VR weighs terminating collective agreement

VR sees a real chance it will terminate its collective agreement with the Confederation of Icelandic Enterprise (SA), union chair Halla Gunnarsdóttir told mbl.is. A clause in the agreement was triggered after inflation in August exceeded 4.7 per cent, allowing the parties to terminate it.

VR’s board and council were due to meet at 5.30 p.m. Monday to discuss the situation and next steps. The board, which also serves as the union’s negotiating committee, was expected to seek authorisation to end the agreement and then decide whether to do so if SA did not make an acceptable response.

VR has until 4 p.m. Thursday to formally terminate the agreement. Gunnarsdóttir said SA had so far made no proposal that would change the union’s view that the agreement should be ended.

“We have been very clear that we will not let our members face continued wage cuts,” she said, referring to groups whose wages have risen more slowly than inflation during the agreement, which has been in force since February 2024. She said members were also facing high interest rates and substantial costs.

Gunnarsdóttir said VR had submitted several proposals to SA but had received little response. The union first sought wage adjustments, which SA rejected, saying it was not prepared to make wage changes next year. VR then proposed new conditions that would allow it to leave the agreement if members’ real wages continued to fall. It also proposed a wage increase on January 1, 2028, for workers receiving general pay rises, to make up the difference between wage growth and inflation.

“We still haven’t received any response of substance,” Gunnarsdóttir said. “I’m beginning to think the Confederation of Icelandic Enterprise simply wants this agreement to fall.”