Landsvirkjun adopts rules on chain liability

15. September 2016

Landsvirkjun has adopted rules on chain liability. The rules are intended to ensure that any party working indirectly for Landsvirkjun, for contractors, sub-contractors or temporary work agencies, enjoy rights and employment terms in accordance with law and wage contracts.

The Board of Directors of Landsvirkjun approved the rules at a Board meeting in late August. Provisions on liability will henceforth be included in all Landsvirkjun’s contracts on procurement, i.e. work contracts and contracts for goods or services. According to the provision to be inserted in Landsvirkjun’s contracts, a  contractor shall ensure, and assume liability in the event of non-compliance, that all employees, whether employees of the contractor, sub-contractors or temporary work agencies, are paid wages and offered employment terms, sickness and accident insurance and other rights in accordance with the contract, applicable collective wage bargaining contracts and law as current at any time.

In addition, a contractor is responsible for maintaining, and shall maintain in effect and current, insurance against damage resulting from accidents, sickness, diseases, medical costs or death of the contractor’s employees that can be attributed to the conduct of work. The contractor is responsible for ensuring that sub-contractors and temporary work agencies maintain similar insurance.

To date, Landsvirkjun’s contracts have provided that counterparties – contractors, sub-contractors and temporary work agencies – must in all respects observe laws and contracts in effect in the labour market; the new provision, however, defines the liability in greater detail and, in addition, Landsvirkjun is granted recourses to enforce the rules, as the provision includes penalties for non-compliance by a counter-party and for neglecting to provide information on request.

Hörður Arnarson, CEO:

“At Landsvirkjun we have always emphasised that our contractors and sub-contractors must observe current legislation and contracts; nevertheless, these new rules represent a milestone as they provide us with remedies that we can apply if rules are violated and, no less important, if requested information is not supplied. This will enable us to do even better in securing the rights of all those who work for us.”

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