Losing your job is a shock, and it raises questions about what is legal and what rights you have. Here are the key points about dismissal on the Icelandic labour market, which apply equally to Icelandic and foreign workers.
Collective agreements set the rules
Most employees in Iceland are covered by a collective agreement (kjarasamningur) negotiated by their trade union. These agreements set minimum wages, notice periods and other rights that an employment contract cannot reduce.
Check both your employment contract and the collective agreement for your sector. Your trade union can tell you which one applies.
Notice period
When employment ends, a notice period (uppsagnarfrestur) applies. Its length depends on your contract, the collective agreement and how long you have worked for the employer, and it typically increases with length of service.
During the notice period you keep your salary and rights. Both employee and employer must respect it.
Does the employer have to give a reason?
In the private sector the employer usually does not have to give a reason for dismissal, but under many collective agreements you can ask for the reasons and have a meeting about them. In the public sector stricter rules apply.
A dismissal may never be based on unlawful grounds such as pregnancy, trade union membership or discrimination based on origin, gender or other protected characteristics.
Employees with special protection
Some groups enjoy special protection against dismissal. This includes pregnant employees, parents on parental leave and union representatives. Dismissing them requires valid reasons, and the rules are much stricter.
Unlawful dismissal
If a dismissal is unlawful, the employee may be entitled to compensation. A lawyer can assess whether the correct procedure was followed and whether there are grounds for a claim. These cases fall under employment law.
If you are on a work permit, losing your job can also affect your residence permit, so seek advice quickly.
What to do next
If you think your dismissal was handled incorrectly, get advice quickly. Keep all documents: your contract, payslips, the dismissal letter and any messages. Your trade union can help, and a lawyer can assess your legal position.
Find a lawyer under employment law or browse lawyers in your region.