Reykjavík to dissolve its collective bargaining committee

Reykjavík City Council’s executive committee has approved transferring the city’s collective bargaining mandate to the Association of Icelandic Local Authorities, a move expected to save 65.5 million Icelandic krónur annually, mbl.is reports. The proposal still requires final approval by the city council.

The city’s collective bargaining committee was established in 1989 and has handled Reykjavík’s bargaining mandate ever since. The city has also participated in joint bargaining through the association over primary school agreements since responsibility for the schools was transferred from the state to local authorities, as well as in agreements with preschool teachers.

The proposal was submitted by Mayor Hildur Björnsdóttir and approved by five votes to two, with support from the Independence Party, the Reform Party, the Centre Party and the Progressive Party. Representatives of the Social Democratic Alliance voted against it.

Alongside the committee’s dissolution, the city plans to review its joint ownership and responsibilities regarding Jafnlaunastofa, an office jointly owned by Reykjavík and the association. Reykjavík owns 50 per cent of the office.

The proposal’s supporting documents say cooperation among public-sector employers on labour issues has increased considerably in recent years. Reykjavík, other municipalities and the state have developed a joint wage policy, while Reykjavík and the association established Jafnlaunastofa.

The documents state that joint collective bargaining could strengthen municipalities’ negotiating position. They also argue that developments in the public-sector labour market, particularly discussion and arrangements concerning the valuation of public-sector jobs, justify a review of Reykjavík’s separate bargaining policy.

Transferring the bargaining mandate to the association is expected to cost the city 48.4 million krónur. This would be offset by savings of 18.1 million from dissolving the city’s committee and an estimated 40 million in efficiency savings resulting from changes to the work of the city’s labour affairs office.

The largest saving would come from ending Reykjavík’s contributions to Jafnlaunastofa, which are estimated at 55.5 million krónur because of the city’s 50 per cent ownership. The total savings are estimated at 113 million krónur before the transfer cost is deducted, leaving a net annual saving of 65.5 million.

Social Democratic Alliance representatives criticised the proposal, questioning whether elected representatives in Reykjavík were seeking to avoid political responsibility for collective agreements covering the city’s employees. Reykjavík has nearly 9,300 full-time equivalent positions.