Generally, the law states minimum rights, and agreements made on the basis of more restricted rights are therefore void. The Icelandic labour system is mainly based on collective agreements. Law stipulates some basic principles concerning the worker's rights and duties, whereas there exists no complete legislation regarding labour and social affairs in Iceland.
Icelandic law contains provisions on the minimum rights that are ensured for all workers.
A typical feature of the current labour law is that it lays down certain minimum rights, while making it possible for the labour unions and employers to agree on better solutions through collective bargaining. The minimum pay and terms for the workers in Iceland are determined in collective agreements between the trade unions and employers. The agreements cover all workers in the relevant occupations in the geographical area to which each agreements applies. The agreements, however, apply not only to the members of the unions, cf. Article 1 of Act no.