Contract of employment

Article 42 of the act on Government elmployees stipulates that a written employment contract shall be concluded between the director of an agency and an employee which, for instance, states the terms of employment. The employee shall be informed about his term of employment when hired. In regulation 351/1996 it is further explained how this is implemented. This regulation does not apply for civil servants.

In the 2^nd article of the regulation a provision states the minimum terms of hiring. It states that a written employment contract shall be made at the start of employment with the following information:

1. Identity of employer and employee.
   a) Name, address and social security number of the institution.
   b) Name, address and social security number of the employee.
2. Place of work. If it is not a permanent workplace that must be stated in the agreement.
3. Function of the work: Title according to the collective agreement and nature of the work or a short job description.
4. Type of work hours, that is day work, shift work or other. Employment ratio and daily and/or monthly work quota.
5. Engagement/Employment, that is whether it is indefinite or temporary.
6. First day of employment.
7. Termination of contract when the employment is temporary.
8. Pension fund affiliation.
9. Relevant Trade Union.
10. Monthly wages, that is saleries and other payments.
11. Settlement period of pay.
12. Holiday entitlement.
13. Term of notice for employer and employee.
14. Rights to parental leave.
15. Right to sick leave.

According to the 2^nd article in regulation351/1996 the following items shall be written in terms of appointment with a supplement the following:

1. Identity of employer and employee.
2. Place of work. Where there is no fixed or main place of work but various it must be stated that the civil servant is appointed in miscellaneous places.
3. Title, position, nature and type of post appointed to or a short job description.
4. First day of appointment.
5. Length of appointment.
6. Pension rights.
7. Time of notice.
8. Monthly salary with reference to the State Salaries Arbitration Court and the State Salaries Commission and other emoluments as well as the settlement period.
9. Length of a normal workday or week.
10. Pension rights.
11. When appropriate referred to the State Salaries Arbitration Court and the State Salaries Commission or valid collective wage agreement.

In the collective agreements of the unions affiliated to BSRB negotiating with the Icelandic Association of Local Authorities there is a clause stating that the employer shall make a written employment contract with its employees. In most of the collective agreements it is referred to article 11.1.3.1. In the provision it is also referred to EU Directive COUNCIL DIRECTIVE of 14 October 1991 on an employer's obligation to inform employees of the conditions applicable to the contract or employment relationship (91/533/EEC).

The directive applies to all employees having a contract or a employment relationship. The directive does not apply to employees that are hired for a shorter time than a month or a working week not exceeding eight hours or of a casual and/or specific nature provided, in these cases, that its non-application is justified by objective considerations.

The employer has the obligation to inform the employee of the essential aspects of the contract or employment relationship. The information shall cover at least the following information:

1. Identity of employer and employee.
2. The place of work. Where there is no fixed or main place of work the principle that the employee is employed at various places and the registered place of business or, where appropriate, the domicile of the employer.
3. The title, grade, nature or category of the work for which the employee is employed or a brief specification or description of the work. The date of commencement of the contract or employment relationship.
4. The title, grade, nature or category of the work for which the employee is employed or a brief specification or description of the work.
5. The date of commencement of the contract or employment relationship.
6. The expected duration of employment in the case of a temporary contract or employment relationship.
7. The amount of paid leave to which the employee is entitled or, where this cannot be indicated when the information is given, the procedures for allocating and determining such leave.
8. The length of the periods of notice to be observed by the employer and the employee should their contract or employment relationship be terminated or, where this cannot be indicated when the information is given, the method for determining such periods of notice.
9. The initial basic amount, the other component elements and the frequency of payment of the remuneration to which the employee is entitled, the length of the employee's normal working day or week.
10. Where appropriate:
    a) The collective agreements governing the employee's conditions of work.
    b) In the case of collective agreements concluded outside the business by special joint bodies or institutions, the name of the competent body or joint institution within which the agreements were concluded.

The employer shall inform the employee about these terms no later than two months after the appionment in the form of a written contract of employment or a letter of engagement or with other written documents.

Where the contract or employment relationship comes to an end before expiry of a period of two months as from the date of the start of work, the information must be made available to the employee by the end of this period at the latest.

Where an employee is required to work in a country or countries other than within the EEA agreement this information must be in the employee’s possession before his departure and must include at least the following additional information:

1. The duration of the employment abroad.
2. The currency to be used for the payment of remuneration.
3. Where appropriate, the benefits in cash or other perks.
4. Where appropriate, the conditions governing the employee's repatriation.

Any change in the details referred to must be the subject of a written document to be given by the employer to the employee at the earliest opportunity and not later than one month after the date of entry into effect of the change in question.

Employers in the private sector are obliged to follow the EU directorate 1991 on an employer's obligation to inform employees of the conditions applicable to the contract or employment relationship (91/533/EEC).