Union shop

A union shop is a form of a union security clause. Under this, the employer agrees to either only hire labor union members or to require that any new employees who are not already union members become members within a certain amount of time. Use of the union shop varies widely from nation to nation, depending on the level of protection given trade unions in general.

In 1946, Justice Ivan Rand of the Supreme Court of Canada crafted what became known as the "Rand formula". Appointed as arbiter to settle the Ford Strike of 1945, Rand concluded that both federal and provincial labor law made strong trade unions national policy. If workers were allowed to opt out of paying union dues, the free rider problem would undermine this policy. Rand went further to argue that the free rider problem undermines workplace order by causing resentment between union and non-union employees.

Rand's decision required all workers to pay union dues, but protected the right of workers to not join the union or otherwise participate in sustaining it. In the late 1940s and 1950s, many Canadian provinces incorporated the "Rand formula" into their labor laws. By 1997, the federal government and six provinces (British Columbia, Manitoba, Newfoundland, Ontario, Quebec, and Saskatchewan) imposed the Rand formula on labor relations. Most of the laws provided for a religious exemption that imposed donation to a charity rather than union dues.

By 1994, 9 percent of collective bargaining agreements in Canada required the closed shop, while 42.3 percent required the union shop and 39.2 percent used the Rand formula. Just 3 percent used the agency shop, while 6.5 percent had the open shop.Alberta appointed an investigative committee in 1994 to see if adoption of American-style "right to work" laws would benefit the province. The committee strongly rejected the policy after Albertan employers strongly supported the union shop. Union shop clauses in Canadian collective bargaining agreements were enforceable.

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