New labor deal should not unsettle other contracts, employers say

A new labor agreement with VR, LÍV and Fagfélögin should not put other contracts at risk, Bjarni Benediktsson, director of the Confederation of Icelandic Enterprise, told mbl.is.

The confederation signed an extension of its collective agreement with the three unions just before 4 p.m., when the deadline to terminate the contracts over a failure to meet their conditions expired.

Bjarni said the deal includes a condition that was not part of other collective agreements. It concerns inflation thresholds for next year, with the parties looking at both 12-month inflation and the six-month trend. He said the agreement develops an offer the confederation had previously made, which another group had declined.

Halla Gunnarsdóttir said the parties now need to finalise the wording, but have agreed on the substance. She said the deal had averted not only the possible termination of the contracts but also a breakdown in relations that could have undermined trust ahead of future negotiations. The parties would now work together to bring down interest rates and inflation, she said.