Rapidly changing employment landscape

28.05.2020 - 11:37
Mynd með færslu
 Mynd: Peter Stewart
Iceland’s famous Blue Lagoon is laying off 403 employees, while all of the country’s international air traffic controllers have also been laid off—but will be offered re-employment on reduced hours. The Efling union says the overall unemployment crisis is affecting non-Icelandic citizens proportionately worst.

Around a hundred air traffic controllers working for Isavia ANS, a subsidiary of the public-owned ISAVIA, were handed their notice yesterday but will be offered new contracts of at least 75 percent of normal hours. The affected controllers run international flights through Icelandic airspace, as well arrivals and departures at Reykjavík and Keflavík airports.

A company spokesman told RÚV the move is a reaction to the massive reduction in the number of aircraft controllers are dealing with each day and that the company has chosen to reduce employee hours rather than erode their hourly pay or other employment benefits. Air traffic in Iceland’s air traffic control zone is currently 80-90 percent down on recent years and the company’s income is down by the same amount as a result. 

Controllers will be offered full-time jobs again as soon as air traffic levels permit. 

The Blue Lagoon also hopes to re-employ staff when demand picks up. In the meantime, the company laid off 403 staff members yesterday (whose notice period will start on 1st June), and is cutting the wages of all remaining employees. The pay cut is most significant (30 percent) for the company’s executive director and board, and 25 percent for the CEO. Other staff will see their pay cut by less. A company spokesperson confirmed that many of those laid off are already on top-up benefits from the State of up to 75 percent of their wages. 

The Blue Lagoon will have been closed for around three months by the time it plans to re-open all its operations on 19th June.  

The managing director of the Efling union says that foreign nationals in Iceland are twice as likely to be on top-up benefits or full unemployment benefit at the moment than Icelandic citizens. After years of rapid expansion, the size of the immigrant community in Iceland has stabilised this year throughout the COVID-19 crisis, but has still grown slightly from around 49,000 at the start of the year to 51,000 at the start of this month. 

Efling’s Viðar Þorsteinsson says that foreign citizens are generally first to feel the pinch, largely because many work in sensitive industries like construction and tourism—and are often in the Efling union as a result.  

Around 36,000 foreign nationals are on the employment market in Iceland, including 13,966 on top-up or full unemployment benefits last month. That is equivalent to around 27 percent unemployment, when those working reduced hours are taken into account. In comparison, the average unemployment rate among Icelandic citizens was 17.8 percent in April. 

Viðar says the uncertainty is not only prevalent in Iceland and that many people plan to remain in the country as a result: “This recession is a bit special in that it doesn’t stop at national borders and it’s not sure that the situation is any better in other countries, and then there’s the travel restrictions and more.” 

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Alexander Elliott
Project manager
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