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Article 1 of the Convention. Measures taken to combat unemployment. The Government indicates in the report received in October 2006 that the international financial crisis had an immediate and serious effect on the employment level, with unemployment rising by a factor of five in only six months, from 1.3 per cent to 9.1 per cent of the workforce since the fourth quarter of 2008. In response, the Government reports amending the Unemployment Insurance Act so as not to reduce unemployment benefit payments with respect to earnings up to a certain point. Workers in full employment were able to reduce their job proportions by as much as 50 per cent as part of the cutbacks made by their employers and retain up to 50 per cent of income-related unemployment benefits (up to a maximum of 110,000 Icelandic krona (ISK)) for up to six months without reduction due to earnings. Other measures were taken to enable the employer–employee relationship to be retained despite the operational difficulties caused by the recession and to keep workers active and in contact with the labour market. The Committee refers to its 2010 observation on the application of the Employment Policy Convention, 1964 (No. 122), and invites the Government to continue to provide in its next report on Convention No. 2 relevant information on the measures taken to combat unemployment.

Article 2(2). Coordination of the operation of the public and private employment agencies. In its 2005 direct request, the Committee noted that private employment exchanges were operating in the metropolitan area and in the rural areas of the country. In its report received in October 2010, the Government refers to the initiatives taken by the Directorate of Labour to promote employment to jobseekers. The Directorate of Labour is in charge of a project to create a varied range of opportunities for jobseekers regarding employment, education and other forms of activity and that the project involves many other bodies, including upper senior schools, institutes of continuing education, trade unions, companies, government bodies and NGOs. In its General Survey of 2010 on employment instruments, the Committee recalled the historical background in which Convention No. 2 was adopted in 1919. Convention No. 2 recognized the existence of private free employment agencies and required member States to coordinate the operations of private and public agencies on a national scale. The most recent international labour standards, such as the Employment Service Convention, 1948 (No. 88), and the Private Employment Agencies Convention, 1997 (No. 181), recognize the role played by public services and private employment agencies in achieving an optimal functioning of the labour market and thus the realization of the right to work. The Committee invites the Government to provide information in its next report on consultations that may have been held with the social partners to consider the ratification of the most recent Conventions regarding some of the issues covered by Convention No. 2 of 1919, namely, the Employment Service Convention, 1948 (No. 88), and the Private Employment Agencies Convention, 1997 (No. 181).

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Article 2, paragraph 2, of the Convention. The Committee notes that there are eight private employment exchanges in the metropolitan area, some of them being also active in the rural areas. They employ about 40-50 people in all. The Government also indicates that under the regulation on labour-market measures, the Directorate of Labour monitors the functioning of private employment exchanges. The Government states that no special measures have been taken to harmonize the functions of the private employment agencies and those of the public labour exchanges. The Committee notes that the International Labour Conference recognized the role played by private agencies in the operation of the labour market and that the Private Employment Agencies Convention, 1997 (No. 181) is now the up-to-date Convention in this area. The Committee invites the Government to continue to provide information on the manner in which Convention No. 2 is applied and on any developments, in consultation with social partners, which might occur with regard to Convention No. 181.