Union security
Encyclopedia
A union security agreement is a contractual agreement, usually part of a union
collective bargaining
agreement, in which an employer and a trade or labor union agree on the extent to which the union may compel employees to join the union, and/or whether the employer will collect dues, fees, and assessments on behalf of the union.
is often cited as the rationale for union security agreements. A classic study of the free rider problem is presented in Mancur Olson
's 1965 work, The Logic of Collective Action
. In labor relations, the free rider problem exists because the costs of organizing a union and negotiating a contract with the employer can be very high, while it is almost impossible to prevent non-union members from enjoying the benefits of the contract because employers will find it too costly to adopt multiple wage and benefit scales. Thus, the incentive is for each individual worker to "ride for free" by not paying the costs, which leads to the collapse of the union and no collective bargaining agreement. If the union collapses, each worker is worse off than if the union had negotiated the agreement. Union security agreements are one way of ensuring that all (or nearly all) workers incur the costs of collective bargaining (e.g., join the union and pay dues) so that everyone is better off. There are alternative solutions to the free rider problem in labor relations. One solution is for the state to provide rights (such as the right to administer welfare or pension funds, or to participate in a works council
) or benefits (such as unemployment insurance) only to unions or their members. Another solution is for unions to engage in members-only collective bargaining, which restricts the benefits of the contract to union members.
's Right to Organise and Collective Bargaining Convention, 1949
can "in no way be interpreted as authorising or prohibiting union security arrangements, such questions being matters for regulation in accordance with national practice."
Union security agreements are explicitly mentioned in the labor laws of many countries. They are highly regulated by law and court rulings in the United States
and to a lesser degree in Great Britain. The legal status of the union security agreement varies from province to province in Canada
and at the federal level, with a few provinces permitting but not requiring it but the majority of provinces (and the federal government) requiring it if the union requests it.
In most Western European countries, the closed shop
(one form of the union security agreement) is banned, while other forms go unregulated in labor law. But this is not a uniform conclusion, and law may vary widely. For example, in Germany
both the right to join a union and the right not to join a union are equally protected by law and the courts, and all forms of union security agreements are banned. The law in Belgium
has similar provisions. Still, since participation in the unemployment insurance system is compulsory and only unions have the right to administer this system, union membership in Belgium remains high.
Outside North America
and Western Europe
, the legal status of union security agreements varies even more widely. In New Zealand
, the closed shop is compulsory where a union has organized the workplace. Various types of union security agreements are permitted under labor law in the Philippines
. The closed shop was mandatory in Mexico
until the early 1990s, when a change in federal law permitted the union shop
, agency shop
, or no agreement at all. But because of the political ties between unions and the governing party in Mexico and other ways in which Mexican law favors established unions, the closed shop is essentially still the norm.
Many countries, however, have not addressed the issue of union security agreements. Neither Indonesia
n nor Thai
labor law addresses the issue, and in both countries collective bargaining, union administrative procedures, and dues collection are so weak that the union security issues rarely arise. The legal status of union security agreements has varied widely across each state and the national government and over time in Australia
. Australian labor law does not explicitly regulate union security agreements. However, various forms of the union security agreement have been favored at one time or another by each state, territory, or the national government, effectively regulating the favored type of union security agreement and disadvantaging its other forms.
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
collective bargaining
Collective bargaining
Collective bargaining is a process of negotiations between employers and the representatives of a unit of employees aimed at reaching agreements that regulate working conditions...
agreement, in which an employer and a trade or labor union agree on the extent to which the union may compel employees to join the union, and/or whether the employer will collect dues, fees, and assessments on behalf of the union.
Rationale
The free rider problemFree rider problem
In economics, collective bargaining, psychology, and political science, a free rider is someone who consumes a resource without paying for it, or pays less than the full cost. The free rider problem is the question of how to limit free riding...
is often cited as the rationale for union security agreements. A classic study of the free rider problem is presented in Mancur Olson
Mancur Olson
Mancur Lloyd Olson, Jr. was a leading American economist and social scientist who, at the time of his death, worked at the University of Maryland, College Park...
's 1965 work, The Logic of Collective Action
The Logic of Collective Action
The Logic of Collective Action: Public Goods and the Theory of Groups is a book by Mancur Olson, Jr. first published in 1965. It develops a theory of political science and economics of concentrated benefits versus diffuse costs.-Overview:...
. In labor relations, the free rider problem exists because the costs of organizing a union and negotiating a contract with the employer can be very high, while it is almost impossible to prevent non-union members from enjoying the benefits of the contract because employers will find it too costly to adopt multiple wage and benefit scales. Thus, the incentive is for each individual worker to "ride for free" by not paying the costs, which leads to the collapse of the union and no collective bargaining agreement. If the union collapses, each worker is worse off than if the union had negotiated the agreement. Union security agreements are one way of ensuring that all (or nearly all) workers incur the costs of collective bargaining (e.g., join the union and pay dues) so that everyone is better off. There are alternative solutions to the free rider problem in labor relations. One solution is for the state to provide rights (such as the right to administer welfare or pension funds, or to participate in a works council
Works council
A works council is a "shop-floor" organization representing workers, which functions as local/firm-level complement to national labour negotiations...
) or benefits (such as unemployment insurance) only to unions or their members. Another solution is for unions to engage in members-only collective bargaining, which restricts the benefits of the contract to union members.
Legal status
The International Labour OrganizationInternational Labour Organization
The International Labour Organization is a specialized agency of the United Nations that deals with labour issues pertaining to international labour standards. Its headquarters are in Geneva, Switzerland. Its secretariat — the people who are employed by it throughout the world — is known as the...
's Right to Organise and Collective Bargaining Convention, 1949
Right to Organise and Collective Bargaining Convention, 1949
The Convention concerning the Application of the Principles of the Right to Organise and to Bargain Collectively or Right to Organise and Collective Bargaining Convention is an International Labour Organization Convention. It is one of 8 ILO fundamental conventions.- Ratifications:-External...
can "in no way be interpreted as authorising or prohibiting union security arrangements, such questions being matters for regulation in accordance with national practice."
Union security agreements are explicitly mentioned in the labor laws of many countries. They are highly regulated by law and court rulings in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and to a lesser degree in Great Britain. The legal status of the union security agreement varies from province to province in Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
and at the federal level, with a few provinces permitting but not requiring it but the majority of provinces (and the federal government) requiring it if the union requests it.
In most Western European countries, the closed shop
Closed shop
A closed shop is a form of union security agreement under which the employer agrees to hire union members only, and employees must remain members of the union at all times in order to remain employed....
(one form of the union security agreement) is banned, while other forms go unregulated in labor law. But this is not a uniform conclusion, and law may vary widely. For example, in Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
both the right to join a union and the right not to join a union are equally protected by law and the courts, and all forms of union security agreements are banned. The law in Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
has similar provisions. Still, since participation in the unemployment insurance system is compulsory and only unions have the right to administer this system, union membership in Belgium remains high.
Outside North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
and Western Europe
Western Europe
Western Europe is a loose term for the collection of countries in the western most region of the European continents, though this definition is context-dependent and carries cultural and political connotations. One definition describes Western Europe as a geographic entity—the region lying in the...
, the legal status of union security agreements varies even more widely. In New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
, the closed shop is compulsory where a union has organized the workplace. Various types of union security agreements are permitted under labor law in the Philippines
Philippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...
. The closed shop was mandatory in Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
until the early 1990s, when a change in federal law permitted the union shop
Union shop
A union shop is a form of a union security clause under which the employer agrees to hire either labor union members or nonmembers but all non-union employees must become union members within a specified period of time or lose their jobs...
, agency shop
Agency shop
An agency shop is a form of union security agreement where the employer may hire union or non-union workers, and employees need not join the union in order to remain employed. However, the non-union worker must pay a fee to cover collective bargaining costs...
, or no agreement at all. But because of the political ties between unions and the governing party in Mexico and other ways in which Mexican law favors established unions, the closed shop is essentially still the norm.
Many countries, however, have not addressed the issue of union security agreements. Neither Indonesia
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
n nor Thai
Thailand
Thailand , officially the Kingdom of Thailand , formerly known as Siam , is a country located at the centre of the Indochina peninsula and Southeast Asia. It is bordered to the north by Burma and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the...
labor law addresses the issue, and in both countries collective bargaining, union administrative procedures, and dues collection are so weak that the union security issues rarely arise. The legal status of union security agreements has varied widely across each state and the national government and over time in Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
. Australian labor law does not explicitly regulate union security agreements. However, various forms of the union security agreement have been favored at one time or another by each state, territory, or the national government, effectively regulating the favored type of union security agreement and disadvantaging its other forms.
Types
Various types of union security agreements exist. Among the more common are:- Closed shop—The employer agrees to hire only union members. An employee who resigns from the union must be fired.
- Union shop—The employer may hire anyone regardless of their union membership status, but the employee must join the union within a set time period (such as 30 days). An employee who resigns from the union must be fired.
- Agency shop—The employer may hire anyone regardless of their union membership status, and the employee need not join the union. However, all non-union employees must pay a fee (known as the "agency fee") to the union to cover the costs of collective bargaining (and, in some countries, other fees as well). An employee who resigns from the union may not be fired but must pay the agency fee.
- Fair share provision—The employer may hire anyone regardless of their union membership status, and the employee need not join the union. However, all non-union employees must pay a fee (known as the "fair share fee") to the union to cover the costs of collective bargaining. An employee who resigns from the union may not be fired but must pay the fair share fee. In public sector collective bargaining, where the agency shop is often outlawed, the fair share provision (almost identical to the agency fee) may be negotiated instead.
- Dues checkoff—A contract between the employer and union where the employer agrees to collect the dues, fees, assessments, and other monies from union members and/or non-members directly from each worker's paycheck and transmit those funds to the union on a regular basis.
External links
- Sample union security agreement Arena Football Players Association and Arena Football League, 2007-2015.
- Sample union security agreement National Football League Players Association and National Football League, 2006-2012.
- Sample membership form SEIUService Employees International UnionService Employees International Union is a labor union representing about 1.8 million workers in over 100 occupations in the United States , and Canada...
Local 503 (mentioning union security agreement as part of dues notice)