State Arbiter Seeks to Settle Airport Labour Dispute

Keflavík Airport

The State Conciliation and Mediation Officer has called for a meeting at noon today, RÚV reports, in the hopes of working out a deal between the union of public servants Sameyki, the union of aviation workers, and management.

Negotiating since 2023

As reported, these workers have been trying to negotiate a new contract since 2023, to no avail.

Things came to a head last month, as the unions involved felt no headway was being made in their negotiations with SA (the Confederation of Icelandic Enterprise), who were operating on behalf of Isavia, the company which conducts operations for Keflavík International Airport. This led to the overwhelming majority of union members–80%–voting in favour of a series of work stoppages.

Government intervention

The purpose of the State Conciliation and Mediation Officer, who represents the government, is to intervene and serve as a third party between labour and management in the hopes of drawing up a labour deal that both sides can live with, even if just temporarily.

Strikes and work stoppages at airports are a particularly sensitive matter, given how much revenue is generated through tourism. The intended work stoppages would occur from 4:00AM to 8:00AM on the 10th, 16th, 17th and 20th of May, and would bring departures to a halt. That being the case, time is of the essence as these three parties meet to work out a deal.

Collective Agreement Negotiations Suspended

vr union iceland, Ragnar Þór Ingólfsson

The labour movement cannot drive down inflation alone, the chairman of Iceland’s largest labour union told Vísir. He says wage negotiations have been put on hold due to announced municipal fee hikes as well as what he calls the government’s inaction. Inflation has measured 8% over the past 12 months in Iceland and rose by 0.1% last month.

The aim of labour and business representatives was to complete a new collective agreement by January 31, when the current short-term agreement expires. It is customary for Icelandic municipalities to announce changes to their fees annually, and these changes normally take effect on January 1. VR Union Chairman Ragnar Þór Ingólfsson says unions will have to re-examine the situation once these fee changes have been confirmed, but say that municipalities have proposed fee hikes between 5-30%.

“It’s just a grave situation,” Ragnar Þór stated. “We are going backwards. The government regarding housing issues, regarding fee hikes. We are seeing the cost of living index rise and prices rise. There is upward pressure everywhere. That all somehow works against a good result being reached in the wage negotiations. So all we can do is wait. We can’t be trying to do something alone on some boat in the middle of the ocean when no one is going to participate.”

Union Leaders Express Alarm at Central Bank’s Interest-Rate Hike

Ásgeir Jónsson, Governor of the Central Bank of Iceland

The Central Bank’s decision this morning to raise key interest rates by 1.25% has sparked a strong response from union leaders. Sonja Ýr Þorbergsdóttir, Chair of BSRB, has stated that the government needs to act to protect the most vulnerable. The Chair of the Federation of General and Special Workers in Iceland (SGS) has remarked that Icelandic households are being “devastated.”

Government needs to respond

In an interview with the radio programme Morgunvaktin (i.e. the Morning Shift), Sonja Ýr Þorbergsdóttir, Chair of BSRB, stated that it was necessary for the government to respond to the Central Bank’s decision to raise key interest rates, which currently sits at 8.75%.

“These actions have the greatest impact on those who earn the least. After all, inflation bites them the hardest. The government needs to take action to support this group, so as to see all of us through this period.”

As noted by RÚV, a new survey by Varða found that around half of wage earners are finding it difficult to make ends meet, with single parents and individuals in the rental market being particularly affected.

“It appears that action needs to be taken to support them. Then we look at the child benefit system and also that there needs to be some kind of rental brake and more support for those who are on the rental market,” Sonja observed. Interest rate hikes will hit those who have signed non-indexed mortgages at variable rates the hardest.

“There is also this question of how to assist this group. We’ve been hoping to ensure that overall housing support, whether you own or are renting, takes your financial situation into account,” Sonja concluded by saying.

A “knockout blow”

Finnbjörn A. Hermannsson, President of the Icelandic Confederation of Labour (ASÍ) told Mbl.is that the Central Bank’s decision to raise interest rates was “a knockout blow” to households in the country.

“Naturally, this is a complete knockout blow for households in the country. It’s that simple. It seems to me that the Central Bank is seeking recourse in the banks’ propaganda department. The Central Bank is clearly afraid of the banks, content to allow households to suffer … everyone seems to have realized, aside from the Central Bank itself, that the decision to raise interest rates only serves to fuel inflation.”

Icelandic households are being “devastated”

Vilhjálmur Birgisson, Chair of the Federation of General and Special Workers in Iceland (SGS), told Mbl.is. this morning that he was “shocked” by the Central Bank’s decision.

“I can say that I am utterly shocked over this path that the Central Bank has chosen. Let’s keep in mind that since we signed the collective agreements, policy rates have increased by 3%.” Vilhjálmur added that this single increase was just below the total interest rate increases of other nations since the start of the Ukrainian war.

When asked what effect he thought this increase would have on the upcoming collective bargaining negotiations this fall, Vilhjálmur responded with dismay: “I don’t know how on Earth we’re going to manage this situation that has arisen among Icelandic households. It’s absolutely crazy.”

“In the end,” Vilhjálmur continued, “inflation will start to decrease and, believe you me, the Central Bank will tout its success and say, ‘You see, we’ve succeeded.’” He added that Icelandic homes were being “devastated” by the Central Bank’s decision.

“The reason for the high rates in Iceland is the indexation. In this country, the bank managers sit back because they know they’re protected on all sides by the indexation; it’s become completely intolerable.”

At a press conference this morning, Þórarinn G. Pétursson, the Central Bank’s chief economist, addressed the idea that the increase in the number of households with indexed loans meant that the Central Bank’s monetary policy was no longer effective:

“Unlike what has been claimed in the public discourse, this does not matter. The influence of monetary policy is the same whether the share of index-linked loans is large or small,” he observed. “Claims that monetary policy pushes people into index-linked loans are true. Claims that it affects the mediation process of the Monetary Policy Committee are false.”

What’s the Status of the Efling Negotiations?

efling strikes iceland

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.

This is a developing story and will be regularly updated. For more context on the labour situation in Iceland, listen to Deep North Episode 8: Wage Negotiations.

Proposed Lockout Legal, Labour Court Rules

Halldór Benjamín Þorbergsson SA Icelandic Confederation of Enterprise

The Icelandic Confederation of Enterprise (SA) had the legal right to call a lockout of Efling Union workers in the ongoing wage negotiations between the two parties, Iceland’s Labour Court has ruled. SA was also legally allowed to let all of its member companies vote on the lockout, even those that do not have Efling Union workers on their payroll, according to the ruling. The lockout and workers’ strikes have been postponed while Efling members vote on a mediating proposal. RÚV reported first.

Lockout would affect over 20,000 workers

The Labour Court case is the fourth legal case filed in Iceland’s most tense wage negotiations in decades. When negotiations came to a halt in February, SA held a vote on whether to impose a lockout on Efling workers. 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, nor accrue benefits and leave.

All member companies of SA were permitted to vote on the proposed lockout, and it was approved with just under 95% of the votes in favour. The Icelandic Confederation of Labour (ASÍ), Efling Union’s parent organisation, protested the fact that companies without Efling workers on their payroll were permitted to vote on the lockout and filed a case with the Labour Court, demanding the lockout be deemed unlawful. The Labour Court has now ruled in favour of SA.

Vote on mediating proposal

The lockout has been postponed until March 9, as Efling members are currently voting on a mediating proposal put forth by the state mediator on March 1. Voting closes at 10:00 AM on March 8. As such, the ruling has no immediate effect on the negotiations, though it would if Efling members reject the mediating proposal. Efling workers’ strikes, which had led to the temporary closure of several hotels in the Reykjavík capital area, have also been postponed while the votes are cast.

Not Paying Workers During Lockout is Sólveig’s Decision, Efling Vice-Chair Says

Sólveig Anna Jónsdóttir

There are no regulations that prevent Efling Union from paying workers during the lockout set to begin on March 2, according to the union’s Vice-Chair Agnieszka Ewa Ziółkowska. The statement contrasts with previous assertions from the union’s Chairperson Sólveig Anna Jónsdóttir, who has stated that Efling would not make payouts to workers in the case of a lockout. In a post on her Facebook page, Agnieszka stated not providing financial support to workers affected by the lockout would be Sólveig’s personal decision, and criticised Sólveig for being “willing to have her low-wage members suffer.”

The Icelandic Confederation of Enterprise (SA) has approved a lockout of some 20,000 workers set to begin on March 2, the latest escalation in a fraught collective agreement negotiation between SA and Efling. During the lockout, Efling workers would not be permitted to show up to their employment. As such, they would not receive wages, accrue leave, or receive pension payments. Efling is currently paying striking members from its labour dispute fund, but a notice from the union stated that it would not make payments in the case of a lockout. According to the notice, “the union does not hold responsibility for a lockout and the labour dispute fund cannot sustain such payments.”

“The members of Efling have the right to know that the rules of the union aren’t stopping their chairman from paying from the fund in the case of the [lockout],” Agnieszka wrote on Facebook. “Its just her decision.” Agnieszka added that paying workers affected by the lockout was the “right thing” to do.

Lockout Affecting 20,000 Workers in Iceland Approved

Halldór Benjamín Þorbergsson SA Icelandic Confederation of Enterprise

Members of the Icelandic Confederation of Enterprise (SA) have approved a lockout of some 20,000 workers set to begin on March 2 at noon, RÚV reports. CEO of SA Halldór Benjamín Þorbergsson has called it a “last resort” to force the conclusion of a collective agreement with Efling Union. Efling Chairperson Sólveig Anna Jónsdóttir says SA is using a lockout to force the government to step into the conflict.

Vast majority vote in favour of lockout

Nearly 88% of companies in SA voted on the lockout, with 94% voting in favour. During the lockout, Efling workers would not be permitted to show up to their employment. As such, they would not receive wages, accrue leave, or receive pension payments. Exceptions would be granted for workers in healthcare and other essential jobs, according to SA. Efling is Iceland’s second-largest union and the lockout would greatly impact the entire Icelandic economy.

In a press conference yesterday, Halldór Benjamín stated that the lockout was a response to Efling workers’ ongoing strikes, which led several hotels to temporarily close their doors. While those strikes are ongoing, Efling has postponed further strikes scheduled to begin on February 28, of additional workers in security companies, cleaning companies, and hotels.

Lockout is an attempt to involve government, Sólveig says

“This play is aimed at the government,” Efling Chairperson Sólveig Anna Jónsdóttir told RÚV when asked about the lockout. “Because Halldór Benjamín cannot make a collective agreement with Efling, he’s is waiting for the government to come and release him from the predicament he’s gotten into, and of course, we will wait and see if that happens.” Both Prime Minister of Iceland Katrín Jakobsdóttir and Labour Minister Guðmundur Ingi Guðbrandsson have stated it is in SA and Efling’s hands to reach an agreement.

When asked whether the dispute could be resolved without government intervention, Sólveig answered: “I believe at this point in time that nothing is more obvious than the fact that SA does not intend and does not want to enter into a collective agreement with Efling.”

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.

Confederation of Enterprise to Vote on Lockout Against Efling

efling strike iceland

The board of SA, the Confederation of Icelandic Enterprise, has agreed to present a vote to its member companies to initiate a lockout against the members of the Efling trade union.

According to SA chairperson Halldór Benjamín Þorbergsson, SA members will be presented with a vote today. Stating that negotiations with Efling have gone as far as they can, the potential lockout would represent an escalation of the so-far unproductive negotiations between the two labour organisations. If the lockout goes through, it would potentially affect the entire Efling membership, some 20,000 workers. Efling is one of the largest trade unions in Iceland and a lockout against the union would have significant effects on the entire economy.

Read More: No Postponement of Strikes

Halldór was careful to note in a statement that the tactic has been used sparingly by SA throughout the decades, but that the uncooperative tactics in use by Efling have forced his hand. He has been quoted as referring to the vote as an “emergency measure.”

“In short, SA can initiate a lockout, just like Efling can threaten a strike,” Halldór clarified. “When the vote is over, and let’s assume it’s approved, we will hand over a document to the leadership of Efling notifying them of the lockout. The state mediator will also receive a copy. Just like in the case of strikes, it has seven days to be implemented. We believe that we have reached such a critical moment in this dispute that we can no longer allow Efling to paralyze society as a whole with a hand-picked group of employees.”

Halldór likewise stated that the vote would concern all members of Efling, but that a potential lockout will be implemented with specific regard to the conditions SA members find most suitable.

Read More: Efling Suspends Strikes

The vote comes after threats by Efling chairperson to resume strikes, which had been postponed, on Sunday.

Locked-out workers would not be allowed to show up to their usual employment. As such, they would not receive wages, accrue leave, or receive pension payments.

Efling Members to Vote on a Near 1700-Person Strike Thursday

efling union hotel strike

Last Sunday, Efling’s negotiating committee unanimously approved three additional strike actions, Vísir reports. If these actions are approved by union members, an additional 1700 workers would go on strike by the end of the month.

Voting to begin on Thursday

On Sunday, February 12, the negotiating committee of the Efling union unanimously approved the motion to put three strike notices to a vote among members. If approved, approximately 1700 Efling members are set to go on strike. These include employees of hotels, including the hotel chains Centerhotels and Keahótels; security companies, including Securitas and Öryggismiðstöðin; and cleaning companies, including Sólar and Dagar, alongside other smaller cleaning companies.

“Efling’s previous three strike notices were approved with a decisive majority and a good turnout,” a statement from Efling notes. “ Voting starts at noon on Thursday and ends at 6 PM on Monday.”

The announcement also quotes Sólveig Anna Jónsdóttir, Chair of Efling, as saying: “Over the last few weeks, the voting on strikes has clearly demonstrated that essential workers in all sectors of the labour market in the capital region are united. Our demand is for a fair wage agreement that takes into account the circumstances and composition of our members. I encourage negotiating parties to strike an agreement with us.”

700 already on strike – and more to go on strike tomorrow

Last week, nearly 700 Efling union members went on strike at seven hotels belonging to the Íslandshotel chain in Reykjavík – and tomorrow is expected to see more union members join those strikes, including workers employed by other hotels, oil truck drivers in the capital area, and employees of the shipping company Samskip.

Yesterday, the Court of Appeal (Landsréttur) ruled that the Efling union does not need to hand over its membership registry to the state mediator. Following the ruling, the state mediator was given permission by the Minister of Social Affairs and the Labour Market to step aside. The Director General of the Confederation of Icelandic Enterprise (SA), Halldór Benjamín Þórbergsson, stated that he regrets the mediator’s decision.

Today, Halldór Benjamín told Vísir that he did not rule out the possibility of the government intervening to block Efling’s strikes. Otherwise, society would become paralyzed by or after the weekend.

“In the coming days, society will feel the effects of strikes in a tangible way. I predict that either side of the weekend, most of our daily lives will be paralysed. Politicians cannot afford to stand on the sidelines when such a situation has arisen,” Halldór Benjamín stated.

Court of Appeal Overturns Verdict, Mediator Steps Aside

Héraðsdómur Reykjavíkur Reykjavík District Court

The Court of Appeal (Landsréttur) has ruled that the Efling union does not need to hand over its membership registry to the state mediator, RÚV reports. Following the ruling, the state mediator requested permission from the Minister of Social Affairs and the Labour Market to step aside. The Director General of the Confederation of Icelandic Enterprise (SA) has stated that he regrets the mediator’s decision.

Court of Appeal overturns ruling

Yesterday, the Court of Appeal overturned the Reykjavík District Court’s ruling in the labour dispute between the Efling union and SA: the Efling union is not legally obliged to hand over its membership registry prior to voting on the mediator’s mediation proposal, RÚV reports.

The court ruled that the state mediator is allowed to take the initiative to hold a vote; however, nowhere does the law state that a party in a labour dispute is obliged to hand over its membership registry to the state mediator prior to voting takes place.

The mediator’s authority to demand membership registries was enshrined in a law on mediation in labour disputes – which was abolished in 1978. The verdict of the Appeal Court quoted a speech by the  then Chairperson of the Social Affairs Committee who advocated the change. In the speech, the Chairperson stated that the purpose of the repeal was to reduce the power or position of the mediator.

RÚV notes that Efling and the state mediator struck an agreement last week to accept the court’s decision and abstain from appealing the decision of the Court of the Appeal to the Supreme Court.

In a statement from Efling sent to the media yesterday, the union demanded that state mediator Aðalsteinn Leifsson resign from the dispute immediately. “This is the worst imaginable verdict on the working methods of the state mediator,” Sólveig Anna Jónsdóttir, the Chair of the Efling union, was quoted as saying.

Guðmundur accepts Aðalstein’s request

After the ruling by the Court of Appeal yesterday, Aðalsteinn Leifsson told the media that he would be requesting permission from the Minister of Social Affairs and the Labour Market, Guðmundur Ingi Guðbrandsson, to step down from his role as mediator between Efling and SA.

“My opinion is that, under the circumstances,” Aðalsteinn Leifsson told Vísir yesterday, “the character should always give way to the issue, which is why I suggested to the Minister of Social Affairs and Labor Market that appointing a special mediator in this dispute, or a mediating committee, might prove wise. I would then step aside in this particular dispute and pass the baton over to others, in hopes that they find a solution. The minister is currently mulling my suggestion over.”

Yesterday evening, Vísir reported that Guðmundur Ingi had accepted Aðalsteinn’s request and that an assistant mediator would be appointed to resolve the dispute.

Expects further developments over the coming days

In an interview with RÚV yesterday evening, Halldór Benjamín Þorbergsson, Director General of SA, said that he regretted the state mediator’s decision to withdraw from the wage dispute – but that he supported his decision. Halldór Benjamín added that yesterday’s ruling did not change the fact that the mediating proposal was valid and legitimate in all respects.

“There are indeed a lot of twists and turns in this dispute,” Halldór Benjamín told RÚV, “and I think that there will be even more twists and turns in the coming days.”