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Country snapshot

Key considerations
Which issues would you most highlight to someone new to your country?

From a regulatory standpoint, the Icelandic labour market is usually characterised as flexible compared to the labour markets in mainland Europe. 

What do you consider unique to those doing business in your country?

The labour market is largely regulated through collective bargaining. Collective agreements govern approximately 88% of the workforce. 

Is there any general advice you would give in the employment area?

Employers should follow all laws and relevant collective agreements. They should ensure that all employment-related decisions are based on legitimate business reasons.  

Emerging issues/hot topics/proposals for reform
Are there any noteworthy proposals for reform in your jurisdiction?

A bill was proposed in October 2014 that would change the working week from 40 hours per week to 35 hours per week. The bill has not yet been through its first reading. 

What are the emerging trends in employment law in your jurisdiction?

Emerging trends include a movement towards ensuring that there is increased female representation at the board level and an increased focus on achieving equal pay for women.

The employment relationship

Country specific laws
What laws and regulations govern the employment relationship?

The following laws and regulations govern the employment relationship:

  • the Working Terms and Pension Rights Insurance Act (55/1980);
  • the Act on the Rights and Obligations of Foreign Undertakings that Post Workers Temporarily in Iceland and on their Workers' Terms and Condition of Employment (45/2007);
  • the Act on Temporary Work Agencies (139/2005);
  • the Act on the Equal Status and Equal Rights of Women and Men (96/2000);
  • the Foreign Nationals' Right to Work Act (97/2002);
  • the Regulation on Foreign Nationals' Right to Work (339/2005);
  • the Holiday Allowance Act (30/1987); 
  • the Prohibition on Termination of Employment due to Family Responsibilities Act (27/2000);
  • the Act on Trade Unions and Industrial Disputes (80/1938);
  • the Act on Working Environment, Health and Safety in the Workplace (46/1980);
  • the Industrial Act (42/1978);   
  • the Act Respecting Labourers’ Right to Advance Notice of Termination of Employment and to Wages on Account of Absence through Illness and Accidents (19/1979);
  • the Act on Collective Dismissal (63/2000);
  • the Act on Workers’ Right in the Event of Transfer of Undertakings (72/2002);
  • the Act on Fixed-Term Employment (139/2003);
  • the Act on Part-Time Work (10/2004);
  • the Pension Act (129/1997);
  • the Act on Maternity/Paternity Leave and Parental Leave (95/2000);
  • the Act on Unemployment Insurances (54/2006);
  • the Act on Information and Consultation in Undertakings (151/2006);
  • the Act on 40-Hour Working Week (88/1971);
  • the Act on the Payment of Wages (28/1939); and
  • the Act on the Free Right to Employment and Residence within the European Economic Area (47/1993).

Who do these cover, including categories of worker?

The acts and regulations protect workers’ rights and address particular aspects of the employment relationship and the social rights of workers. They contain provisions on:

  • trade unions;
  • collective agreements;
  • employment contracts;
  • working time;
  • holiday allowance;
  • payments in case of accidents and sickness;
  • health and safety in the workplace;
  • information and consultation of workers;
  • access of foreign workers to the labour market; and
  • other related issues.

Are there specific rules regarding employee/contractor classification?

No specific rules regarding employee/contractor classification exist.

The tax authorities will assess an individual’s status as an employee or self-employed contractor in relation to the implementation of income tax legislation. The tax authorities assess each case based on:

  • the individual’s responsibility and independence;
  • whether it is a primary occupation;
  • work facilities;
  • whether a personal contribution is required;
  • how payment is arranged;
  • whether the person can work for other employers; and
  • other factors.

Must an employment contract be in writing?

Oral employment contracts are valid, but in accordance with labour laws, a written employment contract is recommended. 

Are any terms implied into employment contracts?

The terms of a collective agreement are considered to be incorporated in the relevant workers’ employment contracts. These include basic provisions (eg, minimum wages) and other terms (eg, working time, holiday, paid leave and paid sick leave).

Are mandatory arbitration/dispute resolution agreements enforceable?

According to the Act on Contractual Arbitration (53/1989), the parties can agree to submit a dispute to arbitration if it relates to a matter which can be resolved via settlement. Arbitration agreements can pertain to existing or future disputes. Arbitration/dispute resolution agreements which are made in accordance with the law and the relevant collective agreement are binding.

How can employers make changes to existing employment agreements?

If an employer intends to change an employee’s terms of employment unilaterally, it must adhere to the rules regarding termination and inform the employee about all changes to his or her contract. Changes take effect when the notice period expires.

An employee can refuse to accept changes to his or her employment contract, at which point the employment relationship will be terminated once his or her notice period has expired.

Foreign workers
Is a distinction drawn between local and foreign workers?

In accordance with the Working Terms and Pension Rights Insurance Act (55/1980), no distinction is made between foreign workers and domestic workers, as long as they comply with the applicable measures in relation to access to the labour market.


What are the requirements relating to advertising positions?

In accordance with the Act on the Equal Status and Equal Rights of Women and Men (10/2008), advertisers cannot advertise or publish an ad for a vacant position indicating a preference for one sex over the other. This provision does not apply if the advertiser is promoting more equal representation of women and men within an occupational sector. The same will apply if there are valid reasons for advertising for a man or a woman only.

Ads that belittle or disrespect either sex and run contrary to gender equality in any way may not be published in the media or any other public forum.

Background checks
What can employers do with regard to background checks and inquiries in relation to the following:

(a) Criminal records?

Employers can ask applicants and employees to provide their criminal records or allow the employer to access their criminal records.

(b) Medical history?

Employers are generally prohibited from asking about the health of an applicant or employee, unless this is justified by an occupational requirement.

Employers can ask employees to provide a doctor's note for absences due to illness. 

(c) Drug screening?

Drug tests can be carried out in limited circumstances – for instance, where working under the influence of drugs or alcohol could give rise to health and safety considerations (eg, staff who drive or operate machinery), or seriously damage the employer's business.

Applicants and employees must consent to drug and alcohol testing. 

(d) Credit checks?

Credit reporting agency Creditinfo collects credit history and offers credit reports in Iceland. Only the individual, banks, other lending companies and attorneys in relation to debt collection can access information on his or her credit history through the agency. However, employers can obtain an employee’s credit rating with his or her consent.

(e) Immigration status?

Employers can obtain information on an employee’s immigration status with his or her consent.

(f) Social media?

Information on social media is considered public. Icelandic legislation does prohibit employers from looking up public information. 

(g) Other?

Employers may ask applicants or employees to provide proof of qualifications to drive specific vehicles (eg, forklifts or trucks), depending on the job and required duties.

In relation to the above background checks, it is important that all information that an applicant or employee is asked to provide is appropriate, relates to the job in question and does not discriminate or discourage people from applying for the job. There must be a justifiable reason for every check and why an applicant or employee is being asked to provide such information.

Wages and working time

Is there a national minimum wage and, if so, what is it?

Icelandic law and regulations on employment do not provide for an official national minimum wage, regardless of occupation. However, collective agreements between unions and employer associations (for certain professions) are generally binding, which means that they also apply to non-union members. Wages and other employment terms contained in collective agreements are considered the legal minimum terms for the occupational sectors to which they apply.

Are there restrictions on working hours?

According to the Act on Working Environment, Health and Safety in Workplaces (46/1980), the maximum working hours per week – including overtime – may not exceed 48 hours on average during each four-month period.

Working hours must be arranged to allow employees at least 11 consecutive hours of rest each day and at least one day off each week.

Hours and overtime
What are the requirements for meal and rest breaks?

Meal and coffee breaks are regulated by collective agreements. These agreements also govern the duration of breaks and whether they are paid.

The duration of meal breaks varies between different sectors of the labour market, ranging from 30 minutes to one hour. Lunch breaks are not counted towards working time and are therefore unpaid. Coffee breaks are paid as working time. 

Meal breaks and coffee breaks during overtime are considered working time and are paid according to the applicable overtime rate.

How should overtime be calculated?

Icelandic legislation outlines how overtime should be calculated.

Collective agreements include provisions on overtime wages. What constitutes overtime varies between collective agreements.

According to most collective agreements, overtime must be paid at an hourly rate that is equivalent to 1.0385% of the employee’s monthly wages for regular day work. Work on major holidays must be paid at an hourly rate that is equivalent to 1.375% of the employee’s monthly wages for regular day work.

What exemptions are there from overtime?

Employers and employees can agree that compensation for overtime work be provided in the form of additional compensatory leave.

Is there a minimum paid holiday entitlement?

The Holiday Allowance Act (30/1987) sets out minimum holiday entitlements and a holiday allowance; collective agreements contain further rights, based on factors such as length of service and age.

The act provides for a minimum of two working days of holiday for each month of employment during the past holiday allowance year (May 1 to April 30). Therefore, the minimum holiday for each year is 24 working days. Sundays and other public holidays are not count as holidays in this respect; nor are the first five Saturdays during holidays.

The minimum holiday allowance is 10.17% of total wages. 

What are the rules applicable to final pay and deductions from wages?

Final pay
Employees have the right to wages during their notice period. The duration of an employee’s notice period is defined by law, collective agreement or his or her employment contract.

Severance pay is not typically provided beyond the agreed salary during the notice period, unless otherwise agreed by the parties.

A worker who is deprived of his or her right to lawful notice of termination can claim damages, equal to his or her loss during the notice period. On the other hand, where the worker leaves without giving the required notice, the employer may have a right to claim damages. There are exceptions where no notice is required – for example, in case of gross misconduct by either party or dangerous or insufficient working conditions.

Deductions from wages
Employers can make deductions from wages in limited circumstances. According to law and as set out in collective agreements, employees must contribute 4% of all wages to a pension fund. Employers must withhold pension contributions from employees’ wages.

Employers must also withhold at the source trade union membership fees in accordance with the collective agreement.

Further, employers must deduct personal income tax and municipal income tax from employees’ wages every month and return the withholding tax to the local Inland Revenue Office.

Further deductions are permitted if the employee has expressly authorised them.

Employers cannot deduct from employee wages to repay moneys owed by them.

Record keeping
What payroll and payment records must be maintained?

According to the collective agreements, employees must receive pay statements when wages are paid, including a breakdown of the wage calculation. Further, all deductions must be itemised (ie, withholding tax).

Discrimination, harassment & family leave

What is the position in relation to:
Protected categories

(a) Age?

According to the Constitution, everyone is considered equal before the law and afforded human rights, irrespective of age.

A distinction based on age is allowed only where it is based on an objective and reasonable justification. A justified distinction should involve a legitimate goal and the appropriate and necessary means to achieve this goal.

(b) Race

According to the Constitution, everyone is equal before the law and enjoys human rights, irrespective of their race.

The Working Terms and Pension Rights Insurance Act (55/1980) provides that foreign workers who have complied with all necessary measures must be treated the same as domestic workers.

(c) Disability?

Only a justified distinction is allowed. 

(d) Gender?

Men and women enjoy equal rights in all respects. As such, only a justified distinction is allowed.

According to the Act on Equal Status and Equal Rights of Women and Men (10/2008), employers cannot discriminate between applicants on the basis of gender. The same applies to promotions, changes of position, education offers, vocational training, study sabbaticals, dismissals, working conditions and the working environment.

Women and men employed by the same employer are entitled to equal pay and equal terms for comparable work.

(e) Sexual orientation?

Only a justified distinction is allowed. 

(f) Religion?

Only a justified distinction is allowed. 

(g) Medical?

Only a justified distinction is allowed. 

(h) Other?

According to the Constitution, everyone is considered equal before the law. Employers must generally ensure that workers enjoy their right to equality in accordance with the Constitution and the European Convention on Human Rights, which was enacted and implemented in Icelandic law by Act 62/1994.

Family and medical leave
What is the position in relation to family and medical leave?

Maternity/paternity leave
Parents who are active on the labour market have a right to maternity or paternity leave and parental leave according to the Act on Maternity/Paternity Leave and Parental Leave (95/2000). The same right applies to parents who are self-employed, those who are not active on the labour market and those attending full-time educational programmes.  

A parent is eligible for payments from the Maternity/Paternity Leave Fund if he or she has worked on the domestic labour market for six consecutive months before the first day of his or her maternity or paternity leave.

These payments amount to 80% of the employee’s average gross wages or are calculated based on a continuous 12-month period, ending six months before the birth of the child. The maximum monthly amount for 2015 is Ikr370,000. Part-time (25% to 49%) employees must receive at least Ikr100,720 per month for maternity/paternity leave. Full-time (50% to 100%) employees must receive at least Ikr139,591 per month for maternity/paternity leave.

Parental leave – unpaid 
Parents with a child under eight years old are entitled to 13 weeks of unpaid independent parental leave in order to care for the child. Parental leave is not accompanied by payment from the Maternity/Paternity Leave Fund. An employee can take parental leave after six consecutive months of employment with the same employer.  

The employment relationship must remain unchanged during maternity, paternity and parental leave.

Absence from work due to sickness 
The Act Respecting Labourers’ Right to Advance Notice of Termination of Employment and Wages on Account of Absence through Illness and Accidents (19/1979) regulates the rights of employees who cannot perform their normal duties due to sickness or injury which occurred during their free time. These minimum requirements are expanded upon within collective agreements.

During their first year of service with an employer, employees are entitled to two days of sick leave each month. After one year of employment, employees are entitled to their full wages for one month out of every 12 months. After three years of employment, this increases to one month of full wages and one month of day wages every year. After five years of employment with the same employer, employees are entitled to one month of full wages and two months of day wages every year.

The employment relationship continues while the employee is absent.

Attending sick children and other compelling family reasons 
Collective agreements provide parents who have worked for one month with a total of seven working days out of every 12 months to care for a sick child under 13 years old, provided that sufficient attendance cannot be arranged in another way. After a year of service with the same employer, parents are likewise entitled to a total of 10 days to care for a child under 13 years old. During this time, the parent is entitled to his or her full wages for day work, including shift premiums where applicable.

Accidents at work and occupational diseases
The Act Respecting Labourers’ Right to Advance Notice of Termination of Employment and to Wages on Account of Absence through Illness and Accidents (19/1979) regulates the rights of employees who have had accidents at work or contracted occupational diseases where the employer, its subordinates or others under the employer’s control are not responsible. These rights are expanded upon within collective agreements.

In addition to sick leave, employers must pay an employee’s wages for up to three months, according to the employee’s day wages when the accident or illness occurred, provided that all social security and national health insurance payments are paid directly to the employer.

The employer must refund the employee all normal medical expenses, provided that this cost is not refunded by the worker’s health insurance or social security.

Employer accountability 
f the employer, its subordinates or others under the employer’s control are responsible for a worker’s injury in the workplace, the Act on Torts (50/1993) applies. Damages paid under the act are significantly higher than those discussed above and cover both material and immaterial injuries to the employee’s health. 

What is the position in relation to harassment?

According to the Penal Code (19/1949), anyone found guilty of sexual harassment will be imprisoned for up to two years.

According to the Act on Equal Status and Equal Rights of Women and Men (10/2008) and Regulation 100/2004, employers must take special measures to protect employees from bullying, gender-based violence, gender-based harassment or sexual harassment in the workplace.

What is the position in relation to whistleblowing?

The Penal Code (19/1940), the Act on the Office of a Special Prosecutor (135/2008), the Act on Investigation Commissions (68/2011) and the Competition Act (44/2005) all make it possible for an employee to report unlawful conduct in his or her employer’s business. According to the acts, anyone who submits information or material to the police or authorities may not be reported or charged, or must receive a reduced sentence, subject to other conditions.

Privacy in the workplace

Privacy and monitoring
What are employees’ rights with regard to privacy and monitoring?

According to the Constitution, all citizens enjoy a right to privacy. This right may be limited by statutory provisions if this necessary to protect the rights of others.

According to Rule 837/2006, discreet surveillance is permissible only on the basis of a legal act or court order. Electronic surveillance must be carried out for specified, explicit and legitimate purposes (eg, security or property protection).

Any personal data collected through electronic surveillance can be stored only if necessary for the purposes of surveillance.

In accordance with the law, the subject of electronic surveillance has the right to access any collected data which pertains to him or her (eg, by listening to sound recordings). 

To what extent can employers regulate off-duty conduct?

The manner in which employees spend their time outside working hours is generally irrelevant to employers.

According to the principle of freedom of contract, the parties to a contract are free to negotiate their own terms. Provisions on off-duty conduct in an employment contract are valid. For example, an employer can negotiate that employees may not work for other employers.

According to the Act on Contracts, Agency and Void Legal Instruments (7/1936), a contract may be set aside or amended, in full or in part, if it is considered unfair or contrary to good business practices.

Are there rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

No specific rules exist regarding social media, so the general rules regarding privacy and the right to monitor apply.

The right to privacy is enshrined in the Constitution.

The Act on the Protection of Privacy as regards the Processing of Personal Data (77/2000) does not prohibit employers from asking employees for their social media passwords. However, in accordance with the Constitution and Act 77/2000, employers should not ask for social media passwords unless they are needed for specified, explicit and apposite purposes and used only for such purposes.

Trade secrets and restrictive covenants

Intellectual Property
Who owns IP rights created by employees during the course of their employment?


According to the Act on Employee Inventions (72/2004), if an employee creates an invention within the scope of his or her duties, his or her employer may own the rights to the invention, provided that it is used within the employer’s field of work.

The employer will also hold the rights to an invention – although the use of the invention need not be within the employer’s field of work – if the invention is linked to a specific task with which the employee has been charged. This also applies where multiple employees submit an invention.

If an employer does not wish to exercise its ownership rights, the inventor-employee can apply for a patent in respect of the invention, under certain conditions.

The party that registered or uses a trademark in accordance with the Trademark Act (45/1997) owns it. The author need not be the owner.

According to the Copyright Act (73/1972), the author of a literary or artistic work has proprietary right thereto. An author may assign, in whole or in part, his or her copyright to a work. Unless expressly agreed, an assignment of copyright does not entitle the assignee to alter the work.

If the creation of a computer program is listed as an obligation in an employee’s employment contract, the employer will own the copyright to the program unless otherwise agreed.

Restrictive covenants
What types of restrictive covenants are recognised and enforceable?

Non-compete clauses and non-solicitation clauses are recognised and enforceable. According to case law, these provisions are valid as long as they accord with the Act on Contracts, Agency and Void Legal Instruments (7/1936).

Other restrictions are set out in the law.Bottom of Form According to the Act on the Surveillance of Commercial Practices and Marketing (57/2005), anyone with knowledge or control over professional secrets may not provide such information without permission for three years following the end of his or her employment. Anyone who has been entrusted with plans, descriptions, recipes, models or the like is forbidden from using this information for himself or herself or providing such information to others without authorisation.

In addition, a non-statutory rule applies, which states that employees may not discuss anything that they learn at work which might harm their employer.

Are there any special rules on non-competes for particular classes of employee?

Employment contracts may contain a non-compete clause whereby, after leaving, the employee cannot carry out similar activities on his or her own behalf or enter into an employment contract with a competitor.

To be valid, a non-compete clause must comply with the Act on Contracts, Agency and Void Legal Instruments (7/1936). Non-compete clauses will be considered invalid where the commitment goes beyond what is necessary to avoid competition or unreasonably restricts the employee’s right to employment.

To assess the latter, the employer’s interest in the commitment will be considered. Further, the commitment will not be binding if the employee is terminated or dismissed without good cause or lawfully leaves his or her position on the grounds that the employer failed to meet its obligations.

Discipline and grievance procedures

Are there specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

No specific provisions in legislation or collective agreements set out procedures that employers must follow with regard to discipline and grievance procedures.

Industrial relations

Unions and layoffs
Is your country (or a particular area) known to be heavily unionised?

Iceland is heavily unionised.

What are the rules on trade union recognition?

According to the Constitution, associations – including political associations and trade unions – may be formed without prior permission for any lawful purpose. An association may not be dissolved by administrative decision. However, if a union’s activities are found to be unlawful, legal action will be brought without undue delay in order to dissolve the association.

According to the Act on Trade Unions and Industrial Disputes (80/1938), individuals can found trade unions and federations of trade unions in order to work jointly for the interests of the working class and wage earners in general.

Trade unions are open to all individuals within the relevant jurisdiction, in accordance with further fixed rules contained in the statutes. The district of a union cannot be smaller than a municipality. An association constitutes a trade union, even if it has members who do not have the legal right to enter it.

Trade unions are in charge of their own affairs, subject to the limitations set out in Act 80/1938. Individual members are bound by the laws of their respective unions.

Trade unions are legal contracting parties in relation to members’ wages and terms, provided that they have set out these activities in their statutes.

What are the rules on collective bargaining?

Collective bargaining is governed by the Act on Trade Unions and Industrial Disputes (80/1938), which empowers trade unions to negotiate agreements with employers concerning wages and other employment terms.

According to the Working Terms and Pension Rights Insurance Act (55/1980), a collective agreement is automatically binding on all workers and employers operating within its occupational and geographical area. Employees and employers need not be members of the signatory trade union for a collective agreement to apply. The act affects both domestic and foreign undertakings operating on the Icelandic labour market.


Are employers required to give notice of termination?

Employees are entitled to a statutory minimum notice period according to the Act Respecting Labourers’ Right to Advance Notice of Termination of Employment and Wages on Account of Absence through Illness and Accidents (19/1979). The act establishes the following minimum rights: 

  • after one year of continuous employment with the same employer – one month's notice;
  • after three years of continuous employment with the same employer – two months' notice; and
  • after five years of continuous employment with the same employer – three months' notice.

An employee who is entitled to one of the above notice periods must give the same notice if he or she wants to terminate his or her employment.

Collective agreements contain provisions on notice periods which are applicable during and after the first year of employment. The length of an employee’s notice period varies between collective agreements, but is usually three months for long-term employment.

Employers must respect the rules on notice of termination, unless the employee has, by intent or gross negligence, seriously violated the employment contract. Serious violations can justify rescission of the employment contract. 

Employees who are deprived of their right to notice of termination can claim damages equivalent to his or her loss during the notice period. 

What are the rules that govern redundancy procedures?

General rules on termination apply to redundancy procedures. Employers and employees can generally end employment contracts without reason.

Employees are generally hired under permanent employment contracts, which means that the contract can be terminated once the applicable notice period ends. Termination notice is mutual and terminations must be executed in writing and in the same language as the employee’s employment contract.

Terminated employees have a right to a final interview with their employer to discuss the reasons for termination. Further, employees can request these reasons to be stated in writing.

Are there particular rules for collective redundancies/mass layoffs?

The Collective Redundancies Act (63/2000) governs collective redundancies and mass layoffs. According to the act, ‘collective dismissals’ are defined as terminations within 30 days for reasons that are unrelated to the employees’ performance and which affect:

  • at least 10 workers in enterprises employing more than 20 but fewer than 100 persons;
  • at least 10% of all workers in enterprises employing more than 100 but fewer than 300 persons; or
  • at least 30 workers in enterprises employing at least 300 workers.

An employer contemplating a collective dismissal must consult with the employees’ representatives and provide them with an opportunity to propose alternative solutions in order to avoid or limit the number of dismissals or minimise their impact. The employer must provide all relevant information to the employees’ representative body. The employer must also notify its regional employment office of the proposed redundancies.

What protections do employees have on dismissal?

Certain categories of employee enjoy protection against termination.

According to the Act on Maternity/Paternity Leave and Parental Leave (95/2000), employers cannot dismiss a worker because he or she has given notice of intended maternity, paternity or parental leave or during maternity, paternity or parental leave without reasonable cause. The same rule applies to pregnant women and women who have recently given birth.

Employees enjoy further protections under the Act on the Equal Status and Equal Rights of Women and Men (96/2000), which prohibits dismissal on the basis of gender.

Under the Prohibition on Termination of Employment due to Family Responsibilities Act (27/2000), an employee may not be dismissed solely due to family responsibilities.

According to the Act on Workers' Rights in the Event of Transfers of Undertakings (72/2002), a transfer of undertakings constitutes valid grounds for dismissal. However, this does not prevent dismissals for economic, technical or organisational reasons entailing changes in the workforce.

According to the Act on Trade Unions and Industrial Disputes (80/1938), trade union members are protected against dismissals which are based on their duties as union representatives.


Jurisdiction and procedure
Which tribunals or courts have jurisdiction to hear complaints?

According the Act on Trade Unions and Industrial Disputes (80/1938), the Labour Court hears cases relating to:

  • violations of the act;
  • losses due to any unlawful stoppages of work;
  • violations of work agreements;
  • disagreements relating to the interpretation or validity of a work agreement; and
  • disputes between employers and employees which the parties have agreed to refer to the court, provided that at least three of the judges agree to hear the case.

A case which may not proceed before the Labour Court or which the Labour Court has refused to consider may be brought before the district courts.

What is the procedure and typical timescale?

Labour Court

Federations of trade unions and employer associations can proceed with cases before the court for and on behalf of their members. Associations that are not part of a federation must bring cases for themselves. Unaffiliated parties must also proceed with cases for themselves.

Labour Court decisions cannot generally be appealed to any other court; as such, they are considered final and binding.

It takes from a few days to up to six months to complete a case before the Labour Court, depending on its urgency.

District courts and Supreme Court
Judgments of the district courts (which all operate at the same level in different regional jurisdictions) can be appealed to the Supreme Court, provided that certain criteria are fulfilled. The Supreme Court is the final court of appeal in the Icelandic judiciary.

First-instance cases before the Supreme Court take between six and 12 months to complete. Appeals take between nine and 12 months.

What is the route for appeals?

Labour Court cases
Labour Court decrees and judgments are final and cannot be appealed. However, within a week of the pronouncement of a judgment or decree, the following may be referred to the Supreme Court:

  • a judgment or ruling regarding a dismissal;
  • a judgment of invalidation on the grounds that the case does not fall within the Labour Court’s jurisdiction;
  • an order on the duty to witness the swearing of oaths or fines for breach of court procedure; and
  • a decision on the imposition of fines.

District court cases
Any district court decision regarding a claim that exceeds Ikr300,000 (amended yearly based on the Credit Terms Index) can be appealed. The appeal filing fee for 2015 is Ikr776,097. If the claim does not fulfil this condition, a party can apply for permission to appeal before the Supreme Court.

If a case involves a non-monetary claim, the Supreme Court will decide whether the interests of the case amount to the minimum appeal requirement.

If the claim does not reach the minimum requirement and the Supreme Court does not consider the interests of the case important enough to amount to the minimum requirement, the party can still apply for permission to appeal before the court, provided that one of the following criteria is fulfilled:

  • The results of the case have considerable general value.
  • The results of the case relate to important interests of the party seeking to appeal.
  • There is a possibility that the district court judgment will be overturned, based on the available evidence.

A case must be appealed within three months of the district court judgment, in accordance with the Act on Civil Procedure (91/1991).