A highly significant victory was secured at the Court of Appeal yesterday when the court ruled in favour of a man who had worked at Vietnam Restaurant before the company was declared bankrupt. Among other things, the court recognised that his wage claim should include overtime pay, thereby overturning the Reykjavík District Court's earlier ruling on that issue. The judgment is of enormous importance, not only for the claimant himself, but also for nearly forty other former employees, including members of Efling, whose cases are still awaiting resolution. Vietnam Restaurant was owned by restaurateur Quang Lé. Companies owned by Lé were declared bankrupt one after another during 2024. Collectively, these cases have commonly become known as the Wok On cases, after Wok On, Lé's largest restaurant chain. Suspected Human Trafficking and Other Offences WOKON, the operating company behind Wok On, was declared bankrupt on 12 June 2024. Prior to that, the Icelandic police had carried out extensive operations targeting companies owned by Quang Lé, who was suspected of human trafficking, money laundering, violations of foreign workers' labour rights, and organised criminal activity. At the time, Quang Lé owned a total of eight companies, either operating restaurants or holding real estate. Vietnam Restaurant itself was declared bankrupt on 12 September 2024, and the case decided by the Court of Appeal yesterday stems from that bankruptcy. Cheated Out of Overtime Pay Before the court, the claimant sought recognition of unpaid wages owed by the bankruptcy estate, including both ordinary wages and overtime pay, as well as accrued holiday pay. The bankruptcy trustee had already accepted the claim relating to ordinary wages, but disputed the overtime claim, which amounted to just under ISK 15 million. The claim was based on the fact that, from the outset of his employment contract in February 2022, the claimant had consistently worked far more hours than he had been paid for. He typically worked twelve hours a day, six days a week. During the proceedings, it was pointed out that, under Icelandic law, employers are responsible for maintaining accurate records of employees' overtime. Vietnam Restaurant had failed to do so. The bankruptcy trustee nevertheless argued that it was for the former employee to prove that he had worked the overtime in question. Co-workers' Testimony Proved Decisive As no time records or other documentation of working hours were available, the claimant called numerous former employees of Vietnam Restaurant as witnesses. They testified that both the claimant and the other staff members had routinely worked twelve-hour days, six days a week. Their testimony was consistent with statements they had previously given to the police, while the restaurant's opening hours further supported their accounts. In its judgment, the Court of Appeal held that, because Vietnam Restaurant had failed to establish the legally required system for recording employees' working hours, it was the employer's responsibility, and therefore that of the bankruptcy trustee, to rebut the employees' account of their working hours. The bankruptcy estate had failed to do so. Nearly ISK 20 Million Recognised as Priority Claims The Court of Appeal therefore upheld the claimant's assertion that he had worked substantial overtime, ruling that the overtime claim should be recognised as a priority wage claim against the bankruptcy estate. The overtime award amounted to just over ISK 14 million. The court also upheld the claimant's claims for ordinary wages and accrued holiday pay. In total, the Court of Appeal ruled that claims amounting to just under ISK 19.9 million should be recognised as priority wage claims in the bankruptcy proceedings of Vietnam Restaurant. The deadline for seeking permission to appeal the case to the Supreme Court is two weeks, although it remains unclear whether any further appeal will be pursued. Wage Theft Must Have Consequences As noted above, the outcome of this case is of tremendous importance for a large number of people, not only those who worked at Vietnam Restaurant, but also former employees of Quang Lé's other companies, where similar employment practices appear to have been widespread. Employees were allegedly required to work excessive hours, given very little time off, and denied the wages to which they were legally entitled. Similar claims have been submitted on behalf of former employees in all of Quang Lé's bankrupt companies. In most cases, however, the bankruptcy trustees have rejected those claims on the grounds that no records exist documenting the unpaid overtime. The Court of Appeal's judgment is expected to set an important precedent and should lead the bankruptcy estates to recognise the former employees' legitimate claims. Efling is very pleased with this major victory for justice at the Court of Appeal. Wage theft is unacceptable and must have consequences, including in bankruptcy proceedings.
Efling Union and Samhjálp have reached a collective agreement with the assistance of the State Mediator. The agreement was signed on 18 June. The agreement is a comprehensive collective agreement and is, in most key respects, comparable to Efling's collective agreements with public sector employers, including provisions on wage increases. Efling welcomes the successful conclusion of the agreement.
Efling stéttarfélag og Samhjálp félagasamtök hafa náð saman um kjarasamning með atbeina ríkissáttasemjara. Skrifað var undir samninginn 18. júní síðastliðinn. Um heildstæðan kjarasamning er að ræða sem í flestum aðalatriðum er sambærilegur og kjarasamningar Eflingar við opinbera aðila, þar á meðal þegar kemur að launahækkunum. Efling fagnar því að náðst hafi saman um samninginn.
