Although they share much of their name and are sometimes confused in everyday language, an ERTE and an ERE are completely different labor law mechanisms in Spain, with very different consequences for the affected employee.
The essential difference: temporary versus permanent
- ERTE (temporary layoff scheme): temporarily suspends or reduces the employment contract or working hours, without ending it. The employment relationship remains in force, and things are expected to return to normal once the ERTE period ends.
- ERE (collective redundancy procedure): when it's a termination-type ERE (the most common meaning when people say "ERE" in everyday language), it involves the permanent termination of the employment contract — in other words, a collective dismissal, already covered in more detail in another article on this blog.
Why they create completely different financial rights
During an ERTE, for as long as it lasts, no severance pay or compensation is owed, since the contract remains alive; the employee may be entitled to unemployment benefits during the suspension, but keeps their job while awaiting reinstatement. In a termination-type ERE, on the other hand, full severance pay is owed along with the corresponding legal compensation (a minimum of 20 days' salary per year worked, capped at 12 months' pay, unless improved during the consultation period), since this is a permanent termination of the employment relationship.
An ERE can also involve suspension or reduced hours, not just termination
This is an important nuance: although in everyday language "ERE" is almost always associated with job termination, there are technically also suspension-type EREs and reduced-hours EREs, with a logic and effects very similar to an ERTE, though processed under this other technical name depending on the timing and applicable regulations.
The negotiation procedure is similar in both cases
Both an ERTE for economic, technical, organizational, or production reasons, and a termination-type ERE, require, when they affect a significant number of employees, a consultation period with employee representatives, following a similar negotiating logic, even though the purpose and final consequences of each procedure are different.
Why it matters to know which one affects you
If your company announces one of these measures, it's essential to clearly identify whether it's a temporary suspension (ERTE, with an expectation of reinstatement) or a permanent termination (a termination-type ERE, equivalent to a collective dismissal), since your financial rights and next steps are completely different depending on the case.
Estimate your situation based on the scenario that affects you
Our severance pay calculator helps you estimate the indicative compensation in case your situation results in a permanent termination of your contract.