Collective Agreement Signed, Avoiding Strike and Lockout

VR Union. VR Chairman Ragnar Þór Ingólfsson and SA CEO Sigríður Margrét Oddsdóttir shake on the new collective agreement, March 2024

VR Union and the Confederation of Icelandic Enterprise (SA) signed a four-year collective agreement just after midnight last night, RÚV reports. The airport workers’ strike proposed by VR Union and the lockout proposed by SA have therefore been called off. VR Union’s chair Ragnar Þór Ingólfsson stated that the agreement is acceptable given the circumstances, but that the matter is not over yet.

“It’s been a long and hard period for us and it’s very gratifying that we’ve gotten this long-term collective agreement,” stated Sigríður Margrét Oddsdóttir, CEO of SA. The two parties signed an agreement based on a proposal submitted by the State Mediator yesterday. “The mediator submitted an internal proposal that was based on a certain special wage agreement resulting from the main wage agreement that we were finalising and which the negotiating committees of both parties agreed to,” Sigríður added.

Shift changes for airport workers

She stated that the wage hikes for VR Union members are the same as those that have been agreed on with other unions. They include a general percentage-based increase of 3.25% this year and 3.5% for the next three years.

Ragnar stated that the agreement includes an article on changing the shift schedule for Keflavík Airport workers, the group that had been set to strike later this month if an agreement had not been reached. Changes to the group’s shift schedule are to be agreed on by December 20 with the help of the State Mediator.

Last major signing in a series of negotiations

The collective agreement between VR and SA was the last of a series of collective agreements being negotiated on the Icelandic labour market for the coming years. VR Union also signed a collective agreement this morning with the Icelandic Federation of Trade (Félag atvinnurekenda) with terms similar to those of their agreement with SA.

New Collective Agreements Could Be Signed Today

Samningar Verkföll Sátti

Tens of thousands of workers in Iceland may have new collective agreements this afternoon, RÚV reports. Unions within the Icelandic Confederation of Labour (ASÍ) and the Confederation of Iceland Enterprise (SA) are set to sign an agreement at 5:00 PM this afternoon. There are, however, still a few wrinkles to be ironed out regarding the participation of municipalities.

Union leaders expressed optimism yesterday that a deal would be made today. The Chairman of the Federation of General and Special Workers in Iceland (SGS), however, stated this morning that the union would not sign the agreement unless all municipalities in Iceland agreed to subsidise school meals. “Simply because this particular measure is a huge measure in the path we’re taking. It is an ISK 5 billion [$36.6 million, €33.6 million] measure, and the state is contributing ISK 4 billion to subsidise school meals, and the local authorities are supposed to contribute ISK 1 billion,” stated Vilhjálmur Birgisson, chairman of SGS.

SGS represents some 44,000 workers in Iceland. Efling Union, which is also a part of the agreement set to be signed today, represents around 27,000 workers. VR, Iceland’s largest union by membership, is not a party to the collective agreement set to be signed this afternoon but continues negotiations with SA today.

Efling Union Workers to Vote on Strike

Strike efling hotel workers union

Janitorial staff in Efling Union will vote on strike action starting this Monday. If approved, cleaners in the Reykjavík capital area would strike on March 18. Efling representatives say the Confederation of Icelandic Enterprise (SA) breached trust in ongoing collective agreement negotiations by reopening salary negotiations with other unions.

Efling is Iceland’s second-largest worker’s union. Efling’s negotiating committee did not attend a meeting at the State Mediator’s office yesterday and are not expected to attend today’s meeting between negotiating parties. Efling representatives assert that SA offered other unions with the Confederation of Labour (ASÍ) higher salary hikes than previously negotiated without consulting with Efling.

Read More: Unions Split on Wage Negotiations

If approved, the strike would involve around 1,000 workers, according to Sólveig Anna Jónsdóttir, chairperson of Efling.

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.

Shaky Restart to Icelandic Wage Negotiations

State Mediator Ástráður Haraldsson

The first meeting in nearly two weeks between Icelandic unions and Confederation of Icelandic Enterprise (SA) was cut short yesterday, RÚV reports. The meeting began at 9:00 AM and was the first meeting since unions suspended negotiations nearly two weeks ago, calling them fruitless. The parties are meeting again today.

SA is demanding a four-year collective agreement be signed. Unions say they have agreed to the demand but ask for a clause in return that would give them a way out of the agreement if inflation and interest rate targets are not met. SA would not agree to such a clause, which was the reason negotiations were suspended.

The parties have reportedly already reached an agreement regarding salaries.

It is less than a year since the last collective agreement negotiations between SA and Efling Union were concluded after a tense and drawn-out negotiation period that involved strike actions. Unions have called on businesses and the government to take more concrete action to fight the high inflation and high interest rates that are impacting Icelandic households.

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.

Wage Negotiations Halted

Sólveig Anna Jónsdóttir

The coalition of unions has ended its negotiations with the Confederation of Icelandic Enterprise (SA) on a new collective bargaining agreement. The coalition claims that negotiations were not moving forward, Vísir reports.

Disagreement on economic targets

In a press release, the coalition claims that a clause on the development of inflation and interest rates became the point of contention. The coalition 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.

“The coalition is deeply disappointed by SA choosing to derail negotiations because of this clause,” the release said. “It’s especially regrettable, since both parties have worked hard to reach an agreement on modest salary increases and an agreement on salaries had already been reached in principle. The signing of new agreement was within our grasp.”

The coalition claims that all long-term agreements in recent decades have included a clause such as the one in dispute. “This would mean that workers alone would carry the risks if the targets aren’t reached. It is strange that SA is not ready to cement in a long-term agreement the goals they have often claimed are most important to them: lowering inflation and interest rates.”

Government benefit increases discussed

Negotiations have been ongoing for weeks, with parties also conferring with government ministers. The unions have called for increased government spending on child and housing benefits in exchange for modest salary increases. “We’ve been able to deepen the conversation on possible scenarios and how the government can be involved,” said Prime Minister Katrín Jakobsdóttir after a meeting with union coalition on Thursday. “I’ve repeatedly said that we are willing to back a collective bargaining agreement that supports inflation targets and creates the conditions to lower interest rates. All of us agree on this point.”

Wage Negotiations Advance, Media Ban Imposed

State Mediator Ástráður Haraldsson

Union and business representatives have restarted wage negotiations after a break of almost a week, Vísir reports. The parties have agreed on a basis for the negotiations, according to State Mediator Ástráður Haraldsson. One union leader said IKEA’s price reductions are a good contribution to the negotiations.

Media ban imposed

The negotiations impact the working conditions of some 93% of workers on the general labour market in Iceland. After signs of progress in the negotiations appeared, Ástráður banned all parties from speaking with the media, a move often instituted when an agreement seems nigh.

Price reductions and freezes a positive contribution

Vilhjálmur Birgisson, Chairman of the Federation of General and Special Workers in Iceland, did, however, speak to a Vísir reporter on the price reductions announced by IKEA in Iceland, calling them a positive contribution to the negotiations. The reductions could help in bringing down inflation and interest rates, “which are making Icelandic households miserable,” he stated.

Vilhjálmur pointed out that BYKO has also decided to freeze prices for six months, and encouraged other businesses to follow the two companies’ example.

Optimism in Ongoing Wage Negotiations

Westman Islands fish processing plant

The ongoing collective agreement negotiations in Iceland are going well, according to union representatives. Unions are hoping to negotiate a three-year agreement while the Confederation of Icelandic Enterprise (SA) is hoping for a five-year agreement. Both sides have a willingness to negotiate, but say the involvement of the government will be crucial.

“We are ready to negotiate and there’s a good spirit between the contracting parties,” stated Vilhjálmur Birgisson, chairman of the Federation of General and Special workers in Iceland (SGS). “We have reached the point now where it’s quite clear that we need to speak to the government before the weekend, to know what their involvement will be in these agreements.”

Price of services and goods rising

January is the month when fee hikes for public services take effect in Iceland. Prices for goods have also been rising alongside high inflation for more than a year. Both unions and the Confederation of Icelandic Enterprise (SA) have called on municipalities and businesses to keep price hikes to a minimum this year to ease the wage negotiations.

Salaries not a sticking point

Vilhjálmur says that wages themselves are not a sticking point in the negotiations at this time, and speculates that the parties can agree on a period between three and five years for the contract.

It is less than a year since the conclusion of very tense and prolonged collective agreement negotiations between SA and Efling. Tension was also high in November after the current negotiations began, and they were put on hold by union leaders due to proposed municipal fee hikes.

No Decision on Strikes in Latest Air Traffic Controllers’ Talks

Keflavík Airport

Negotiations between air traffic controllers and Isavia failed to produce an agreement earlier today, RÚV reports. The parties will reconvene at the State Mediator’s office on Friday, with no further strike actions currently planned by air traffic controllers.

Negotiations progressed slowly

A negotiation meeting that took place earlier today between air traffic controllers and the Confederation of Icelandic Enterprise, representing Isavia (the company that operates all public airports in Iceland), did not yield results.

The disputing parties have decided to meet again at the office of the State Mediator on Friday. Arnar Hjálmsson, Chairman of the Air Traffic Controllers Association, told RÚV today that no decisions had been made among air traffic controllers regarding further strike action. 

As previously reported on IR, air traffic controllers previously ceased work for four hours in strike actions over three days before Christmas but postponed the fourth due to the volcanic eruption on the Reykjanes Peninsula. The collective agreement of air traffic controllers expired on October 1 and negotiations have progressed very slowly.