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Free movement of EEA workers to Iceland

6.4.2006

Social affairs minister’s bill concerning the free movement of EEA workers to Iceland approved by the Icelandic government on 4 April.

At its meeting on 4 April, the government approved a bill proposed by the Minister of Social Affairs on the access by nationals of Estonia, Latvia, Lithuania, Poland, Slovakia, Slovenia, the Czech Republic and Hungary to the Icelandic labour market as from 1 May 2006. In addition, the Minister of Social Affairs is to appoint a task committee including representatives of the government and the social partners to examine the position of foreign nationals on the Icelandic labour market. It is planned that the committee will submit its report and proposals to the minister by 1 November 2006.

Enlargement of the European Economic Area took effect on 1 May 2004, when a further ten states became parties to the EEA Agreement. However, the commencement of the rules of the agreement regarding the free movement of workers was postponed by two years in the case of nationals of Estonia, Latvia, Lithuania, Poland, Slovakia, Slovenia, the Czech Republic and Hungary; these rules therefore take effect as from 1 May this year. Older member states of the agreement, including Iceland, may, on the other hand, decide unilaterally to defer the commencement of these rules to as late as 2009.

The minister’s bill, which was approved by the government, proposes that nationals of the states listed above be permitted to enter Iceland to seek and accept employment in Iceland without special work permits. It appears that there is a certain mobility among nationals of these states. Therefore there is considered reason to have employers inform the Directorate of Labour when they engage nationals of these countries, stating the name, ID number and address of the employer and the foreign national’s name, ID number and address in Iceland. The employment contract, guaranteeing the foreign national wages and other terms of service in accordance with Icelandic law and collective agreements, is to accompany the notification. The notification is to be received by the directorate within ten working days of the engagement. The Directorate of Labour is required to maintain a register of foreign nationals from the states mentioned above who enter Iceland for employment purposes. Inclusion in the register does not release the foreign nationals concerned from the obligation to apply for EEA residence permits according to the Foreign Nationals Act.

The purpose of obliging the employer to report this information is to be able to observe subsequent developments so as to maintain an overview of persons entering the country; this is done partly to ensure that they enjoy the rights applying on the domestic labour market. It is also important to be able to assess the effects of the enlargement of the EEA and to ensure that it will be possible to respond in time to circumstances that could result in serious disruption on the domestic labour market. It is also envisaged that registration of the type provided for will enable the authorities to provide the foreign workers involved with the necessary information regarding the laws and regulations applying to employment on the domestic labour market.

It is also envisaged that the Directorate of Labour will be authorised to impose per diem fines on employers who neglect their obligation to register nationals from the aforementioned states who are in their employment. It is seen as important that the directorate should have such a remedy available so as to ensure compliance with the notification requirement.

Under the bill, the Directorate of Labour will send the trade union of the relevant occupation in the region where these foreign nationals are employed a copy of each foreign national’s employment contract if the trade union so requests, providing there is a suspicion of a violation of the current collective agreement. It is seen as important to maintain the tradition of having the social partners in Iceland monitor compliance with collective agreements; it was considered necessary to take these steps to promote compliance in this way, and the EEA Agreement allows for special measures during the transitional period. This also applies to the provision under which trade unions will be able to call for the employment contracts of unspecified foreign nationals who are working for specific employers. This is proposed to meet circumstances in which there are indications that the employers involved may be violating the provisions of collective agreements.

The Minister of Social Affairs consulted the Icelandic Confederation of Labour and the Confederation of Icelandic Employers when drawing up the bill. It was also agreed that the minister would entrust a task committee, to include representatives of the government and the organisations of the social partners, to examine the position of foreign nationals on the Icelandic labour market.

The aim of this examination is to assess the position of foreign nationals working in Iceland, including those working under the provisions of the EEA Agreement on the right to provide services; it is important that a growth in the number of foreign enterprises and workers should not disrupt the rules and practices that have been developed regarding industrial relations on the Icelandic labour market. One such consideration is that the prevailing form of engagement in Iceland should continue to be by direct employment contract between employer and employee. Amongst other things, attention will be given to the question of whether there is a need to strengthen the existing labour market structure so as to ensure that foreign workers will enjoy the rights and terms applying on the domestic labour market. The task committee will be expected to assess whether there is a need to set detailed rules on the notification obligations of service-providers who bring their workers to Iceland. It will also be expected to make proposals to the Minister of Social Affairs on how to improve procedure within the administrative system so as to ensure that foreign nationals will reside and work in Iceland in accordance with the law and that reliable data is available on foreign nationals working in the country. The committee will also investigate methods available to expand the flow of information and assistance available to foreign workers in Iceland. The task committee is to submit its report and proposals to the minister by 1 November 2006.