Observation (CEACR) - adopted 2014, published 104th ILC session (2015)

Employment Policy Convention, 1964 (No. 122) - Iceland (Ratification: 1990)

Articles 1 and 2 of the Convention. Employment trends and active labour market measures. The Committee notes the detailed report provided by the Government in November 2013, prepared in consultation with the Icelandic Tripartite ILO Committee. Referring to the goals set out in the Iceland 2020 policy statement, the Government indicates that a ministerial committee was appointed to examine the economy and the labour market. Two task forces were also appointed, one on the formulation of employment policy and job creation, and the other on labour market measures for the unemployed and remedial measures on vocational training and continuous education. As in the past, the aim was to develop an employment policy based on the principles established in collaboration with the social partners and various other entities, including representatives of the political parties. During the 2010–13 period, a regional development policy programme was implemented based on measures for innovation and employment development in line with Iceland 2020. One of the goals set out in Iceland 2020 is to reduce the unemployment rate to 3 per cent by 2020. The Government reports that there was a slow improvement in the labour market during the period covered by the report as the unemployment rate was, on average, 6 per cent during 2012, compared with 7.1 per cent in 2011. Following the period covered by the report, the Committee notes that unemployment decreased to 4.5 per cent in January 2014. Unemployment has been at higher levels in the metropolitan areas that in the rural areas in recent years. The lower exchange rate following the economic collapse had a positive effect on currency-generating employment sectors, such as fisheries, which are very important for many rural districts. One exception to this general pattern however is the poor employment situation in the Suðurnes region (unemployment rate was measured at 9.7 per cent in 2012). It further notes that a special programme entitled “A Way That Works”, a joint effort by government and the social partners which started in 2012, was designed to provide job-related remedial measures to 1,500 long-term unemployed people. The aim of the programme was to create new jobs for people who had been unemployed for long periods, with enterprises and municipalities, with support from the Unemployment Insurance Fund. The Government indicates that more than 1,400 people were engaged in work under the programme, two thirds of them in the private sector, and statistics show that 60 to 70 per cent of those who are engaged under schemes of this type are engaged for further periods when the funding ceases, becoming completely independent of the benefit system. The Committee invites the Government to continue to provide information on the impact of the measures taken to generate employment through the implementation of an active employment policy. It also invites the Government to include further information on the employment measures targeting the long-term unemployed.

Youth employment. The Government reports that unemployment rates among young people (aged 16–24) are far higher than among older people, standing at 14.6 per cent in 2011, 13.6 per cent in 2012 and 13.5 per cent in the first half of 2013. A number of job forums were established in Reykjavík and nearby municipalities in 2012 to serve people under the age of 25 who were neither involved in studies nor participated in the labour market. The Committee notes that the “Study is a Way that Works” programme, launched in 2011, aims to ensure access to places in secondary (post-compulsory) school for all applicants under the age of 25. Altogether, about 1,500 people registered on study courses under the programme, including 1,000 who were jobseekers. At the end of 2012, about 10 per cent of the group were back on unemployment benefits. A new group was admitted in the programme in autumn 2012, which was due to come to an end in the spring of 2014. The Committee invites the Government to continue to provide information on the impact of the measures taken to combat youth unemployment.

Education and training policies and programmes. The Committee notes that, in the context of Iceland 2020, emphasis was placed on a progressive educational policy in order to support economic development; this is to prioritize quality and investment in human resources, research and development. In allowing for this mutual relationship between educational and economic considerations, particular attention is to be given to enabling those who find themselves temporarily unemployed to have another opportunity to pursue studies or vocational training. The Committee invites the Government to provide information on the impact of the measures taken in the area of education and training policies and on their relation to the obtainment of productive employment for the beneficiaries of these measures.

Business development. The Committee notes the programmes launched in the field of entrepreneurial ventures. One such programme was focused on the development of individuals’ own commercial ideas, enabling them to work on these ideas for up to six months while drawing unemployment benefits. The Committee further notes the updated information the Government provides in its report concerning the Women’s Credit Guarantee Fund, including the total number of loan guarantees granted since 2011. The Committee invites the Government to continue to provide information on the impact of business development measures on employment creation and decent work.