SGS Signs New Contract with SA, Causing Controversy

sgs trade union iceland

A new short-term contract has been reached between SGS, one of Iceland’s larger trade unions and SA, the Federation of Icelandic Employers. The agreement was reached on Saturday, December 3, between 17 of SGS’s member organisations and SA. Notably, Efling, SGS’s largest member organisation, was not a signatory to the agreement.

Rising interest rates have complicated wage negotiations between many of Iceland’s trade unions and SA, with short-term contracts seen as a compromise to cope with the immediate impact of inflation and interest rates, without locking unions and employers into longer-term contracts that may not be suited to economic conditions in the traditional three-year period.

The short-term contract will be valid from November 2022 to the end of January 2024. It includes a flat minimum raise, as well as more holidays and adjustments for inflation.

Read more: VR Leaves Negotiating Table

However, the recent SGS contract has come under heavy criticism.

Kristján Þórður Snæbjarnarson, acting chairperson of the Confederation of Iceland Labour after Drífa Snædal’s resignation earlier this year, stated that the agreement was not suitable for craftsmen. He expressed his wish that the trade unions would stand together during the negotiating process, but that the inconclusive Confederation of Labour Congress earlier this year caused many fault lines to form within the Icelandic labour movement.

“As I said after the congress,” stated Kristján to RÚV, “I believed that we could take positive steps forward to strengthen the union. Just like our congressional elections are supposed to do. But it didn’t work, so this is what it’s come to. What we need to do is work on our internal issues and find a way forward.” 

Read more: Rising Interest Rates Complicate Upcoming Wage Negotiations

In light of difficult labour market conditions, the current round of wage negotiations was seen by many in the labour movement as a time for solidarity in applying pressure against SA, the employer’s union. The recent agreement between SGS and SA is seen by some as a betrayal of labour solidarity at a time when workers hold more power over their employers than usual.

Sólveig Anna, chairperson of the Efling union, has also been critical of the contract. She stated to RÚV: “We, of course, do not agree to take part in some deception where what people have already won is being simply repackaged and sold back to them.”

Efling is notable as having gone into their negotiations with very ambitious demands.

Along with Sólveig Anna, Vilhjálmur Birgisson, chairperson of SGS, and Ragnar Þór Ingólfsson, chairperson of VR, together represent some of the largest labour organisations in Iceland. The SGS contract, however, has driven a divide between these figures.

In a post on social media, Vilhjálmur stated his side of the case, saying that he was “saddened to see people he considered friends stab him in the back.” He also accused other members of the labour movement of leaking details of the contract to complicate the agreement, and of treating the recent agreement “as if a crime had been committed.”



VR to Remain in ASÍ

vr union iceland, Ragnar Þór Ingólfsson

Ragnar Þór Ingólfsson, chairperson of VR, has stated that for the time being, VR’s position within ASÍ will remain unchanged.

VR is Iceland’s largest trade union, representing some 40,000 workers. There have however been suggestions recently that VR will leave ASÍ, or the Federation of Labour. ASÍ, founded in 1916, is the largest federation of trade unions in Iceland and has historically played an important role in labour organisation in Iceland.

However, the most recent ASÍ conference over contract negotiations has proved a turbulent one, with many major trade unions suggesting that they go their separate ways in the future.

Read More: Hopes for New ASÍ Leadership Among Contract Negotiations

The upheavals come in the wake of Drífa Snædal’s resignation earlier this year from her leadership position in ASÍ. Citing political hostility, she said that it was no longer possible to perform her duties in her resignation letter. Since her resignation, ASÍ leadership has been in turmoil, with some of Iceland’s largest trade unions considering leaving during ASÍ’s 45th conference.

Ragnar Þór also withdrew his candidacy for ASÍ leadership at the conference, citing the possibility of a break with the federation. Now, at least for the time being, it seems that VR will remain with ASÍ.

Read More: ASÍ Leadership Up in the Air as Candidates Withdraw

The announcement came today before a formal meeting with SA, Iceland’s leading employers’ union.

In a statement from Ragnar Þór, he said that all of the union’s efforts will now be directed towards the wage negotiations with SA.

Regarding the future, however, Ragnar Þór emphasised that nothing can be ruled out.

Cabin Crew Approves Contract With Icelandair

Members of the Icelandic Cabin Crew Association (FFÍ) have approved the newest contract negotiated between the Association and Icelandair, RÚV reports. FFÍ’s members rejected two previous contracts in a months-long, tense negotiation process. The Association’s director says Icelandair’s executives will need to work hard to rebuild trust among cabin crew.

“It’s pretty clear that Icelandair’s directors have a big project on their hands, that is to rebuild trust,” Guðlaug Líney Jóhannsdóttir, FFÍ’s chairperson, stated in a television interview last night. Following months of increasingly tense negotiations and two failed attempts, Icelandair announced it was firing all of its flight attendants on July 17 to seek a contract with “another party within the Icelandic labour market.” Icelandair then asked its pilots to step in and take over cabin crew duties while it searched for new staff.

FFÍ requested to meet with Icelandair the following day, however, and by early morning on July 19, a new contract between the two parties had been hammered out. That contract, valid until 2025, has now been approved by the association’s members.

“The key point in this is that these contracts that were approved today ensure the company’s competitiveness and flexibility and safeguard the working conditions of Icelandair’s flight attendants,” stated Bogi Nils Bogason, Icelandair’s CEO. He expected the company would employ around 200 flight attendants in August and September – there were over 900 working for the company in April. Rehiring decisions will be based on seniority and performance, Bogi stated.

Large Losses for Icelandair in Second Quarter

Icelandair lost ISK 12.3 billion ($19.8 million/€77.6 million) in the second quarter of 2020, according to the quarterly results submitted by the company to Nasdaq Iceland. The airline’s flights dropped by 97% and their passenger numbers by 98% during the quarter. The company has reported ISK 45 billion ($332 million/€284 million) in losses in the first half of this year, around ISK 30 billion of which are attributable to the COVID-19 pandemic.

Throughout the spring, Icelandair continued to operate minimal flights to and from Iceland, primarily to Boston, London, and Stockholm, with the help of government funding. Its current flight schedule, valid until August 30, includes 22 destinations in Europe, the US, and Canada.

Icelandair plans to make a public stock offering in August as part of the financial restructuring of the company. Executives aim to conclude negotiations with investors this week.