What’s the Status of the Efling Negotiations?

Update: As of March 8, negotiations between Efling and SA have been concluded. Read more about the contract here.

Strikes, short-lasted and contentious negotiations, and now a pending lockout against the Efling trade union have been in the news lately, leaving many who don’t follow Icelandic wage negotiations wondering: what, exactly, is happening on the Icelandic labour market?

Current status

All workers’ strikes have been postponed while Efling members vote on a mediating proposal put forth by the state mediator on March 1. Voting closes at 10:00 AM on March 8. The lockout proposed by the Icelandic Confederation of Enterprise (SA) has been postponed until March 9, meaning it could still be instituted if Efling members reject the mediating proposal.

Leadup to negotiations

In the fall of 2022, around one-third of all labour contracts in Iceland expired and needed to be renegotiated. Amidst upsets in the leadership of the Confederation of Icelandic Labour (ASÍ) and a particularly difficult combination of high inflation and interest rates, the round of contract negotiations was particularly fraught. Given the recent increases in cost of living, it was also an especially important round to ensure quality of life for workers. Most major trade unions were able to reach compromises with the Confederation of Icelandic Enterprise (SA), mostly in the form of shorter-term contracts. These short-term contracts will be renegotiated with SA when conditions are hopefully less difficult.

Playing hardball

One major holdout has been Efling Union, led by chairperson Sólveig Anna Jónsdóttir. Efling is the second-largest workers’ union in Iceland and represents some of the lowest-paid workers in the country. Efling has leveraged the difficult negotiating climate to agitate for more substantial wage increases.

State mediator Aðalsteinn Leifsson, whose task was to bring the negotiations between SA and Efling to a productive end, attempted to force a vote within Efling by submitting similar conditions approved by Efling’s peer unions directly to the union membership, circumventing what many see as an overtly militant leadership. Legal wrangling delayed the request and ultimately led to the appointment of a new, temporary, state mediator: Ástráður Haraldsson.

Workers’ strikes

Since early February, Efling members have approved several strike actions, mostly affecting hotels in the Reykjavík capital area. February 20 saw a significant escalation in the tensions between SA and Efling, when Efling’s suspended strikes resumed at midnight. In addition to the original 700 striking hotel workers, other labourers (most significantly among them, truck drivers) have resumed their strikes. As of the time of writing, some 2,000 Efling members are on strike. Efling has, however, postponed a strike among additional workers (in hotels, security services, and janitorial services) that was set to begin on February 28.

Confederation of Enterprise approves lockout

On February 22, SA announced that its members had voted overwhelmingly in favour of a lockout of Efling workers set to begin on March 2. CEO of SA Halldór Benjamín Þorbergsson called it a “last resort” to force the conclusion of a collective agreement with Efling Union. Efling Chairperson Sólveig Anna Jónsdóttir accused SA of using the lockout to force the government to step into the conflict.

The pending lockout would affect all members of Efling, around 21,000 in total, neither allowing them to show up to work, receive a wage, or accrue benefits and leave.

Unclear whether union would support locked-out workers

The pending lockout could leave Efling members in a tight spot as the union’s leaders appear to disagree on whether to make payouts to affected workers. While Efling’s regulations do not prevent the union from making payouts to members affected by a lockout, a notice on Efling’s website states “the union does not hold responsibility for a lockout and the labour dispute fund cannot sustain such payments.”

Efling’s labour dispute fund allocates approximately ISK 25,000 [$174, €164] per worker per day and has been used to pay the 2,000 or so members who were striking. In the case of a lockout, however, Efling would need to support ten times that number, and its funds would reportedly run out in a week.

Some have interpreted SA’s lockout as an attempt to intimate Efling into accepting their demands, and if not, to quickly burn through Efling’s labour dispute fund and force the union back to the negotiating table.

Impact felt at the pump and in hotels

Strikes among Efling workers, now postponed, impacted Icelandic business and society in various ways. A strike among oil truck drivers was felt at the pump in late February, when petrol supplies gradually began to deplete. Several hotels were temporarily closed due to workers strikes.’

Lockout postponed

In light of a meeting scheduled for February 27 between Efling and SA, SA has postponed the potential lockout pending further developments. Originally scheduled to begin Thursday, March 2, the potential lockout will now begin March 6, if no agreement is reached.

At the same time, Kristján Þórður Snæbjarnarson, chairperson of ASÍ, has stated that the planned lockout is potentially illegal on grounds of formal defects in the original notice, in addition to the problem of jurisdiction. According to statements from Kristján Þórður, SA members from outside the capital voted on the proposed measure, rendering it illegitimate. Because Efling trade union exclusively represents workers in the capital region, only capital area members of SA should have been allowed to vote on the matter.

On March 6, the Labour Court ruled in SA’s favour, deeming the lockout legal.

Vote on new proposal approved, strikes and lockouts postponed

Temporarily-appointed state mediator Ástráður Haraldsson called a press conference at 10:00 AM on Wednesday, March 1. He told reporters that representatives from the Confederation of Icelandic Enterprise (SA) and the Efling union had approved of his new mediating proposal and that all ongoing and impending strikes and lockouts would be postponed while voting took place.

Voting began on Friday, March 3, at noon, and will conclude on Wednesday, March 8. The lockout and all strikes have been postponed in the meantime.