Sólveig Anna Jónsdóttir, chairman of Efling  and Ingólfur B. Jónsson, assistant head of rights and employment terms department of Efling wrote an article in Morgunblaðið where they go over how extensive violations to wage agreements undermine trust in the labor market and wage theft in Icelandic labor market should be addressed. It is disappointing to see the managing director for the Confederation of Icelandic Employers underestimate these facts and call them „unreasonable“ and „unrealistic“ on the pages of Morgunblaðið.

Respect the Agreements

Today Efling Trade Union operates a 10 person departement, The Wage Agreement Department, that assists members seeking redress due to rights violations they experience in the labor market. During the last quarter (July, August and September 2020), Efling‘s Wage Agreement Departments recieved over 3,500 phone calls, 1,300 emails and nearly 700 visits at the company headquarters from Efling members.

The Wage Agreement Department also handles education, workplace inspection and anong other tasks, however its main focus is assisting members with wage claims. A wage claim is made when wages have not been paid or other contractual obligations have not been respected. Common violations include: shift differentials paid in lieu of overtime differential, earned vacation leave not paid out upon conclusion of the employee‘s contract, the December bonus not paid and so forth.

In the last quarter, the Wage Agreement Department registered over 260 new cases representing violations of worker‘s rights. Of these new cases, 87 were wage claims that totaled just over 65 million ISK. Some of the employers involved in these claims have more than ten open wage claims. The names of these companies and the total amount of these claims can be found on Efling‘s website in the Wage Agreement Division‘s new quarterly report.

These claims represent intentional violations of Efling member‘s rights, not merely mistakes in payroll or accounting that most employers correct without intervention from a labor union. Efling will not send out a wage claim on behalf of its members unless such claims are supported but documents including  employment contracts, pay slips, time sheet and payment reciepts for wages. It is rare for wage claims made by Efling to be overturned and they are normally paid in full, often with the assistance of Efling‘s lawyers.

The problem is that the procedure to complete a wage claim can take considerable time. Sometimes these wage claims need to be handled by the courts, through bankruptcy estates in the case of bankrupt companies or via this Wage Insurance Fund. The employer receives no fines and the employee will recieve no compensation, even if the employer is convicted in court. While this is happening, the employee must bear all of the costs for their stolen salary. They can not request any sort of relief from rent or bill payment because their wages were stolen.

Unethical employers know about this system. They are increasingly taking advantage of this financial incentive for wage theft created by the lack of liability. Efling‘s wage claims have increased by 40% per year for the past five years. Wage theft in the Icelandic labor market is growing exponentially. These claims now amount to around a million kronur per day. It is important to note that these claims represent only the violations which are reported and there are strong indicators that many victims are reluctant to seek restitution for fear of termination.

It is disappointing to see the managing director for the Confederation of Icelandic Employers underestimate these facts and call them „unreasonable“ and „unrealistic“ on the pages of Morgunblaðið. Wage theft is not only a painful humiliation but a major economic loss suffered by the lowest paid workers. The average amount of a wage claim recieved by Efling in 2019 was over half a million ISK. It should go without saying what such an amount of money meand for a low wage earner.

Proposals put forward by Efling and ASÍ to address this problem are modeled on the current wage afreement between the Confederation of Icelandic Employers (SA) and Sjómannasamband Íslands and Danish labor market legislation. It is incomprehensible what the managing director of SA finds „unrealistic“ with these solutions.

There is little point in making wage agreements if they will not be respected. Efling is not claiming that wage theft on the part of individual employers is organized by SA, but these extensive violations to wage agreements undermine trust in the labor market. This is a problem that employers‘ associations should be concerned about. A negotiator with any self respect must ensure that violations of an agreement they have entered into must be taken seriously.

Sólveig Anna Jónsdóttir, chairman of Efling
Ingólfur B. Jónsson, assistant head of rights and employment terms department of Efling

Published in Morgunblaðið 16.10.2020.

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