March 10, 2020 - Iceland Review Skip to content

Reykjavík City and Efling Union Reach Agreement in Wage Disputes

Reykjavík pond

Efling union and Reykjavík City reached an agreement for a collective bargaining agreement last night, following a three-week-long strike of Efling workers. The strike had a disruptive effect on kindergartens in the capital area. Full-time employees in the lowest wage bracket will see a wage raise of ISK 112,000 per month ($875, €770).

Reykjavík mayor Dagur B. Eggertsson states that the agreement is in accordance with what the city had previously offered Efling workers. “The way I see it, this a breakthrough agreement,” Dagur commented. The two sides agreed on a ISK 15,000 ($117, €103) special allowance for the lowest wage brackets, with a lower amount for those in higher wage brackets.

Along with the wage raise, an agreement for the shortening of the workweek was also reached. The workweek of shift-work employees will be shortened from 40 hours to 36, while those who work at all hours of the day will see a shortening of the workweek to 32 hours. Employees working at office hours in the daytime will also be able to shorten their workweek to 36 hours, from the aforementioned 40.

Furthermore, kindergarten staff is ensured to receive 10 overtime hours per month in the form of a special allowance. Kindergarten staff will also have added leeway to sit courses and seek education. Educating kindergarten staff members will be given extra emphasis as part of salaries so that staff can save for paid education leave.

COVID-19 effect

The two sides celebrated the conclusion of the negotiation using sign language, refraining from shaking hands due to updated work procedures connected to the COVID-19 virus. Dagur also commented that the virus had undeniably put further pressure on the two negotiating committees. “We have daily meetings with the city’s emergency management team to prepare society for the outbreak of COVID-19, and the work needed to be done there is an unpleasant fit with the reality of strikes and wage disputes,” Dagur stated.

Reykjavík city officials have reached an agreement with six thousand Efling workers in the last two days, or close to 65% of those employed by Reykjavík city.

Next steps

Following the strike of Efling workers in Reykjavík, 300 Efling union members went on strike yesterday in adjoining capital area municipalities Kópavogur, Mosfellsbær, Seltjarnarnes, Ölfus, and Hveragerði. Efling president Sólveig Anna Jónsdóttir expects a swift resolution to the wage dispute in those municipalities.

Hand-Knitted Icelandic Sweater Receives Protected Status

lopapeysa Icelandic sweater

The term ‘Icelandic sweater’ (Icelandic: íslensk lopapeysa) is now a legally protected product name, having received a Designation of Origin status today from the Icelandic Food and Veterinary Authority. The Icelandic hand-knitted wool sweater is a traditional Icelandic garment. By receiving a Designation of Origin, the sweater becomes the second product name to receive such legal protection in Icelandic, following in the wake of Icelandic lamb meat.

The Handknitting Association of Iceland (Icelandic: Handprónasamband Íslands) formally applied for the designation of origin with The Icelandic Food and Veterinary Authority. The application stated that the sweaters are an original design unique to Iceland, which has origins in Icelandic knitting- and pattern traditions from the middle of the 20th century. The craftsmanship in the sweaters when it comes to making them, as well as the patterns, are derived from Icelandic cultural traditions.

Conditions to be met for the designation of ‘Icelandic sweater’

Certain conditions have to be met for sweaters to officially receive the designation of origin connected to the term ‘Icelandic wool sweater’, including that the wool in the sweater comes from Icelandic sheep, as well as having to be handwoven from virgin wool. The main conditions follow:

  1. The wool used to make handcrafted Icelandic sweaters shall be cut from Icelandic sheep.
  2. Only virgin wool shall be used as material for the sweater (wool that has not been recycled).
  3. The sweater shall be knitted from unspun wool, such as unspun plötulopi wool, thinner léttlopi wool, Álafosslopi wool, etc..
  4. The sweater shall have a circular knitted yoke with pattern shapes and/or pattern benches from the shoulder area to the neck.
  5. The sweater shall be handknitted in Iceland.
  6. The sweater shall be knitted in a circle without stitches.
  7. The sweater shall have an open front or be whole.

Designation of origin

In December 2014, the Icelandic parliament enacted the Product Names Protection Act, which allows for the protection of product names on the basis of origin, territory, or traditional uniqueness. Such laws, often manifested as Designation of Origin, are widespread in Europe, where they are often applied to artisanal products such as French cheese and Spanish ham. The first product name to receive such protection in Iceland was “Icelandic lamb,” which was protected last year.

The proposal suggests that increased demand for Icelandic sweaters has led to the widespread production of the traditional design with its decorative collar. “Increased foreign production of ‘lopapeysa’ sweaters made of foreign wool or synthetics also makes it urgent that buyers have the possibility to differentiate between ‘Icelandic sweaters’ and imitations,” states the proposal.

Icelandic Government Takes Measures to Protect Economy from Impact of COVID-19

Katrín Jakobsdóttir

At a meeting this morning, the Icelandic government approved an action plan intended to minimise the negative impact of COVID-19 on the Icelandic economy. Due to the drastically changed economic conditions, the government is revising its fiscal policy and will delay presenting its budget bill until May.

“The COVID-19 epidemic will have a direct impact on economic activity and the state of the National Treasury,” a government press release reads. The national economy is in a good position to absorb the impact, the press release goes on to say, but is nevertheless “vulnerable to the external effects” of the virus, which can “already be noted” in the economy.

In order to protect the economy, the Icelandic government will take the following measures:

  • Companies that experience temporary operational difficulties due to a drop in income will be given leeway, e.g. with later deadlines to submit taxes and public fees.
  • Consideration will be given to temporarily suspending fees that are burdensome for tourism companies, e.g. overnight tax, which will be temporarily suspended.
  • A marketing campaign will be launched overseas when conditions are created to promote Iceland as a destination, as well as a campaign to encourage Icelanders to travel domestically.
  • Measures will be taken that can stimulate private consumption and demand, e.g. with tax or support systems.
  • Increased energy will be put into public construction projects in the current year and the coming one.
  • Active consultation will be established between the government and the Icelandic Financial Services Association on their response to the foreseeable liquidity and payment difficulties of companies in tourism.
  • The Housing Financing Fund’s deposits with the Central Bank will be transferred to banks’ deposit accounts to support banks’ and creditors’ leverage to lend to their clients.

The government is currently reviewing the current fiscal policy in consideration of the altered economic circumstances. The presentation of the new budget bill, originally scheduled for April 1, has been delayed until after mid-May.

“In conjunction with work on the revision of the fiscal policy, a special investment effort is underway which will entail a significant increase in the National Treasury’s investment level in the coming years,” the press release states. The plan assumes the planned sale of Íslandsbanki, currently in state ownership, will occur during the budget period in whole or in part, “but only if conditions for sale are favourable.” A bill on collaborative investment in road works will also be presented in the spring, a further effort to support future investment.