Virðing’s collective agreement with SVEIT violates the provisions of several laws. It does not satisfy other legal requirements, in addition to convincing arguments that it violates the principle of equality in the Constitution. Wage rates according to the collective agreement will be lower than those according to the agreement between Efling and SA, active from 1 February 2025. On top of that, changes to working hours and shift bonuses in the Virðing and SVEIT agreement generally lead to wage cuts, compared to the agreement between Efling and SA.
Efling has assessed the collective agreement between Virðing and SVEIT and compared it with the provisions of the agreement between Efling and SA from this spring. The conclusion is that the aforementioned collective agreement is incompatible with the Act on the Terms of Employment of Employees and Compulsory Pension Insurance, as well as the Act on Trade Unions and Labor Disputes.
There are also provisions in the agreement that may be contrary to or do not meet the requirements of various laws. These include the law on workers’ right to dismissal and wages due to illness and accident absence; the law on the 40-hour workweek; the law on vacation; the law on equal treatment in the labor market and the principle of equality in the constitution.
Efling’s wage rates are higher
SVEIT claimed in a press release yesterday, December 5, that the collective agreement between SVEIT and Virðing contains a higher basic wage rate than the Stability Agreement between Efling and SA from this spring. It is true that the wage rates according to the agreement between Virðing and SVEIT are now slightly higher. However, they will become lower when the contractual wage increase takes effect in February. According to the collective agreement between Efling and SA, wage increases take effect in February each year, while wage increases according to the collective agreement between Virðing and SVEIT take effect in November each year.
Therefore, the wage rates according to the agreement between Virðing and SVEIT will be lower than the wage rates of Efling and SA from 1 February to 1 November 2025, for nine months. The same applies to the year 2026, in February of that year the rates of Efling and SA will be higher again and will remain higher for the duration of the agreement.
Daytime work on Saturdays is a violation of the law
In the provisions of the collective agreement between Virðing and SVEIT on working hours, daytime work is defined from 08:00-20:00, three hours longer than in the collective agreement between Efling and SA, where the daytime working period ends at 17:00. It has also been added in the collective agreement between Virðing and SVEIT that working from 08:00-16:00 on Saturdays is considered daytime work. This is both inconsistent with the applicable minimum right and a violation of the 40-hour workweek law from 1971, which assumes that daytime working periods refer to weekdays.
Virðing’s shift bonus is much lower
As can be understood, there is a significant difference in wages for shift work when looking at the two agreements. The shift bonus according to the collective agreement between Virðing and SVEIT is thus zero during the period 17:00-20:00 on weekdays and zero during the day on Saturdays, while it is 33% during these hours according to the collective agreement between Efling and SA.
Furthermore, the shift bonus is lower in the agreement between Virðing and SVEIT than in Efling’s agreement in all cases, except regarding night work. Thus, the shift bonus on weekdays during the period 20:00-24:00 is 31% in the collective agreement between Virðing and SVEIT but is 33% in the collective agreement between Efling and SA. As mentioned above, no shift bonus is paid on Saturdays from 08:00-16:00 in the Virðing and SVEIT agreement, but it is 45% in the Efling and SA collective agreement. During the period 16:00-24:00 on Saturdays and 08:00-24:00 on Sundays, the shift bonus according to the Virðing agreement is 31% but is 45% according to the Efling agreement.
The Efling and SA agreement also provides for a 55% bonus for night work on weekends from 24:00-05:00, but the shift bonus for the same period is 45% according to the Virðing and SVEIT agreement.
Also, in the Virðing and SVEIT collective agreement, Maundy Thursday (Skírdagur) is not mentioned anywhere when referring to major holidays. That violates the law on the 40-hour workweek.
Weaker right to December bonus
The collective agreement between Efling and SA states that the December bonus is paid to those who have either been employed by the employer for 12 weeks in the last 12 months or are employed in the first week of December. This is narrowed down in the collective agreement between SVEIT and Virðing, where there is no reference to the latter case.
Likely a violation of the constitutional principle of equality
The definition of training time in the collective agreement between Virðing and SVEIT is expanded and in fact, reduced to simple age discrimination. The provision states that new employees aged 18-21 receive a payment equal to 95% of the total salary. Thus, a “training period” for a young employee can be up to three years. The collective agreement between Efling and SA, however, assumes that training time can be a maximum of 500 hours and a maximum of 300 hours with the same employer.
It is questionable whether this provision in the agreement between Virðing and SVEIT is compatible with the law on equal treatment in the labor market and the principle of equality in the constitution.
Worse provision regarding rest period’s
Where the rest period is named in the collective agreement between Virðing and SVEIT, there is no prohibition on organizing working hours in such a way that it exceeds 13 hours, unlike what is in the collective agreement between Efling and SA. There is also no provision that it is not permitted to reduce the 8-hour continuous rest period, nor that a work cycle may only be extended to 16 hours. It is also not stated that accumulated leave entitlement must be stated on a pay slip.
Efling’s holiday entitlement is much stronger
Where holiday is discussed in the collective agreement between Virðing and SVEIT, it does not stipulate that an employee earns holiday in excess of the statutory minimum, of 24 days per year. However, the collective agreement between Efling and SA has agreed on significantly better holiday entitlement than the statutory minimum, especially the number of holiday days. Thus, employees who have reached the age of 22 and have worked for half a year at the same company are entitled to 25 days of holiday the following year. An employee who has worked for five years at the same company is entitled to 26 days of holiday.
The right to vacation will increase again in 2026 in Efling’s collective agreement when an employee with five years of employment at the same company is entitled to 28 working days of vacation. The 30-day vacation right of those who have worked for 10 years has also been abolished in the Virðing agreement.
An employer can order an employee to take vacation according to the Virðing agreement
The Virðing and SVEIT agreement states that an employee is obliged to take a vacation if his superior so orders. It is questionable whether the provision goes against the provisions of the Act on Vacation, which stipulates that the employer decides in consultation with the employee when vacation should be granted.
Parents without rights for the first six months
In the provision on the illness of children in the Virðing and SVEIT agreement, parents are without right to care for their sick children for the first six months of employment with the same employer. After six months of employment, parents are allowed to spend 12 working days in each 12 months to care for their children under the age of 13.
In the collective agreement between Efling and SA, however, parents are guaranteed the right to spend two days for each month worked to care for their sick children, from the beginning of employment until six months of employment. After that, the right changes to 12 working days in each 12 months.
The Virðing agreement does not address the payment of medical expenses
The provision on medical and transportation costs in the Virðingar and SVEIT agreement only states that the employer pays for transportation to a hospital or health care center if necessary, if an employee has an accident at work. There is no clause for the payment of medical expenses, as is in the collective agreement between Efling and SA.
Reference to repealed laws on maternity leave
The provisions of the collective agreement between Virðing and SVEIT concerning maternity leave refer to the older laws on maternity and parental leave from 2000, which have been repealed. It does not provide for the right of employees to undergo a maternity check-up during working hours without deduction from fixed wages. This is provided for in the collective agreement between Efling and SA, as well as other collective agreements.
The collective agreement between Virðing and SVEIT also does not address the fact that after one year of employment with the same employer, statutory absences due to maternity leave are considered working time when calculating December and holiday bonuses, as is the case in the collective agreement between Efling and SA.
Violation of a European directive
The provisions on employment contracts in the collective agreement between Virðing and SVEIT are not in accordance with the provision of the European Union Directive on information on employment terms. That directive came into force in Iceland in 1997 and has been incorporated into the collective agreements of ASÍ member unions.
The collective agreement does not stipulate that changes to the terms of employment of employees must be confirmed in writing. Overall, the provisions of the collective agreement impose considerably fewer obligations on employers than those that apply in the collective agreement between Efling and SA.
Notice period reduced in the Virðing agreement
Likewise, the notice period is poorer in the collective agreement between Virðing and SVEIT than according to the collective agreement between Efling and SA. Thus, the collective agreement between Virðing and SVEIT does not stipulate that the notice period takes effect from the first day of the next month, unlike the collective agreement between Efling and SA.
The notice period after three months of employment is 12 calendar days according to the collective agreement between Virðing and SVEIT but is 1 month in the collective agreement between Efling and SA. After two years of employment, the notice period according to the collective agreement between Virðing and SVEIT is 1 month, while in the agreement between Efling and SA, it is 2 months. After ten years of employment, the notice period according to the collective agreement between Virðing and SVEIT is 3 months, while in the collective agreement between Efling and SA, it is stipulated that it is 4 months if the employee has reached the age of 55, 5 months if he has reached the age of 60 and 6 months if he has reached the age of 63.
The collective agreement between Virðing and SVEIT does not stipulate that if an employee is transferred from a job for which he has been hired to another job with a new wage rate, he shall retain the previous wage rate until the notice period.
Rights of union representatives reduced
The provision in the collective agreement between Virðing and SVEIT on union reps refers to the provisions of the Act on Trade Unions and Industrial Disputes. The collective agreement between Efling and SA since last spring, however, has much broader rights for union reps, for example, that they are allowed to spend time on representative’s work, that they should be provided with facilities, that they have access to data and that they are authorized to attend union representatives courses during working hours.
It cannot be seen from the statutes of Virðing that a sickness benefits fund or a vocational training fund should be operated, as unions do, only a vacation fund.
If an employer has had or attempted to have, an Efling member sign an employment contract that refers to the fraudulent agreement between Virðing and SVEIT, or if Efling members believe that they are being paid under the fraudulent agreement, they should contact Efling immediately. This can be done on the reporting page, here.