Labour Market and Employment
The Labour Code is under the auspices of the Ministry of Welfare, which is ultimately responsible for this function of government. Legislation on labour and employment lays down the basic principles concerning the rights and obligations of workers and employers. It provides in general for minimum rights on the labour market. In addition, Act on Working Terms and Pension Rights Insurance, No 55/1980, provides for the general validity of collective bargaining agreements, based on the established practice that the social partners negotiate workers' wages and terms of employment through collective bargaining. Employment contracts may not specify poorer terms than are provided for by law or in collective bargaining agreements; such contracts are considered invalid. Detailed information on the Acts, rules and collective agreements which apply to the Icelandic labour market is available at posting.is/en.
The State Conciliation and Mediation Officer operates under the Ministry of Welfare to mediate in wage disputes, monitor the situation and outlook in industry and in the labour market and keep a register of collective bargaining agreements in force.
The Directorate of Labour operates pursuant to Act on Labour Market Measures, No. 55/2006. The Directorate's principal role is to assist persons seeking employment as well as organising positive labour market actions. The agency also administers the Unemployment Insurance Fund, the Maternity/Paternity Leave Fund and the Wage Guarantee Fund, as well as performing a good number of other tasks. These include issuing work permits to foreign nationals and supervising seconded workers and the activities of temporary work agencies, with the aim of preventing social dumping on the labour market. This supervision is carried out in close collaboration with the social partners and other public authorities.
Persons with reduced work capacity following illness or accident are entitled to vocational rehabilitation under the Act on Vocational Rehabilitation and Activities of Rehabilitation Funds, No. 60/2012. The objective is to enable as many people as possible to participate actively in the labour market through a comprehensive rehabilitation system, provided through collaboration of rehabilitation funds with state and municipal institutions.
The Administration of Occupational Safety and Health operates under Act on the Working Environment, Health and Safety in Workplaces, No. 46/1980. The Administration of Occupational Safety and Health is the centre of occupational safety efforts in Iceland, and is responsible for supervision, education and research in this area. Workplaces are urged to carry out risk assessment and prepare an occupational safety and health programme, emphasising the importance of preventive measures in workplaces.
Iceland participates in international labour collaboration through the forum of the International Labour Organisation (ILO) and in connection with its membership of the European Economic Area, as EU labour regulations are part of the EEA Agreement. Icelandic authorities also participate in Nordic co-operation in this field.
Iceland is a signatory of the European Social Charter, which was ratified in Iceland in 1976. The Charter provides for workers' rights, the protection of social rights and special rights which are not part of the working environment. This international collaboration in labour affairs is under the auspices of the Ministry of Welfare.