This case follows other arrests of construction workers from Poland, Latvia, or Lithuania in the Reykjavík area and in the western and southern regions of the country. In at least two cases in the south, one involving three Lithuanians in Stokkseyri and another involving three Poles in Rangáring Eystra, the workers were given suspended prison sentences and deported.

These cases come in response to a campaign by officials of several unions that organize construction workers and the Icelandic Confederation of Labor (ASI) to pressure government institutions to crack down on “social underbidding.” The term refers to the growing practice by contractors of bringing in immigrant labor, from countries in Eastern Europe or Asia in most cases, to work for several months for lower wages than union contracts allow in Iceland.

Contractors employ the practice so they can make the lowest bid on certain jobs and edge out competitors. This is done either “black,” that is, underground, or, as in the case of GT Contracting, under the cover of a “service contract,” where the hiring goes through a middleman in the workers’ country of origin, bypassing labor agreements in Iceland and local tax legislation. The latest court ruling upheld the use of service contracts of up to three months within the European Economic Area (EEA), an agreement between the EU and Iceland, Norway, and Liechtenstein.

The case in Stokkseyri also involved a service contract, although in that case the workers were found guilty and deported. Those workers were to receive a total of 90,000 kronur ($1,350) for working 11 hours a day, six days a week for three months. There are contradictory claims in the news: some report this was their monthly wage, while others said it would cover the whole three months. Even in the “best” scenario the pay is way below the minimum guaranteed by union contracts, which is around 100,000 kronur a month for a 40-hour week. According to ASI, hundreds of workers are undocumented, mostly in construction and tourism.

The nationalist character of the campaign by the union officialdom was highlighted at a conference on April 15 on “black business and illegal labor power,” called by Starfsgreinasambandid (SGS), the federation of unskilled workers’ unions. “The parties in the labor market have no police powers, those reside elsewhere,” said Kristján Gunnarsson, chairman of SGS, in his opening remarks. “We want the authorities to accept their responsibility and define their role, including where and how they can do their part to establish a legal and moral labor market in this country in the changed environment of EEA rules and growing globalization.”

Workers from EEA countries are exempt from having to obtain work permits for jobs in Iceland. According to a temporary clause in Icelandic law, however, this doesn’t apply to workers from states that recently joined the European Union (EU), mostly from Eastern Europe, until May 1, 2006. Even then, the period of “adaptation” can be extended by five more years.

At the SGS meeting, Unnur Sverrisdóttir, an official at the government’s Directorate of Labor, played on workers’ worries over the employers’ offensive on wages to advocate tougher immigration rules. “We must realize that if the period of integration isn’t extended, then people from the new [EU member] states will get unlimited access to the labor market here, and these are the people who have signed contracts of 90,000 kronur for a six-day workweek and 11-hour days.”

A few days later, Gissur Pétursson, head of the Directorate of Labor, suggested a new category of temporary and unrenewable work permits, supposedly restricted to “big projects or high demand in certain sectors.”  
 
Campaign against ‘social underbidding’
ASI formally launched a campaign on May Day under the slogan “One Right, No Cheating.” A full-page ad in both major dailies announcing the campaign stated, “Everyone loses on social underbidding.” It painted a false picture of all social classes losing out from these practices.

“Foreigners lose, because they are shortchanged on wages, benefits, and conditions,” the ad said. “Icelanders lose, because social underbidding undermines the gains that have been made on the labor market…. The companies lose, because social underbidding undermines the competitive position of those who play by the rules…. Society loses, because social underbidding undercuts the welfare system—the society we have built together.”

In practice, this perspective of class collaboration—which stems from the false notion that workers and bosses have common interests—has meant calling on the capitalist state for protection, instead of organizing native-born and immigrant workers, whether “legal” or “illegal,” to defend their living and working conditions.

The Kárahnjúkar dam construction project, employing around 1,300 workers, remains at the center of the employers’ antilabor offensive, as it has since the work started two years ago. From the outset, the main contractor, Italian-based Impregilo, used hiring agencies in Portugal and elsewhere to bypass labor contracts in Iceland.

In the fall of 2003, workers at the dam project, both native- and foreign-born, fought for everyone to be represented by unions and to be paid according to union contracts. An agreement was subsequently reached to uphold these contracts. Workers there report, however, that bosses often don’t pay wages in full, they “forget” hours from their wage-slips, and refuse to pay overtime for Saturday work. According to a survey by ASI, workers are paid up to 50,000 kronur below the labor agreement.

Disputes also continue over conditions in the highland camp. In addition to lower wages, these workers have been laboring under unsafe conditions, which are resulting in accidents on the job, sometimes fatal. On May 9, two workers at the dam were flown to a hospital in Reykjavík after falling around 10 meters (33 feet). They were working on the dam wall, with two others, when the platform they were standing on collapsed. One of them turned out to have a broken heel. On May 14, another worker was flown to Akureyri with an injured hip from a rock fall. One worker has been killed in a rock fall since the project started.  
 
 
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