Meaning of 'closed shop'
In simple terms, a closed shop (or union membership agreement) is an understanding or agreement between an employer and one or more trade unions whereby the employer agrees not to employ (or to continue to employ) any person who is not a member of one or other of the trade unions party to that agreement.
Protection of job applicants and existing employees
Nowadays, the closed shop is a legal irrelevancy. It can no longer be used as an excuse for denying a person a job or for dismissing (or disciplining) a person who refuses to be or remain a member of a trade union (even if the union in question is recognised by the employer as having bargaining rights in respect of a particular class or group of employees). Furthermore, an employer cannot lawfully demand a payment from a non-union employee (or presume to make a deduction from that employee's wages or salary) as an alternative to the payment of trade union dues. In short, an individual has the absolute right to decide whether or not he or she wishes to join (or remain a member of) a trade union. Any employer who undermines that right (or bows to trade union pressure to dismiss or victimise an employee who refuses to 'fall into line'), will be liable to pay very heavy compensation indeed. For further particulars, please turn to the sections titled Dismissal and Dismissal on grounds of trade union membership elsewhere in this handbook.
It is also unlawful for an employer to refuse to interview or employ a job applicant who is not a member of a trade union (or of a particular trade union) or who has made it clear that he (or she) has no intention of joining a particular trade union or any trade union. A job applicant may complain to an employment tribunal if he (or she) suspects that he has been denied a job (or a job interview) for one or other of those reasons. The complaint must be presented within three months of the alleged unlawful act. If the complaint is upheld, the tribunal will order the employer to pay up to £53,500 by way of compensation (section 137 and 140, Trade Union & Labour Relations (Consolidation) Act 1992).
A person will be taken to have been refused employment because of his (or her) non-membership of a trade union (or because of his refusal to join a trade union) if an employer offers him a job on terms that no reasonable employer who wished to fill the post would offer.