CLOSED SHOP UNION

A closed shop may be defined as an enterprise in which, by agreement between the employer and
his employees or their representatives, no person may be employed in any or certain agreed
departments of the enterprise unless he or she is, becomes, and, for the duration of the
agreement, remains a member in good standing of a union entirely comprised of or of which the
employees in interest are a part1.

A closed shop agreement is an agreement whereby an employer binds himself to hire only
members of the contracting union who must continue to remain members in good standing to
keep their jobs. It is "the most prized achievement of unionism." It adds membership and
compulsory dues. By holding out to loyal members a promise of employment in the closed shop,
it wields group solidarity2.

 ADVANTAGES:

a. The process of collective bargaining empowers unions to negotiate higher wages,

improved benefits and better working conditions for their members.

b. Union employees are guaranteed a voice and a vote in the affairs of their
workplace. The union represents and advocates for the employee in disciplinary
actions, including terminations. Unions typically fight to prevent worker layoffs,
hiring freezes, and permanent staff reductions, thus resulting in greater job
security.

c. Drawing from the adage of “power in numbers,” union employees have a

collective voice. In order to remain productive and profitable, companies are
compelled to negotiate with employees on workplace-related issues. Of course,
the ultimate example of the power of union workers is their right to halt all
production through strikes.

 DISADVANTAGES:

a. The higher wages and enhanced benefits that often won in union collective
bargaining negations can drive a business’ costs to dangerously high levels.
Companies that become unable to pay the costs associated with union labor are
left with options that can harm both consumers and workers. They may raise the
prices of their goods or services to consumers. They may also outsource jobs to
lower-paid contract workers or stop hiring new union employees, resulting in a
workforce that is unable to handle the workload.

b. By forcing even unwilling workers to pay union dues, leaving their only option
being to work somewhere else, the closed shop requirement can be viewed as an

1
Slord Development Corporation v. Benerando M. Noya, G.R. No. 232687, February 4, 2019.
2
Slord Development Corporation v. Benerando M. Noya, G.R. No. 232687, February 4, 2019 citing 642 Phil. 47
(2010) at 89-90.
 infringement of their rights. When a union’s initiation fees become so high that
they effectively bar new members from joining, employers lose their privilege of
hiring competent new workers or firing incompetent ones.

c. The protection of union intervention often makes it hard for companies to

discipline, terminate or even promote employees. Unions ultimately decide who
does and who does not become a member. Particularly in unions that accept new
members only through union-approved apprenticeship programs, gaining
membership can become more about “who” you know and less about “what” you
know.

d. The potentially adversarial relationship between the union and management — us

vs. them — creates a counterproductive environment. The combative nature of the
relationship, spiked by constant threats of strikes or work slowdowns, promotes
hostility and disloyalty in the workplace rather than cooperation and
collaboration.

e. All union workers are forced to take part in strikes called by a majority vote of the
membership. The result is lost income for the workers and lost profit for the
company.

MAINTENANCE OF MEMBERSHIP SHOP

There is maintenance of membership shop when employees, who are union members as of the
effective date of the agreement, or who thereafter become members, must maintain union
membership as a condition for continued employment until they are promoted or transferred out
of the bargaining unit, or the agreement is terminated.3

 ADVANTAGES:

a. It does not require an employee to join a labor organization and does not force
any person to become a union member as a prerequisite of employment. Hence,
there is more freedom and less restriction of their right to associate.

b. The employers have a privilege of hiring competent new workers which are not
limited to union members. Thus, employers have more freedom on who they can
hire regardless if such person is a union member or not. The absence of protection
of union intervention makes it easier for companies to discipline, terminate or
even promote employees.

c. Employees who are not union members will be free from the burden of paying
union dues, as well as free from being subject to union laws.

3
Ergonomic Systems Philippines, Inc. v. Enaje, G.R. No. 195163, December 13, 2017, citing PICOP Resources,
lncorporated v. Taneca, 641Phil.175, 187-188 (2010)
 d. The possibility that the employer’s business and financial cost will be critically
affected due to higher wages and enhanced benefits that often won in union
collective bargaining negations are minimized by the presence of employees who
are non-union members. Moreover, the probability of profit loss to be incurred by
the employers due to strikes and work stoppage conducted by employees who are
union members, is likewise reduced.

 DISADVANTAGES:

a. Employees, once having voluntarily joined a labor organization, are required to

remain a member thereof as a requisite for continued employment. Hence,
employees are forced to remain as member of the union as a condition for
continued employment until they are promoted or transferred out of the
bargaining unit, or the agreement is terminated.

b. The absence of collective bargaining power in the case of non-union employees

deprived them of the opportunity to negotiate for higher wages, improved benefits
and better working conditions. Thus, non-union employees do not have a
guaranteed voice and vote in the affairs of their workplace.

c. There is no group solidarity or power in numbers since employees are divided

between union and non-union members.