As stated above, there are different rules and regulations for government employees and employees in the private sector. In the public sector are businesses and institutions that are owned by the state and municipals, and in addition there are unions and institutions that provide public services. As a rule, the matter of the state falls under the Ministry of Finance and Economic Affairs and within the ministry there is the Personnel policy department.
The Local authorities are independent according to the Local Government Act No. 138/2011 and the Iceland Association of Local Authorities safeguards their interests and negotiates in the collective wage agreements.
To simplify the matter, one could say that the public labour market has governmental and municipal employees and employees of non-profit institutions that are mostly financed by the taxpayers. Others work for private companies, therefore belong to the private market. But it not that simple, the privatisation of state companies made some governmental employees a part of the private market workforce. The Icelandic National Broadcasting Service (RÚV) and Isavia (the national airport and air navigation service provider) are examples of state-owned companies that are now run as government enterprises while being publicly owned. The rule of thumb is that those employees that were working at those institutions before the privatisation keep their rights as governmental employees and those that started after the privatisation have other rights.