Agreement on foreign workers

On March 7th 2004, the Icelandic Confederation of Labour (ASI) and the Confederation of Icelandic Employers (SA) agreed on a procedure in matters of disagreement concerning foreign workers. 

The organisations agreed that Iceland’s obligations according to the EEA Agreement on the free movement of goods, capital, services, and workers across national boundaries have a positive effect on the interests of individuals and companies in this country, simultaneous with an increased supply of goods and services, the dissemination of knowledge between countries, increased competition between companies, upward trends in various sectors of society, and the increase in the number of jobs. Furthermore they agreed that it is the joint task of the parties to see to those companies using foreign workers in their production or services pay wages and terms of employment that are in accordance with the collective agreements and the laws of Iceland. The agreement states that if collective agreements are not honoured, this undermines the operations of other companies and compromises the premises of normal competition, and diminishes the benefits of the entire society from a stable and healthy labour market.

Under the agreement, union representatives safeguard that the collective agreements are enforced. If there is a well-founded suspicion of a violation of the relevant collective agreement or the law regarding foreign workers’ terms of employment, the union representative has the right to study information on the wages and other terms of employment for the foreign workers as appropriate, information about the occupational qualifications of those in jobs where such qualifications are needed. If there is no union representative at the workplace, a representative of the labour union in question shall have the same power as the union representative to study such information, and he shall have the same responsibilities.

If the employer does not agree to the union representatives request for access to information about the wages and other terms of employment relating to the foreign worker and/or there is a disagreement over whether the provisions of collective agreements or law have been met and if the disagreement has not been settled within the company, the disagreement may be sent to the special Consultation Committee of ASI and SA. 

The Consultation Committee shall look for ways to cast a light on matters that are sent to the committee in accordance with the agreed rules and to settle the matter of disagreement with discussions between the parties. When studying the matter under discussion, the Committee may demand necessary information from the employer about wages and other terms of employment for the foreign workers involved and, if appropriate, about the occupational qualifications of those carrying out work that requires such qualifications. This power applies to the foreign workers who are covered by the collective agreements of the ASI member organisations. The parties to the disagreement shall be told about the Committee’s ruling. It is permissible to bring a matter to court despite the Committee’s ruling. 


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