The Spanish government on Tuesday banned firms which get state aid to deal with the economic impact of Russia’s invasion of Ukraine from firing workers over rising energy prices.
Like the rest of Europe, Spain has been grappling since last year with soaring energy prices which helped push inflation in February to its highest level in over 30 years.
Job terminations will be deemed “unjustified when they are the result of causes linked to the rise in energy costs,” Labour Minister Yolanda Diaz told a news conference.
“I want to send a clear message to business leaders in our country: during a crisis, when social protection mechanisms exist…we must not lay off,” she added following a weekly cabinet meeting.
Socialist Prime Minister Pedro Sanchez’s government approved Tuesday plans to offer 16 billion euros ($17.5 billion) in direct aid and loans for companies and households hit by the impact of Russia’s invasion of Ukraine.
The measures, which will remain in place until June 30, include a discount of 20 cents per litre of fuel, with the government paying 15 cents and fuel providers the rest.
It also includes a 362-million-euro aid package for the agriculture and farming sector, 68 million euros for the fishing and aquaculture industries and a two percent cap on rental increases.
The plan also provides funding for a furlough scheme to help struggling firms avoid job cuts like the one put in place in 2020 when the Covid-19 pandemic hit and which will end on March 31.
“It would make no sense for us to spend public money by paying salaries and social contributions to then allow (companies) to lay off,” said Diaz, who belongs to far-left party Podemos.
When the Covid-19 pandemic hit, the Spanish government also banned companies which received state aid to furlough workers from dismissing staff.