Termination of employment

Provisions regarding termination and notice period can differ between one Collective Wage Agreement to the other.

  • Mynd: Edda Sigurdís Oddsdóttir

FÍN iterates the importance of contacting the union and seek counsel if termination of employment occurs and/or if any changes are made on terms of employment of the job itself.

Below can be found information about termination of employment according to laws and Collective Agreements.



Termination clauses

Termination shall be done in writing and based on end of the month. Length of termination notice and implementation can differ based on employment with public or general employer. If termination is bestowed on a registered confidant or employee which is in paternity / maternity leave additional rules apply.

Public labour market

Termination notice is at least 3 months for members with tenure (unlimited duration of employment). After 10 years of continuous employment and at certain physical age the notice period is extended. Employee can always resign with 3 month's notice. Temporary employment expires in accordance with terms of contract without any specific termination. Temporary employment can be terminated with a 1 month notice.

 Employment Notice
Tenure
  3 months
After 10 years cont. empl. and 55 years of age
  4 months
 After 10 years cont. empl. and 60 years of age  5 months
 After 10 years cont. empl. and 63 years of age  6 months

Cause of termination

Cause of termination of an employment must be objective and justifiable. Rules of procedure are twofold, on one hand based on fault of employee, i.e. violation of duties or inadequate performance, and employee must be given a possibility to object, reprimand, and amend any shortcomings. On the other hand, not based on fault of employee, such as organizational changes, termination in trial period or due to age. If the applicable job is abolished employee may have the right of severance pay.

Public servants can claim written reasoning for termination within 14 days of receiving termination.

Private labour market

Termination notice is at least 1 week on the first 3 months of employment, 1 month after 3 months of employment and 3 months after 6 months of employment. After 10 years of continuous employment and at certain physical age the notice period is extended. Employee can always resign with 3 months' notice.

 Employment  Notice
The first 3 months
  1 week
After 3 months of employment
  1 month
After 6 months of employment
  3 months
After 10 years cont. empl. and 55 years of age  4 months
After 10 years cont. empl. and 60 years of age  5 months
After 10 years cont. empl. and 63 years of age  6 months

Termination dialogue

According to applicable Collective Wage Agreement an employee has right to call for a meeting regarding hers/his termination and cause thereof. Request must occur within 4 days from termination. If employer accepts this request the meeting shall take place within 4 days. If employer rejects request or if employee asks in the end of a termination dialogue a written explanation/reasoning shall be given for termination. However, if employer refuses to give written explanation/reasoning an account shall be given in a meeting with the employee and relevant confidant or other representative of the union.

Work during termination notice

Employee has the right to work hers/his regular assignments during the termination notice. Employee and employer can negotiate shorter period or even no work contribution at all during the notice. In such contract both parties must agree on payments and duration of such payments. Note, if employer declines work contribution by the employee, full payments during the termination notice shall take place according to mentioned right.

Settlements

Employer shall pay all accumulated Vacation leave in the end of termination notice. Employer has no claim for employee to use Vacation leave during termination notice, such request can only come from the employee and shall be done in agreement with the employer. Note, if employee has the right of extended Vacation leave such extension is usually not paid as part of settlement. The termination notice shall benefit the employee in employment search.

Any claim for December or Vacation bonuses shall be paid in line with duration and proportion of employment. At point of termination such personal bonuses are either paid at same time as other settlements or at designated time as stated in the applicable Collective Agreement.

Additional detail

Provisions on terminations in Collective Wage Agreements and laws

All texts are in Icelandic and have not been translated by FÍN.

Provision on reprimands,  substantiates and the right to object

All texts are in Icelandic and have not been translated by FÍN.