Employers reject union leaders’ claims of betrayal

The Confederation of Icelandic Enterprise has rejected claims by labour leaders that it betrayed workers, saying it has honoured collective agreements. The organisation made the statement in a release published by mbl.is.

It said disappointment over inflation and interest rates was understandable, but disagreement over how to respond did not justify accusations of betrayal. The organisation said economic conditions had worsened more than expected and employers’ costs had exceeded forecasts made when the agreements were negotiated, but it had continued to argue that they should remain in force.

High interest rates are squeezing businesses as well as households, the statement said. It added that there was no room for wage increases beyond those already agreed. Joint analyses by the organisation, the Icelandic Confederation of Labour and the government show that purchasing power has risen across all groups in society, according to the release.

The organisation said many companies had recently announced price freezes or cuts. It also called for measures to reduce cost pressures, including restraint on tax and tariff increases. The statement warned that substantial tax increases were expected in the new budget and said the organisation wanted to continue working with the labour movement and the government to preserve the agreements and support lasting stability.