Trade Unions (Stéttarfélag) in Iceland (2026 Legal Guide) — Rules & Requirements
About this article
Sourced from Icelandic Acts of the Althingi, statutory instruments, and official guidance. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
In Iceland, trade unions play a key role in labour law. Trade-union membership covers about 90% of employees — the highest rate in the West — and almost every employee is protected by a collective agreement (CA) between the relevant trade union and the employers' association.
Lög nr. 80/1938 on trade unions and labour disputes guarantee the right of workers to take part in a trade union, to make collective agreements and to take part in a strike. Collective agreements set out minimum terms in areas such as wages, working hours, leave, sick-pay rights and pensions — usually above the statutory minimum set out in the Annual Leave Act (Orlofslög nr. 30/1987) and other sector-specific laws.
When does it apply?
- You work in Iceland as an employee — full-time, part-time, temporary.
- You are a member of a trade union (or are covered by a collective agreement despite not being a member, because collective agreements apply widely across trades).
- You have a dispute with your employer about wages, working hours, dismissal, harassment or other labour-law matters.
What should you do?
- Identify your trade union. Common unions: Efling (service sectors), VR (commercial and office workers), Iðja (industrial workers), the Federation of Electrical Trades (Rafiðnaðarsambandið) (electrical trades), BSRB (public employees). Your employer should tell you which trade union applies.
- Contact your shop steward (the workplace representative) or the trade union directly. Most trade unions offer free legal advice to members.
- Document the facts: the employment contract, payslips, communications with the employer, colleagues' testimony.
- Internal resolution through the trade union. The union will usually contact the employer and demand a resolution. Most matters are resolved here.
- If internal resolution achieves nothing: the trade union can bring a case before the District Court or request the mediation of the State Mediator.
- The Directorate of Labour (vinnumalastofnun.is) handles certain officially registered labour-law matters — e.g. unemployment benefits and work permits for foreign nationals.
What should you NOT do?
- Don't settle for taking the matter up with the employer alone. The trade union is the stronger bargaining party.
- Don't wait too long. A wage claim is time-barred after 4 years; a claim for damages for unlawful dismissal after 6 months.
- Don't cancel your trade-union membership to save the dues — you lose access to legal advice, the vacation fund, the sickness fund and other membership benefits.
About Workers' Rights in Iceland
Work in Iceland is built on collective agreements — there is no statutory minimum wage. The Trade Unions and Labour Disputes Act (Lög nr. 80/1938) and the Act on Workers' Terms of Employment (Lög nr. 55/1980) make agreed pay scales binding on every employee and employer covered by the agreement. Workplace safety falls under Lög nr. 46/1980; parental leave under Lög nr. 95/2000 provides 12 months in total, of which 6 are reserved for each parent. Equal-pay certification is mandatory for companies with 25+ employees under Lög nr. 150/2020. Collective disputes go before the Labour Court (Félagsdómur); individual disputes before the district courts.
Common Questions
What is the trade unions — the role of labour unions (iceland) right in Iceland?
In Iceland, trade unions play a key role in labour law. Trade-union membership covers about 90% of employees — the highest rate in the West — and almost every employee is protected by a collective agreement (CA) between the relevant trade union and the employers' association.Lög nr. 80/1938 on trade unions and labour disputes guarantee the right of workers to take part in a trade union, to make collective agreements and to take part in a strike. Collective agreements set out minimum terms in areas such as wages, working hours, leave, sick-pay rights and pensions — usually above the statutory...
When does it apply — trade unions — the role of labour unions (iceland)?
You work in Iceland as an employee — full-time, part-time, temporary.You are a member of a trade union (or are covered by a collective agreement despite not being a member, because collective agreements apply widely across trades).You have a dispute with your employer about wages, working hours, dismissal, harassment or other labour-law matters.
What should you do — trade unions — the role of labour unions (iceland)?
Identify your trade union. Common unions: Efling (service sectors), VR (commercial and office workers), Iðja (industrial workers), the Federation of Electrical Trades (Rafiðnaðarsambandið) (electrical trades), BSRB (public employees). Your employer should tell you which trade union applies.Contact your shop steward (the workplace representative) or the trade union directly. Most trade unions offer free legal advice to members.Document the facts: the employment contract, payslips, communications with the employer, colleagues' testimony.Internal resolution through the trade union. The union...
What should you NOT do — trade unions — the role of labour unions (iceland)?
Don't settle for taking the matter up with the employer alone. The trade union is the stronger bargaining party.Don't wait too long. A wage claim is time-barred after 4 years; a claim for damages for unlawful dismissal after 6 months.Don't cancel your trade-union membership to save the dues — you lose access to legal advice, the vacation fund, the sickness fund and other membership benefits.