Unions Split on Wage Negotiations

vr union iceland, Ragnar Þór Ingólfsson

The coalition of unions engaged in wage negotiations with the Confederation of Icelandic Enterprise (SA) suffered a setback yesterday when VR, one of the largest unions, pulled out of the talks. The other unions will go forward with their negotiations as they’ve reached an agreement on major points of contention, Morgunblaðið reports.

Negotiations on a new collective bargaining agreement had been halted for two weeks after a disagreement on a clause in the proposed four-year deal to protect workers from downside risks if inflation and interest rate targets were not met. An agreement on salaries had already been made in principle.

Negotiations to proceed

Talks began again Wednesday and apart from VR, the unions accepted a compromise on the aforementioned clause. “We disagreed on whether the clause went far enough and we decided to step aside,” VR President Ragnar Þór Ingólfsson said. “I sincerely hope that they reach an acceptable deal for their constituents and that could be the foundation that we could build from and reach an agreement on what we need for our constituents.”

SA Director Sigríður Margrét Oddsdóttir said that it was a disappointment to not be able to reach an agreement with the coalition as a whole. She is still hopeful for a long-term agreement that would create the conditions to lower inflation and interest rates.

Union Leader Allays Strike Fears

ASÍ President Finnbjörn A. Hermannsson

Strikes are an unlikely outcome in the current labour dispute between unions and employers, President of the Icelandic Confederation of Labour (ASÍ) Finnbjörn A. Hermannsson told RÚV today. He expects parties to reconvene for further discussions, as the sides are close to agreement on major issues.

Strikes up to individual unions

On Friday, the coalition of unions ended its negotiations with the Confederation of Icelandic Enterprise (SA) on a new collective bargaining agreement. Despite an agreement on modest salary increases being reached in principle, the coalition had hoped to include a clause in the four-year deal to protect workers from downside risks if inflation and interest rate targets were not met.

Finnbjörn says that although the unions involved are members of ASÍ, an umbrella organisation of trade unions, the unions would have to individually decide whether to strike or not. Ragnar Þór Ingólfsson, president of the union VR, had previously said that he did not rule out industrial action to bring about a new agreement.

“The members of the coalition will confere and what they do will be their decision,” Finnbjörn said. “But I expect people to come back to the table and pick up from where they left off.”

Further negotiations upcoming

Finnbjörn added that both parties were focused on bringing down inflation and that an agreement on salaries was near at hand. “And usually when talks fall apart, it is because of the salary issue, not clauses on economic targets. That’s why I expect the parties to come back together and exhaust all avenues before they turn to industrial action,” Finnbjörn said.

Further wage negotiations are coming up for unions in the public sector. Finnbjörn said that informal discussions have begun and that he was optimistic for a good result and positive economic developments in the near future.

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.