telephone announced the introduction of Employment Regulations (ERE) to reduce its workforce and associated payroll. This represents a change in relation to the strategy that the company has applied in recent workforce adaptation processes and implies differences at the economic level: from tax benefits to compensate employees for savings in pension plan contributions if the ERE occurs under the same conditions as the previous one, in 2011.

In 2019 and 2021, the company introduced PSI plans, which are voluntary arrangements for some workers to retire early. There is still no data on layoffs, as the matter must be agreed with trade unions, although some sources agree that about 3,000 people will be raised. If that many layoffs occur, the company will reduce its workforce by 22% post-pandemic.

Telefónica is keeping under lock and key the reasons behind this change in strategy, from incentive plans to ERE, but there are some differences. For example, in the case of PSI, the figure is set by the employees themselves who want to join them. Instead of, In the ERE, the company sets out the cancellations it seeks to undertake.although this is being discussed with trade unions.

Union sources suggest the company will remain “volunteer” despite being an ERE and hope to learn more details about the proposal next week when bargaining tables are set. “ERE allows them to push for layoffsbut we do not believe that such changes in labor relations will occur,” they say from UGT.

The same sources point out that in the latest ERE, since it is a termination of the contract and not a suspension, as in the case of PSI, workers lose – in addition to employment – contributions to the pension plan, as well as their health. insurance.company. However, they believe that this This is an aspect that will have to be discussed later.. However, even if they could be compensated, layoffs (termination of contracts) would mean the loss of these business benefits and at the same time savings for the telecommunications company.

Figures on how much Telefónica will save by eliminating these contributions and health insurance cannot yet be calculated, since the number of victims is unknown. In addition, trade unions emphasize that The cost of health insurance per employee is a private agreement. between the insurer and the telecommunications company, and it is unknown how much this will entail.

Exempt from personal income tax

Nevertheless, unions point to “tax reasons” in Telefónica’s choice of ERE as a cost-cutting formula. Guest points out that the PSI does not talk about collective dismissals, therefore compensation is subject to personal income tax, because there is no termination of the contract. That is, ERE is more financially beneficial for employees.

Luis Jimenez-Arellanohead of the labor law department at the law firm Mas y Calvet, explains that PSI, in short, private agreements in which different conditions apply to each employeewhile by introducing ERE, the company must offer the same to all affected employees.

Paula Ursera, tax director at TaxDown, notes that deciding which formula is more beneficial for an employee, PSI or ERE, requires taking several factors into account, such as age, seniority and re-employability. employment in the labor market after leaving the company.

From TaxDown They see no difference in terms of corporate tax but they explain that ERE is more difficult to carry out, since it is necessary to have a positive report from the Labor Inspectorate, in which the company will have to justify the reasons for these deviations. Also remember that severance pay is exempt from personal income tax until 180,000 euros.

It is this exemption that was reviewed by the Institute for Fiscal Studies (IEF) at the request of the Ministry of Finance. As this newspaper published, in 2022 This tax break caused a loss of 612 million euros to the state treasury.. The Treasury estimates that 737,775 taxpayers took advantage of the redundancy compensation tax exemption, up slightly from 2021 (737,192) but down from 2020 (786,054), the year the change in methodology took place. increased the calculation. of people.

Costs for the state

Another important issue in this process is the cost of layoffs carried out by the company will be for the state. It was as a result of the 2011 Telefónica ERE that a provision was added to the law that obliges companies carrying out collective redundancies to make a contribution to the State Treasury to cover the costs that the unemployment benefits received from it may have.

However, this will depend on the age of the employees leaving the company. As Jimenez-Arellano comments, this is a special agreement with Social Security and represents significant damage to the company’s accounts. These contributions are made upon collective dismissal of workers over 55 years of age and in enterprises with more than a hundred employees.