Employees in the public sector

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.

Public sector employees

  • State employees

    The Government employees act No, 70/1996 applies to anyone who is appointed or hired into the service of government for a period exceeding one month where this employment is considered their main occupation. There are special rules that apply to civil servants as can be read here.

    The act addresses in detail the rights and duties of employees and has clauses on changes in job areas, written reprimands and retirement. Additionally, there are certain rights included in the collective agreement on rights and regulations. In the collective wage agreements there are clauses on salaries, paid annual leave and more that embodies greater rights for governmental employees.

  • Local government employees

    The same rules and regulations apply for local employees in some extent. The difference is that the rules and regulations are bound into collective wage agreements instead of being legaly mandated. In the wage agreements there are similar rules on terms of employment like changes in jobs, written reprimands, ending the employment as well as wages, holiday payments and other important and relevant issues.

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