared in cooperation with the Spanish law firm MONEREO MEYER ABOGADOS, S.L.P, registered seat at Alfonso XII, 30, 28014 Madrid (as well as in Barcelona and Palma de Mallorca). More available at: https://www.mmmm.es/en/.
