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Employment Termination in Iceland

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Termination process

Employee contracts can be terminated at will if prior notice is provided. Employers are not required to provide any specific reason for terminating an employee.

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Notice period

Both employers and employees are required to provide notice three months before resignation or termination unless otherwise specified in the employment contract.

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Severance pay

There is no legally mandated severance pay, but unions can negotiate a mutual rate applicable to their members.

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Probation periods

Probations periods are typically capped at three months into the new job.