976 Canary Islands companies investigated for ERTE fraud during state of alarm

2020/07/06 20:47:08 Written by Canarian Weekly Business

The inspectors of the Ministry of Labour are concentrating on specific cases in which hiring of staff has been detected after the state of alarm was declared.

The labour inspectorate is investigating nearly a thousand Canarian companies for possible cases of fraud with temporary employment regulation (ERTE) files during the coronavirus pandemic.

According to information provided by the Ministry of Labour, Migration and Social Security, the inspectors are focusing their efforts on cases in which suspicious movements of workers have been detected, specifically in 976 businesses that are in the Islands under the magnifying glass of state officials, out of a total of more than 26,000 across the country.

However, the number of cases will surely increase from now on, since these investigations began in May and it takes a few weeks to complete the analysis of each case.

ERTEs are being fundamental for the survival of tens of thousands of companies throughout Spain, to avoid hundreds of thousands of layoffs, even more so in the Archipelago, by far the hardest hit Autonomous Community by the halt in tourism, which represents around 40% of its GDP.

Around 30,000 businesses have benefited from ERTE in the Canary Islands since March 14th, when the national alarm started, the vast majority due to force majeure. This type of ERTE, which the Ministry of Labour created ad hoc to prevent the collapse of the national productive fabric, entails exemptions and/or bonuses in the payments of companies to Social Security, in addition to a series of benefits for the affected employees.

This is the reason that the inspectors are investigating, above all, cases of entities that have enjoyed, or are enjoying, these exemptions or bonuses in social contributions and that, paradoxically, discharged workers after the state of alarm had been decreed. In short, fictitious workers to benefit more from the ERTE.

Of the 976 inspection reports, a total of 660 were made to companies in the province of Las Palmas de Gran Canaria, against 316 in Santa Cruz de Tenerife. Thus, practically seven out of ten suspected cases of fraud with ERTE, have occurred in businesses in Gran Canaria, Lanzarote and Fuerteventura.
It should be noted, however, that in the eastern islands of Lanzarote and Fuerteventura, there are more companies than in La Palma, La Gomera and El Hierro, in other words: this apparent imbalance does not necessarily imply that the fraud is greater in the productive fabric of the province of Las Palmas, not at least in relative terms.