Notice to Capital Hotels staff

Published by Efling on

On May 1, the new collective agreement with SA gave Efling members in the private market a 17.000kr/month raise, plus other benefits. Some employers have tried to escape those raises, such as Árni Valur Sólonsson, owner of CapitalHotels. He terminated the wage section of all his employees’ contracts and told them they’d be rehired at uncertain terms, designed to counter the raises.

Efling considers this to be illegal on several counts.

Firstly, this breaches the spirit and letter of the collective agreement, for instance the agreement’s protocol on general raises:

The agreed general wage increase in the collective agreements between unions affiliated to ASÍ and SA means a minimum increase of the regular wages that an employee enjoys on that day when the increase pursuant to the collective agreement is to be implemented, regardless of the wages the employee in question receives.

It is not authorised to reduce or cancel overpayments by not paying general wages increases. Overpayments will therefore only be reduced or cancelled when complying with the provisions of the employment contract. […]

Protocol on general wages increase, Collective agreement of Efling and SA. Our emphasis.

The “provisions of the employment contract” that the quote mentions are rules which Árni didn’t respect. See below.

This viewpoint of Efling was confirmed by ASÍ, the confederation of labour:

The central committee of ASÍ deplores the reactions of those employers who have, after new collective agreements, resorted to the termination of workers’ wages, on the basis of cost increases inherent in the agreements coming into force.

The central committee emphasises that the social partners negotiate and produce collective agreements in good faith, with the expectation that both sides will work on their ratification and implementation.

Those employers who have resorted to dismissal of employees’ terms of payment, following the signing and acceptance of new agreements, go against the aims of the agreements and declare in plain words that they will not hold up their end of the bargain.

The central committee of ASÍ urges all relevant employers to withdraw all the resignations based on the aforementioned approach. ASÍ also reserves the right of all its member associations to declare unilaterally the termination of the new collective agreements with these specific employers for their intention not to respect and implement them. Further, the right of member associations is reserved to pursue actions to push for the making of new collective agreements with these parties, and to use all its available and legal means to that aim, including strikes.

Statement of the ASÍ central committee of May 15

This is not just speculation. In 2011, an employer who pushed people out of work in a very similar way to Árni Valur, by offering a “take it or leave it” skipping of raises, lost a case in the Labour Court.

Secondly, this breaks laws about mass layoffs. The laws, no 63/2000, state the procedures by which these layoffs must happen. Árni Valur did not observe them.

Efling sent a letter to Árni Valur detailing these and other issues — for example his use of an “80-100%” work ratio, which is not permissible — and informed SA, the business cartel, where Árni Valur is a member.

Initially, SA tried to defend these actions of Árni Valur, but after discussions with Efling, they sent a letter to their member companies, accepting our point of view:

[…] The collective agreement has a special emphasis on improvements for the lowest wages, so it is important for the negotiated raises to reach the wallets with no cuts.

There have been a few cases where overpayments have been cut, directly referencing the collective agreement. This is a very unfortunate reference, since the assumption was that the wage items of the agreement would be put into practice unchanged at the agreement’s implementation, as always happens when agreements are made. […]

“The collective agreement should ensure better conditions for all”, SA

Through all of this, Árni has given false and unhinged statements about the wages he offers, the union, and life in general. He has claimed he pays more than other hotel managers, which isn’t true, he’s slandered the leader of Efling (“…everyone felt good at my workplace until she came, that ****, the communist, to power in Efling”) and now, it seems, he’s lying to his staff about the entire incident.

The union’s position is clear. Árni Valur Sólonsson did not observe legal and collective agreement provisions. His case is now in the hands of the union’s lawyer.