Unions extend labour deal to protect pay rises and secure reforms

Union leaders have agreed to extend collective agreements with employers, preserving scheduled wage increases and securing government measures, Efling representative Sólveig Anna Jónsdóttir writes in a column published by mbl.is.

Jónsdóttir signed the agreement on Tuesday evening alongside the leaders of SGS and Samiðn. Together, they represent about 60 per cent of workers in Iceland’s private sector. Efling’s board of representatives later approved the agreement unanimously.

Under the existing deal, workers paid according to wage scales will receive a 4.99 per cent increase in January 2027. It is the fourth and final increase agreed in the 2024 contract. Had the unions terminated the agreements, the increase would have been lost, and Efling members would have faced a difficult struggle to win it back, Jónsdóttir writes.

She also points to rising unemployment, particularly among migrant workers, saying there are now six applicants for each vacancy. Union leaders must face the economic realities affecting the people they represent, she argues, adding that competitiveness must be balanced with caution.

Jónsdóttir says government involvement in the deal is valuable. Among the measures, the government will fund municipal housing grants temporarily, enabling 400 homes for low-paid workers. Child benefits will increase, with their development secured so they no longer lose value from year to year. Monthly rent increases linked to the consumer price index will be banned, and at least 12 months must pass between rent increases.

The agreement also includes plans to introduce bills on penalties for breaches of minimum employment terms, an issue Efling has campaigned on since 2019, as well as bills on inaction and chain liability. A recent ASÍ report found that the average general wage claim was about ISK 845,000. More than half of the claims involved migrant workers, who make up one quarter of the workforce, Jónsdóttir writes.

She says unemployment, inflation and high interest rates weigh particularly heavily on workers who spend most of their income on rent and essentials. Stability is therefore in workers’ interests as well as employers’, she argues, adding that the agreement secured scheduled pay rises and reforms without putting members’ livelihoods at risk.