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Employee Rights and Protections

Explore workers' rights and legal protections in Iceland


Icelandic employment law offers significant protections to employees. While employers generally have the right to terminate employment, they must comply with specific regulations regarding the termination process, the reasons for termination, and any financial obligations.

Lawful Grounds for Dismissal

Employers can terminate employment for several reasons:

  • Objective Reasons: These include operational changes such as restructuring, downsizing, or changing business focus, and the employee's conduct, such as poor performance, misconduct, frequent absences, or violating workplace policies.
  • Subjective Reasons: These occur when an employee is not at fault but the employment relationship is no longer viable. This could include loss of trust or incompatibility with the workplace.
  • Redundancies: Termination due to economic reasons or the elimination of a position.

It's important to note that employers must provide written justification for the termination, demonstrating the reasons fall within the lawful grounds, and have supporting documentation.

Notice Requirements

The required notice period in Iceland depends on factors such as the employee's length of service and age. The general guidelines are:

  • One to three months' notice, depending on the criteria outlined above.
  • Longer or shorter notice periods may be specified in collective wage agreements.

Severance Pay

In terms of severance pay:

  • No Universal Entitlement: There is no legal right to severance pay in Iceland.
  • Potential for Payment: Collective wage agreements may include provisions for severance pay.

Collective Redundancies

In the case of large-scale layoffs, employers must engage in consultations with employee representatives and notification must be provided to the regional employment office of the Directorate of Labour.


Iceland is known for its robust anti-discrimination legislation, which is deeply rooted in its Constitution and a commitment to upholding fundamental human rights.

Key Legislation

Art. 65 of the Icelandic Constitution states that "Everyone shall be equal before the law and enjoy basic human rights irrespective of gender, religion, opinions, national origin, race, colour, property, birth or other status."

Additionally, the Act on Equal Status and Equal Rights Irrespective of Gender, No. 150/2020, promotes gender equality and prevents discrimination based on gender.

Protected Characteristics

Icelandic law prohibits discrimination on the grounds of:

  • Gender
  • Sexual orientation
  • Gender identity and gender expression
  • Race
  • Color
  • Ethnicity
  • Nationality
  • Religion or belief
  • Disability
  • Age

Redress Mechanisms

Victims of discrimination in Iceland have several avenues for seeking redress:

  • Internal Reporting: Many organizations have internal complaint mechanisms. Employees are often encouraged to first report discrimination to their employer.
  • The Directorate of Equality: A government agency that investigates discrimination complaints and provides information and advice on discrimination matters.
  • Labor Unions: Unions often assist members with discrimination complaints and negotiations.
  • The Courts: Individuals can bring civil lawsuits for discrimination and may be entitled to compensation and other remedies.

Employer Responsibilities

Employers in Iceland have proactive responsibilities in preventing discrimination and creating inclusive workplaces:

  • Developing and Enforcing Anti-Discrimination Policies: Clear policies that outline prohibited conduct and complaint procedures are essential.
  • Employee Training: Regular training programs on discrimination, harassment, diversity, and inclusion promote awareness and a culture of respect.
  • Investigating Complaints: Employers must take all complaints seriously, investigate promptly, and take appropriate corrective action.
  • Reasonable Accommodation: Employers should provide reasonable accommodations for employees with disabilities or religious requirements.
  • Positive Actions: Employers are encouraged to go beyond basic legal requirements and create positive measures to promote equality and diversity within their workforce.

Working conditions

Iceland is known for its strong worker rights movement and well-established standards for working conditions. These standards cover aspects such as work hours, rest periods, and ergonomic requirements.

Work Hours

In Iceland, a full-time job is defined by law as a maximum of 40 hours per week, typically spread across five eight-hour days. It's not uncommon for workers to exceed 40 hours, but Icelandic law mandates overtime pay for these extra hours. Specific regulations regarding overtime hours are often outlined in collective bargaining agreements negotiated by unions.

Rest Periods

Icelandic law guarantees workers a minimum of 11 hours of uninterrupted rest every 24 hours. In addition to this, Icelandic workers are entitled to a minimum of 24 paid vacation days per year, on top of 15 public holidays.

Ergonomic Requirements

Workplace safety is emphasized in Icelandic legislation, which provides general guidelines for ergonomic considerations. However, detailed regulations regarding ergonomic requirements are usually determined by individual workplaces or industry-specific regulations.

Health and safety

Iceland prioritizes worker well-being through a comprehensive framework of health and safety regulations. The cornerstone of this system is the Act on Working Environment, Health and Safety in Workplaces No. 46/1980 (AOSH). This Act outlines the obligations of employers, the rights of employees, and establishes a system for enforcement.

Employer Obligations

The AOSH places significant responsibility on employers to ensure a safe and healthy work environment. Key employer obligations include:

  • Risk Assessment and Prevention: Employers must conduct risk assessments to identify potential hazards and implement preventative measures to minimize risks.
  • Instruction and Training: Employers are required to provide employees with instruction and training on safe work practices and the use of personal protective equipment (PPE).
  • Safe Work Procedures: Employers must establish and maintain safe work procedures to minimize the risk of accidents and injuries.
  • Accident Reporting and Investigation: Employers are obligated to report work-related accidents and illnesses and conduct investigations to identify and address root causes.
  • Provision of PPE: When preventative measures are insufficient, employers must provide appropriate PPE free of charge to employees.

Employee Rights

The AOSH also guarantees various rights to employees:

  • Participation in Safety Activities: Employees have the right to participate in activities that promote a safe and healthy work environment.
  • Right to a Safe Workplace: Employees have the right to be informed about potential hazards and to refuse work they believe is unsafe.
  • Reporting Unsafe Conditions: Employees have the right to report unsafe work conditions to their supervisor or safety representative without fear of reprisal.

Enforcement Agencies

The Icelandic Administration of Occupational Safety and Health (AOSOH) is the primary agency responsible for enforcing the AOSH. The AOSOH conducts inspections of workplaces, investigates accidents, and issues orders to employers to address safety violations.

In workplaces with ten or more employees, a designated safety representative is elected by the employees to collaborate with the employer-appointed safety officer on workplace safety matters.

This system of employer obligations, employee rights, and enforcement agencies works together to create a safe and healthy work environment for all in Iceland.

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