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 Leaders Sharply Criticise Minister’s Remarks about Worker Demands

Samningar Verkföll Sátti

Union leaders responded swiftly to Minister of Foreign Affairs Bjarni Benediktsson, following statements made by him that they need to temper their demands due to the amount of money that may be paid out to Grindavík residents.

Currently, a broad coalition of labour unions are in negotiations with the Confederation of Icelandic Enterprise (SA). The subjects of these talks range from flat króna-amount pay rises to how many years the next collective bargaining agreement should cover; management is hoping for longer term contracts, while unions are aiming for shorter term.

These talks have been difficult and slow-going, but have not yet reached the point where the matter would be referred to the State Conciliation and Mediation Officer.

Have to see “the big picture”

Speaking about the negotiations on the roundtable discussion show Silfrið, Bjarni Benediktsson cautioned that labour unions should consider the amount of money the state intends to pay out to Grindavík residents when negotiating with management.

“When the state, and all of us, take on such a big project as the Grindavík matter, it of course has an effect on our ability to stretch ourselves towards the demands of others, who are at the same time asking us to do something significant,” he said.

“I think we should insist that people consider the big picture,” he added. “It would be unwise of all parties involved to remove themselves from the larger context that we are all a part of.”

“Tasteless” to use Grindavík

Ragnar Þór Ingólfsson, director of the labour union VR, told RÚV that these remarks did not come as a surprise, but also does not have a good impact on the ongoing labour negotiations.

He added that the amount of money workers are asking for, when compared to the amount of money the state paid out to companies early in the pandemic and after the 2008 financial collapse, as well as how much money is in the disaster fund, come out to “small change”, adding that it was “very tasteless and disgusting to use the situation in Grindavík in order to work against the necessary and important goals that we have laid out in these negotiations.”

Sólveig Anna Jónsdóttir (shown above), the director of the labour union Efling, told Vísir that they are very much aware of the situation in Grindavík, and support the residents getting everything they need. At the same time, she said, these negotiations will directly affect some 115,000 people, or about 73% of the labour market. As such, the government cannot just push the matter aside.

Negotiations between these labour unions and management are still ongoing.

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.”

Deep North Episode 8: Wage Negotiations

hotel workers strike Reykjavík

With the dust from this fall’s leadership turmoil still unsettled, one-third of wage contracts need to be re-negotiated between their trade union and SA, the employers’ union. High interest rates and inflation have made this a particularly tricky negotiation round, and we briefly outline why it matters.

Note that wage negotiations are still ongoing. Read the latest coverage here.

VR and SA Agree on Contract

iceland trade union

VR Union and SA, the Federation of Icelandic Employers, have settled on a short-term contract that will be valid through next year.

The agreement will retroactively cover November of this year, and includes a 6.75% wage increase, in addition to increased holiday bonuses and adjusted wage tables for hourly workers.

Some have noted similarities between the recent VR contract and that recently reached between SGS and SA.

See also: Possible End in Sight for VR, SA Negotiations

The signing was a rather chaotic affair with representatives from throughout the country present. Official statements were relatively brief, given the long and tiring process it has been so far.

Kristján Þórður Snæbjarnarson, chairman of the Electrical Industry Association of Iceland, stated to RÚV. “We were trying to press these negotiations as far as possible. I think this is the best outcome under the circumstances.”

Notably, Ragnar Þór Ingólfsson, chairperson of VR union, gave no interview after the signing.

After the signing, representatives from both the trade unions, SA, and state mediators sat down to celebrate over waffles, a tradition in Icelandic labour contracts.

In Focus: Wage Negotiations

In Focus: Wage Negotiations

hotel workers strike Reykjavík

Power vacuum When Drífa Snædal resigned from her position as chairperson of ASÍ (The Icelandic Confederation of Labour) this summer, she left a power vacuum at the heart of Iceland’s largest organisation of trade unions. The Icelandic Confederation of Labour consists of 47 trade unions and represents some 2/3 of Icelandic organised labour, around 133,000 […]

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Possible End in Sight for VR, SA Negotiations

vr union iceland, Ragnar Þór Ingólfsson

After a late night of fruitless negotiations between VR and SA, the Federation of Icelandic Employers, an end to bargaining may be in sight.

The Assistant State Mediator confirmed that negotiations will resume at 13:00 today, when a final contract will be signed.

Read more: Rising Interest Rates Complicate Wage Negotiations

The details of the final contract are not yet public, but an increased living wage in the face of inflation and rising interest rates has been talked about for some time now.

The current negotiations between VR and SA have been ongoing since November 14, but the last 24 hours have been under a media embargo, given the potentially sensitive nature of the details.

Efling Trade Union has also had a long and contentious negotiation process.

Other unions have also agreed to shorter-term contracts as a compromise in a difficult negotiating climate.

Read more: VR Leaves Negotiating Table

A press conference will be held later today a 14:30 in which Prime Minister Katrín Jakobsdóttir, Minister of Finance Bjarni Benediktsson, and Minister of Infrastructure Sigurður Ingi Jóhannsson will give their statements on the importance of the agreement for the labour market.

While the content of the agreement is not yet known, in addition to basic wage increases, sources suspect increased measures in child and housing benefits.

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 Leaves Negotiating Table, Finance Minister Denies Blame

Minister of Finance Bjarni Benediktsson

The Prime Minister has expressed disappointment in VR’s decision to break off wage negotiations with SA Thursday evening. The Minister of Finance does not believe his comments on the Central Bank’s interest-rate hike were “the deciding factor,” RÚV reports.

Mixed messaging among ministers

This morning, Ragnar Þór Ingólfsson, Chair of VR (the Store and Office Workers’ Union) confirmed to RÚV that he had walked out of negotiations with SA (the Confederation of Icelandic Enterprise) last night, which had recently been referred to the state mediator.

The reasons, Ragnar stated, were “numerous,” although the incongruous messaging of Prime Minister Katrín Jakobsdóttir and Finance Minister Bjarni Benediktson concerning the Central Bank’s interest-rate hikes “played a role.

Prior to the Central Bank announcing that it would be raising interest rates, VR and SA had been aiming toward an agreement predicated on less inflation and a lower interest rate:

“But then the Central Bank announced a hike, which, in reality, altered the premises from which we had hoped to proceed,” Ragnar Þór told RÚV. “The PM subsequently invited us to a meeting yesterday morning, in which she attempted to reset the parties’ expectations. It was a pretty good meeting.”

Ragnar observed that the parties proceeded to Karphúsið (the facilities of the state negotiator) where they hoped to continue their negotiations at noon.

“We’ve hardly taken our seats when an announcement is made by the Minister of Finance in which he echoes the Governor’s (the Central Bank) message, which is completely at odds with what the PM had told us. After that, the negotiations became quite difficult. And when it became clear the kind of ideas that SA were entertaining regarding a 14-month contract, which we had been discussing, it was obvious that there was no ground to continue negotiating.”

An interest-rate hike of some consequence

Following a cabinet meeting this morning, Katrín Jakobsdóttir discussed Thursday’s wage-negotiation collapse with RÚV. Asked if she had wished that the Central Bank had not raised interest rates, Katrín responded thusly:

“The Central Bank makes its own decisions in accordance with the statutory aims under which it operates. It’s not my place to comment on those decisions, but it is clear that this decision led to the collapse of negotiations.”

“I regret the fact that VR decided that it was appropriate to leave the negotiating table at this time, but I hope that we can find some kind of opening,” Katrín added.

“Best to speak honestly”

This morning, Bjarni Benediktsson was asked to respond to Ragnar Þór’s claim that his comments, justifying the Central Bank’s actions, had been a deciding factor in the collapse of negotiations.

“No, I think it’s always best to be completely honest about things,” Bjarni remarked. “And I just saw an announcement from VR where no mention is made of my comments; it’s likely that the premises had changed following the Central Bank’s decisions, premises which likely were the basis for the parties’ negotiations.”

Bjarni told RÚV that it was clear that inflation would rise and that it was only natural for the Central Bank to employ those tools at its disposal to keep inflation in check:

“But the truth is that the inflation forecasts have worsened, and the ghost of inflation is set to follow us a bit longer, and inflation will be higher next year than we had hoped just a few months ago. The tension in the economy runs high. We’re nearing maximum production capacity and the level of employment is very high. Consumption is high, which is one of the factors to which the Central Bank has pointed. It doesn’t really surprise me that the Central Bank continues to send these clear messages, that it will continue to fight inflation, and it’s desirable that all of us cooperate to do the same.”

VR is Iceland’s largest trade union, representing some 40,000 workers.


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.