Labor Force Adjustment Plan (ERE): The Complete Guide from Personal Experience by Carlos Hidalgo

What's up, people? I'm Carlos Hidalgo and today I want to talk to you about a subject that I sincerely hope you never have to face. But, if you do, you'd better know what it's all about and how to get hurt as little as possible. Today we are going to talk about the Expedientes de Regulación de Empleo. Yes, those damned EREs that, with the passing of the years and the blows of life, I have come to know all too well.

I'm going to be clear: this is not theory or cheap talk. I'm not going to give you a legal sermon with no head or tail, but rather a summary from the mud, from the experience of someone who has lived firsthand what it means when a company drops you with an ERE and leaves you with a "what now?" face.

What the hell is a Redundancy Program?

Let's put it in context. A REE, or Redundancy Program, is a legal procedure that allows companies to adjust their workforce for different reasons. Eye to the fact: adjust does not mean just firing, although that is the most bitter and well-known part.

There are different types of ERE, depending on the needs of the company and its financial situation:

1. ERE of Extinction (Collective Dismissal): Here there is no turning back, buddy. They tell you "thank you very much and goodbye" for good. It is the typical collective dismissal where, for economic, technical, organizational or production reasons, they leave you on the street. And you know what? The law only requires them to give a compensation of 20 days per year worked, with a maximum of 12 months. And if you don't like it, you can always go to court, although we know how those things tend to go.
2. Suspension TERM: Here they don't fire you, but it's as if they do it for a while. They send you home without full pay, but without losing your contract. It can be for economic reasons or force majeure, as happened during the pandemic. They assure you a temporary unemployment benefit, but believe me, that help goes away faster than you think.
4. Reduction of Workday: Similar to the previous one, but instead of sending you home, they let you work fewer hours. Sounds good, but with the pay cut it's not so much fun anymore. This option is widely used when the company foresees a temporary slump and hopes to rebound.

When and why can a company initiate an ERE?

This is where we enter swampy territory. Companies can opt for an ERE alleging different reasons. The crisis, lack of sales, technological changes... whatever the excuse, they usually package it all under the umbrella of "economic" or "organizational" causes. But, my friend, it is not always as transparent as it seems. Many times, they use the ERE to cut costs and make up the accounts. I have seen companies that were "in crisis" and, months later, they hired people hand over fist.

What does it take for a company to activate an ERE?

First, the company has to demonstrate that it is in serious trouble. This is not simply that they had a bad quarter; they have to show constant losses for three consecutive quarters or a significant change in the market. And if you're one of those on the hook, you'll have to hear about this from union reps (if you have them) or a terse mailing that leaves your blood running cold.

How does an ERE affect you?

Now let's cut to the chase, because here's where it gets ugly. I experienced it firsthand a few years ago when the company where I had been for over a decade decided it was "time to make adjustments." Back then, what I got was a kick in the door and a severance package that, if I hadn't had savings, wouldn't have lasted six months.

But eye, all is not lost:

1. Right to unemployment benefits: If you get fired, you're entitled to unemployment, provided you've contributed enough. But don't get your hopes up; these benefits won't keep you going for long, especially if you have a mortgage, children, or simply want to live more than rice and tuna.
3. Compensation: At a minimum, you are owed 20 days per year worked. Yes, it sounds nice on paper, but when they translate it into the amount you receive, it becomes a bad joke.
5. Outplacement plans: In theory, if the ERE affects more than 50 people, they should offer you an outplacement plan. In practice, it's more like a salute to the flag. But hey, at least you get a nice certificate saying that you were "considered" for a new job.

The dark side of the EREs: what they don't tell you

The hardest part of the ERE is not just losing your job. It is the emotional shock, the "what do I do now?". Companies often use fear to make workers accept worse conditions than they are entitled to. And that is where they take advantage.

I have seen cases of people signing voluntary resignations thinking it was the only way out, when in fact they had the right to fight for more. The trick is to be well informed and not be fooled.

Conclusion: My advice as Carlos Hidalgo

If you ever find yourself in a situation like this, stay calm. Don't sign anything in the heat of the moment. Look for a specialized lawyer and fight for your rights. Do not rely on what the company tells you; they go their own way. You, meanwhile, make sure you take care of your own.

I hope my experience is of some use to you. And, if not, at least you will have been entertained for a while. Because, at the end of the day, life goes on and you have to learn to adapt to whatever comes along, even if it means starting over.

See you next time, and good luck in the job jungle!