News and articles
VR and SA reach agreement on future of agreements
VR and Samtök atvinnulífsins have reached an agreement on how to respond to the failure of the assumptions underlying the collective agreements. The agreement, which was finalised shortly before 16:00 today, includes a new review provision allowing the term of the collective agreements to be shortened if inflation exceeds certain thresholds.
VR Board Approves Termination of Collective Agreements
At its meeting on the evening of 7 October, the VR Board approved the termination of the union’s collective agreement with Samtök atvinnulífsins due to a failure to meet the agreement’s underlying assumptions. Under the assumptions clause of VR’s collective agreements, notice of termination must be given before 4:00 p.m. today, 8 October 2026.
76% only received collectively agreed increases
Three out of four people in the labour market have not received a pay rise beyond the wage increases provided for in collective agreements over the past two years, according to a Gallup survey conducted for VR, LÍV and Fagfélögin in September.
September without a resolution
By early March, it had become clear that the assumptions underlying the collective agreements were less likely to hold than had generally been expected. Inflation was rising. Public-sector fees had increased, price rises by companies had become an almost daily occurrence, and there was still no sign of the long-awaited action on housing, which is the largest driver of inflation.
Minister of Finance Against the People - Resolution from VR, LÍV and Fagfélögin
VR, LÍV and Fagfélögin strongly object to the arguments put forward by Minister of Finance Daði Már Kristófersson in an interview with Vísir. There, the Minister describes criticism of the Government’s tax and fee increases as a demand for “short-term gains” at the expense of society’s long-term interests.
What are you going to do?
When the collective agreements were signed, workers took a significant risk by accepting modest wage increases during a period of inflation. In return, companies were expected to exercise restraint in raising prices to help bring down inflation and interest rates. However, prices have continued to rise, and interest rates remain extremely high. The assumptions underlying the collective agreements have therefore failed, and the agreements could be terminated on 8 October.
The Government Balances the Budget at the Expense of Workers
The VR Board expresses serious concern over the Government’s budget bill, which, if left unchanged, reduces the likelihood that the collective agreements in the private sector can remain in force. The Board demands that the Government and Parliament reconsider the bill with the interests of workers as their guiding principle, reduce the planned additional burdens on households, freeze public-sector fees and charges, and put forward genuine measures to bring down inflation and interest rates.
The Governor of the Central Bank and the Hatchet
When the Central Bank’s Monetary Policy Committee announced its decision on the third interest rate hike this year, it cited two main reasons for the increase in inflation. The statement reads: “The rise in measured inflation has primarily been shaped by increases in public-sector fees and the effects of the conflict in the Middle East.” That was all it had to say.