Closed Shop Agreements
When World War II ended a decade after the adoption of the NRA, the unions tried to compensate for wage cuts caused by the shutdown of wages during the war, which provoked a strike. Many people saw these strikes as economically destructive and union practices, such as company agreements, were becoming increasingly unpopular. Critics of the closed store said it encouraged unions to monopolize employment by limiting or closing membership completely. They also argued that the closed store allowed unions to force reluctant individuals to provide them with financial assistance. Under a company agreement, non-unionized workers must join the union or rely on workers linked to the dismissal. Where a trade union appoints a member or refuses to allow a new worker to become a member of the union and such exclusion or refusal is in accordance with the constitution of the union or for a just reason, the employer must dismiss the worker. This termination is not considered abusive. For example, a closure agreement can only be concluded with a majority union. In addition, workers who are not members of the union at the time the agreement is signed must not become unionized, although all new workers must then join the union to secure employment with the employer. Closed shop agreements were not included in the current LRA`s initial draft in the early 1990s.
However, they were later met under pressure from trade union organizations, although they were banned in many other Western democracies. On 2 February 1998, the High Court (Vestre Landsret) ruled in favour of the defendant company and declared that the dismissal was lawful under the Freedom of Association Act. The law provides the individual worker with protection against compulsory membership of the trade union. Protection is considered satisfactory if no worker already employed is likely to be dismissed because he refuses to join an organization with which the employer has concluded a closure agreement and if, before working, all candidates are expressly informed that membership in a given organization is a prerequisite for employment in that workplace. n. a company that hires only union members, voluntarily or in agreement with the unions, although the Labour Relations Act prohibits closed businesses. A “union shop” is a company in which a majority of employees voted to designate a union as their certified negotiator. Store closed, in the relations between the union and management, an agreement by which an employer undertakes to hire and employ only people who are reputable members of the union. Such an agreement is concluded under the terms of an employment contract.
Some observers believe that the abolition of the closed store has helped to minimize racial discrimination on the part of the unions. The Wagner Act allowed unions to effectively exclude black workers from employment opportunities and social benefits by simply denying them membership. The Taft-Hartley Act limited this practice by prohibiting the negotiation of security agreements that restrict union members` employment opportunities.