Equality in the labour market

In The Icelandic Constitution, article 65,  it is stated that: “Everyone shall be equal before the law and enjoy human rights irrespective of sex, religion, opinion, national origin, race, colour, property, birth or other status.“  It further states that men and women shall enjoy equal rights in all aspects.

This principle of equality is further implemented by law that will be outlined in this chapter. Iceland is also a member of various international agreements about equality, for example the European Convention for the Protection of Human Rights and Fundamental Freedoms and International Labour Organization’s (ILO’S) conventions.

Equality in the labour market

  • The law on equality

    Act No.10/2008, on Equal Statues and Equal Rights of Women and Men, usually called the law on equality, addresses in detail equality based on gender. The act doesn't only handle equality in the labour market, but aims to establish and maintain equal status and equal opportunities for women and men in general and thus promote gender equality in all aspects of the society.

    The act states that the administration shall be handled by The Directorate of Equality and the Equality Complaints Committee. It also lists the obligations that are mainly directed towards employers, but also trade unions and others.

    Employers and trade unions shall systematically work towards equalising the position of the genders in the labour market. Employers shall specifically work towards equalising the position of the genders within their companies or institutions and promote a classification of jobs that does not designate them as specifically women’s or men’s jobs. Special emphasis shall be placed on equalising the positions of the genders as regards managerial and influential positions.

    Equality plans

    All companies and institutions that have 25 or more employees must make an equality plan or integrate equality matters into their personnel policies. It shall have an implementation  plan on how to ensure equality within the company or instituion. The issues that are covered are equal pay, vacancies, job training, continuous education and vocational education, coordination of family and work-life and how employers and managers should prevent gender-based violence, gender-based harassment and sexual harassment at the workplace. The Centre for Gender Equality enforces this act.

    Balancing family and working life

    According to the law on equality employers shall take all necessary actions to enable their employees to balance their professional obligations and family responsibilities. One way to achieve this could be to increase the flexibility in the organization and concerning working hours. Also, a special emphasis should be placed on facilitating the employees'  return to work following maternity/paternity or parental leave and to be flexible regarding leave from work due to pressing and unavoidable family matters.

  • Act on Equal Treatment on the Labour Market

    Act on Equal Treatment on the Labour Market No, 86/2018 took effect on 1st September 2018, except for the provision on discrimination on ground of age that came into effect on 1st July 2019. The act applies to equal treatment of individuals in the labour market, irrespective of race, ethnic origin, religion, life stance, disability, reduced working capacity, age, sexual orientation, gender identity, sexual characteristics, or gender expression.

    The act is built in similar ways as the previous act on equality no 10/2008.

    The act bans discrimination based on the factors mentioned above and imposes the obligation on employers to take special measures towards equal treatment of all.

    The act is still so new that the implementation has not been tried on in practice except one ruling by the Complaints Committee concerning a demand of knowledge in Icelandic for employment, case no 4/2019. The act is based on an EU directive and precedents can be found in the Court of Justice of the European Union.

    There are some new innovations in the act. For example the way it prohibits age discrimination. This is new in Icelandic law, where this variable has not been used before on discrimination. Due to this change the leave provision in the collective agreements of state and municipal employees was changed, in the agreements signed in the spring of 2020 as before the leave rights were connected to age which was not in accordance with this act. The Court of Justice of the European Union has ruled it should not be considered a discrimination to force an employee to retire and become a pensioner at a certain age.

    There is also some breakthrough regarding disability and reduced working capacity. The act puts obligations on employer to take appropriate measures, if they are needed, to enable an individual with disabilities or an individual with reduced working capacity to have access to, and to participate in, a job, to benefit from promotion at work or to receive training, providing that such measures are not excessively encumbering for the employer.

  • Equal pay

    The gender wage gap has been a problem in the labour market from the beginning. The first act on equal pay for the genders came into effect in the year 1961. At that time, members of parliament thought that it would take some years to close the gap. That was far from correct, and the gender wage gap can still be measured in Iceland, just like in most other countries.

    The principle can be found in the 19th article of the act on equality. It states that women and men working for the same employer shall be paid equal wages and enjoy equal terms of employment for the same jobs or jobs of equal value. The concept wages refer to ordinary remuneration for work and further payments of all types, direct and indirect, whether they take the form of perquisites or other forms, paid by the employer to the employee for his or her work. With the concept term, wages together with pension rights, holiday rights and entitlement to wages in the event of illness and all other terms of employment or entitlements that can be evaluated in monetary terms. The term equal wages means that wages shall be determined in the same way for women and men and not involve gender discrimination.

    A considerable number of judgements has been handed down on the act of equality. The supreme court of Iceland has affirmed that wage differences cannot be justified by different collective wage agreements. This means that employees doing the same job at the same workplace that are members of different unions and get paid according to different collective agreements, have to be treated the same way (judgement sci 1997, page 1008).

    Equality plan

    With act No.56/2017, changes were made on the Act on equality and employers with 25 or more employees were obliged to implement equal pay standard and go through evaluations and be granted equal pay certification.

    The Equal Pay Standard ÍST85 was formed in collaboration of the labour market and the government. At first the standard was optional for companies and institutions but it was made obligatory with the changes of the law in 2017. The standard is a tool to enable companies and institutions to categorise and evaluated all jobs within their line and by doing so, different jobs but equally value are compared. The act was implemented in steps and by the end of 2019 all public offices should have obtained the Equal Pay Certification. The companies and institutions can choose key sectors that create the value of jobs, for example responsibility, competence, and stress. When they have implemented the standard an accredited certification authority will evaluate if all the conditions of the standard are upheld. If they are they will grant the company or institution an Equal Pay Certification. The Directorate of Equality supervises this work. Workplaces that fail to comply may be fined.

    Wage secrecy

    The equality act also has a provision allowing employees to divulge their pay if they choose to do so. Wage secrecy is therefore forbidden according to Icelandic legislation.

  • Discrimination prohibited

    The act on equality no 10/2008 and the act on equal treatment on the labour market no 86/2018 prohibit any kind of discrimination based on all the factors named in the acts. Those are race, ethnic origin, religion, life stance, disability, reduced working capacity, age, sexual orientation, gender identity, sexual characteristics, or gender expression. The acts permit temporary measures meant to improve equality for specific groups . It is not considered discrimination to give women that are pregnant or have newly given birth special regard.

    Direct discrimination is prohibited. This is when an individual receives treatment less favourable than another individual receives, has received, or would receive in comparable situations based on race or another factor mentioned above. An example of that would be the leave provision in the collective agreements of state and municipal employees which were connected to age. This has been changed.

    Indirect discrimination is also prohibited and this provision in the act is often broken. Indirect discrimination is when an apparently neutral provision, criterion or practice would put some individuals at a disadvantage on grounds of their race or other factor mentioned above, compared with others,. This applies unless the difference can be objectively justified by a legitimate aim, and the means of achieving that aim are appropriate and necessary. To put this in context, this might be part time workers that don’t enjoy entirely the same rights as full time workers, and most part time workers are women. Then the discrimination would be based on sex, even though the condition job percentage seems to be neutral.

    Both those acts prohibit discrimination against applicants for job promotions, changes in positions, retraining, continuous education, vocational training, study leave, notice of termination, working conditions and other terms of service for workers and other issues regarding the labour market.

  • Protection against unjust treatment at work

    In both the act on equality and the act on equal treatment there are provisions that protect employees from being dismissed because they have complained about, or brought a charge against, discrimination or gender and sexual harassment.

    If an employee is dismissed or handled with injustice the employer shall proof that the treatment is not because the complaint, charge, or demand for corrective action and this is valid for one year after the complaint.

  • Reverse burden of proof

    In cases that fall under this law the burden of proof is reversed. This means that it is enough for an employee to make a charge of discrimination for the employer who is alleged to have practised discrimination to demonstrate that the reasons on which the treatment was based on was not connected with any of the factors mentioned in the acts. This can be seen in many judgements regarding dismissals and wage inequality and is an important section in legal protection of the law.

  • Gender- and sexual based harassment

    In the act on equality there are provisions on gender based and sexually based harassment. They are unanimous with the provisions in the regulation 1009/2015.

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