Collective wage agreements

Collective wage agreements are agreements between unions and employers and/or their associations dealing with the wages and wage terms of wage earners.

Collective wage agreements

  • Collective wage agreements are established within the legal framework applicable to the labour market, and provide in more detail for the employment terms of wage earners than the legislation does.
  • Wage earners work in accordance with the collective wage agreements that unions and employers have established for the business activity in question.
  • Employers and employees may not negotiate for lower wages or worse employment terms than those provided for in the collective wage agreements. Such negotiated agreements are invalid.
  • Employees may negotiate for better employment terms than the minimum terms provided for in collective wage agreements.
  • Unions represent wage earners in collective wage agreement negotiations and protect their interests as regards employers and the authorities.
  • The Confederation of Icelandic Employers negotiates on behalf of employers in collective wage agreements in the general labour market.
  • The State Negotiating Committee negotiates with state employees on behalf of the Minister of Finance and Economic Affairs, while the Municipal Wage Committee negotiates with unions representing its employees.
  • If the unions and the parties with which they negotiate do not reach an agreement in collective wage agreement negotiations, the dispute may be referred to the State Mediator, whose role is to mediate in labour disputes.

Links of interest 

Laws and regulations