Trade Union - Shop Types

Shop Types

Companies that employ workers with a union generally operate on one of several models:

• A closed shop (US) or a "pre-entry closed shop" (UK) employs only people who are already union members. The compulsory hiring hall is an example of a closed shop—in this case the employer must recruit directly from the union, as well as the employee working strictly for unionized employers.
• A union shop (US) or a "post-entry closed shop" (UK) employs non-union workers as well, but sets a time limit within which new employees must join a union.
• An agency shop requires non-union workers to pay a fee to the union for its services in negotiating their contract. This is sometimes called the Rand formula. In certain situations involving state public employees in the United States, such as California, "fair share laws" make it easy to require these sorts of payments.
• An open shop does not require union membership in employing or keeping workers. Where a union is active, workers who do not contribute to a union still benefit from the collective bargaining process. In the United States, state level right-to-work laws mandate the open shop in some states. In Germany only open shops are legal; that is, all discrimination based on union membership is forbidden. This affects the function and services of the union. An EU case concerning Italy extended this principle to the rest of the EU in that it stated that, "The principle of trade union freedom in the Italian system implies recognition of the right of the individual not to belong to any trade union ("negative" freedom of association/trade union freedom), and the unlawfulness of discrimination liable to cause harm to non-unionized employees."

In Britain, also previous to this EU jurisprudence, a series of laws introduced during the 1980s by Margaret Thatcher's government restricted closed and union shops. All agreements requiring a worker to join a union are now illegal. In the United States, the Taft-Hartley Act of 1947 outlawed the closed shop.