All collective agreements in the private sector in Iceland contain so called "Priority clauses". Collective agreements within the public sector do not have priority clauses and, therefore, no examples of clauses obliging employees to join a trade union.
Priority clauses in collective agreements have a long history in Iceland and are firmly established by tradition and the structure of the Icelandic labour market is based on these clauses. Originally, their purpose was to protect the unions’ right of existence and hence the right to organize. Today they emphasise the importance of organized labour market, it’s stability and are interlinked with, and a vital component of, the duty to respect industrial peace during the duration of collective agreements. The Icelandic Constitution contains a special provision guaranteeing the right to remain non-unionised; Article 74, paragraph 2, states that no one may be obliged to be a member of an association. The Icelandic Priority clauses do not violate that provision.
A clear distinction must be made between closed shop clauses which exclude workers on the one hand and priority clauses on the other which do not have the same effect. In that respect, it should be noticed that freely negotiated priority clauses in collective agreements, such as the Icelandic ones, are in full conformity with ILO Convention No. 87 and 98. The closed shop clauses were dealt with by the Icelandic Parliament in 1995 when above-mentioned Article 74 was amended. The conclusions of the discussion there was, as stated in the opinion of the Constitutional Committee of the Parliament, that the priority clauses of collective agreements did not entail compulsory membership of the type covered in Article 74 of the Constitution. The provision was not intended to change the legal situation then prevailing on the labour market as regards priority clauses.