400 Small Businesses Form New Association

downtown Reykjavík

Around 400 small and medium-sized businesses have registered in a new association that was formed yesterday, RÚV reports. The association, called Atvinnufjelag, will take part in contract negotiations separately from the Confederation of Iceland Enterprise (SA) in order to give a voice to smaller businessses.

“Over 99% of associations in Iceland are small and medium-size businesses and independent workers,” stated Arna Þorsteinsdóttir, one of the founders of the new association and co-owner of ad agency Sahara. The new association’s preparatory board says smaller businesses need a bigger seat at the table. “What’s not working with SA is the voting system. The bigger a business is, the more votes you have, the more weight you have. So it’s more likely that bigger businesses call the shots.”

The premise of the new association is that each company will have one vote, regardless of its size, setting up a majority rule. Arna says smaller companies have felt they do not have enough of a voice within SA. “Especially during COVID, certain response measures were requested for small and medium-size businesses that did not get support.”

The association’s founding statement asserts that Iceland’s taxation system is unequal and should take into account the size and scope of businesses’ operations. The association states it will negotiate contracts on behalf of its members and do so independently from SA. Arna hopes, however, “that there will be an open discussion and talks. We recognise that we are sort of gatecrashers here but we just want to get to the table.”

Negotiators Sign Collective Agreement

Efling chairperson Sólveig Anna Jónsdóttir.

Unions and the Icelandic Confederation of Enterprise (SA) signed a collective agreement yesterday valid until November 1, 2022, RÚV reports. Following months of tense negotiations and several strikes, a contract which applies to more than 100,000 members of 30 different unions has been agreed upon.

Minimum wage raised ISK 90,000

Four minimum wage hikes over the contract period will raise the gross monthly minimum wages by ISK 90,000 ($754/€673), though the net raise amounts to around ISK 68,000 ($570/€508). Minimum monthly wage as of April 1 will be ISK 317,000 ($2,658/€2,371) and rise to ISK 368,000 ($3,087/€2,752) by the beginning of 2022. All union members will also receive a one-time ISK 26,000 ($218/€194) payment in May of this year.

The wage hikes in the collective agreement are flat-rate hikes rather than percentage-based. This means the lowest wages will proportionally increase the most of all income brackets. The collective agreement also makes provisions for further wage hikes dependent on companies’ performance and economic growth, a clause which the Icelandic Confederation of Labour (ASÍ) calls a landmark in collective agreement negotiation.

Shortened working hours

According to VR Union’s website, the contract also opens the possibility for shortened working hours, between 45 minutes and two hours per week, with the goal of making the labour market more family-friendly. Each workplace is to determine how the change will be implemented – with possibilities including shortening each workday to providing more vacation days.

Government introduces “standard of living” measures

Following the signing of the collective agreement, the government presented an extensive package of measures, the so-called “standard of living contract,” intended to improve terms of employment further than terms of the collective agreement alone. The measures in the contract are particularly targeted toward improving the standing of low earners and young families and are said to amount to an ISK 80 billion ($672m/€599m) investment.

The government contract outlines steps toward the elimination of indexation. Indexed annuity loans will be limited to 25 years maximum starting in 2020. The measures also include tax reductions and increased child benefits, which are expected to yield significant gains for low-earning households, particularly those with children.

The new collective agreement and government contract are said to create a foundation for interest rate cuts, which is believed to be one of the most impactful changes for Icelandic households, leading to more disposable income and lower debt.

Negotiators react

VR Union Chairperson Ragnar Þór Ingólfsson says he’s content with the collective agreement, saying it includes plenty of measures for the most disadvantaged groups. Ragnar says the contract takes genuine steps toward lowering interest rates and housing costs.

“This has been very difficult,” stated Efling Union Chairperson Sólveig Anna Jónsdóttir, “We fought until the very end.” Though she was satisfied with flat-rate wage hikes, Sólveig Anna said she would have liked to see more tax cuts for low earners. She referred to the agreement as a “ceasefire” between employers and workers, saying ASÍ would return twice as strong to the next negotiations.

Negotiators Reach Temporary Agreement, Await Government Input

Anna Sólveig Jónsdóttir Efling Union

The three-day hotel workers’ and bus drivers’ strike scheduled to start at midnight has been called off, RÚV reports. Several unions and the Icelandic Confederation of Enterprise (SA) have signed a declaration of intent which outlines the terms of agreement for workers’ contracts valid until November 1, 2022. Union leaders say it’s now up to the government whether the agreement is finalised – or negotiations return to the drawing board.

Taxes and housing are key factors

“We agreed on a framework for a potential contract,” stated Ragnar Þór Ingólfsson, chairperson of VR Union, “and it entails the government being part of the solution,” adding that negotiators would most likely meet with government representatives this morning. Though the details of the agreement have not been made public, Ragnar Þór says it could be acceptable for unions, the business community, and the government if all goes well.

Ragnar confirms that the government’s contribution concerns taxation and housing issues. Efling chairperson Sólveig Anna Jónsdóttir says her union has emphasised tax cuts for the lowest earners. “I hope the message has come across clearly and that we will receive the news today that that it will be so,” she stated, adding “I hope the government takes on the great responsibility they truly bear now.”

Rush hour strikes ongoing

Although a three-day hotel workers’ and bus drivers’ strike scheduled to start at midnight has been called off, bus drivers’ rush hour strikes took place this morning between 7.00-9.00am. Efling CEO Viðar Þorsteinsson stated that the union would be meeting with representatives of Strætó this morning.

Strikes Proceed Alongside Wage Negotiations

Hotel workers strike Reykjavík

Wage negotiation meetings between six unions and the Icelandic Confederation of Enterprise (SA) continued until 11.00pm yesterday, RÚV reports. Though talks continue this morning, scheduled bus driver and hotel worker strikes will proceed as planned.

Bus drivers on routes 12, 14, 15, 16, 17, 21, 24, 28, 35, and 36 parked their vehicles between 7.00-9.00am this morning and will do so again between 4.00-6.00pm this afternoon in a rush-hour strike that will continue throughout April – unless unions and SA reach an agreement. According to public transportation provider Strætó, the strikes will affect some 15,000 commuters, who will have to find other bus routes or opt for other modes of transport to reach their destination.

A three-day hotel workers’ and bus drivers’ strike will begin on Wednesday unless talks prove successful. VR and Efling Union members who work in these areas are also scheduled to strike April 9-11, 15-17, and 23-25, with a general strike beginning on May 1 which will stand until contracts are signed.

Wage negotiations have been ongoing since late last year. Efling CEO Viðar Þorsteinsson said talks were making progress, but refrained from making further comment.

Wage Negotiations Continue

Efling chairperson Sólveig Anna Jónsdóttir.

State-mediated wage negotiations between six unions and the Icelandic Confederation of Enterprise (SA) continue today, RÚV reports. Meetings were postponed yesterday, when Ragnar Þór Ingólfsson, VR Union’s chairperson, stated the uncertainty of WOW air’s situation affected the state of negotiations.

Ragnar stated that the parties have yet to discuss payroll, but added that he was optimistic the issue would be on today’s agenda and could be addressed quickly and efficiently. VR and Efling Unions have several strikes scheduled over the coming weeks. The next is a two-day strike beginning on March 28. Scheduled strikes will mostly affect tour buses, public bus service, and hotels.

Ragnar Þór stated it was too early in negotiations to say whether strike action would be postponed.

Fourteen strike violations reported

Fourteen strike violations were reported during a one-day strike organised by VR and Efling last Friday. The unions, however, do not intend to take action on the violations at this time. The most common violations included employees from other unions doing the work of striking union members, which Efling considers to be a strike violation while employers do not. Efling has stated they will increase surveillance during the upcoming strikes – if they go ahead as planned.