Labour Court Database __________________________________________________________________________________ File Number: CD87623 Case Number: LCR11458 Section / Act: S67 Parties: MATER/ST.VINCENTS HOSPITALS - and - INO |
New pay arrangements implemented by the two hospitals in respect of student nurses who commenced training in September, 1986 and March, 1987.
Recommendation:
5. The Court agrees with the Unions' contention that it is of
"fundamental importance to normal negotiations and industrial
relations practice" that the hospitals should not "unilaterally
reduce the salaries of student nurses who had commenced training,
thus breaching the terms of the contract" under which the nurses
are employed.
The Court finds further that the action taken by these hospitals
was in excess of the directive given by the Department of Health
in Circular No. 9/1987.
The Court notes however that the savings achieved by reducing the
salaries of student nurses have been built into the budgets for
1987 and that to make good the loss in this year would lead to
even more unpalatable consequences.
The Court therefore recommends that the Hospitals seek in their
budget for 1988 additional funds earmarked to make good the loss
which these nurses have suffered in 1987.
Division: CHAIRMAN Mr Collins Mr Devine
Text of Document__________________________________________________________________
CD87623 THE LABOUR COURT LCR11458
CC87859 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11458
Parties: THE MATER HOSPITAL
ST. VINCENT'S HOSPITAL
(Represented by the Federated Union of Employers)
and
IRISH NURSES ORGANISATION
Subject:
1. New pay arrangements implemented by the two hospitals in
respect of student nurses who commenced training in September,
1986 and March, 1987.
Background:
2. A first year student nurse salary of #7,204 p.a. was agreed
between the Department of Health and various unions, in the
current year. On 23rd April 1987 the Department issued a circular
letter (No. 9/1987) to all employing authorities which stated as
follows:-
"Recruitment
2. Contractual arrangements for recruitment of students
entered into prior to the effective date of the
Government's decision - 31 March 1987 - may be honoured
subject to the terms of paragraph 4 below provided (i)
that such arrangements have been made in writing; (ii)
equivalent savings in staff can be made elsewhere
before the student nurses are taken on and (iii) such
student nurses can be employed without exceeding your
1987 financial allocation.
3. Such contractual arrangements may only be honoured in
relation to the first intake of 1987 or the first half
of the year. No intake may take place in the latter
half of 1987 or later pending receipt of a further
letter from the Department.
4. Student nurses are to receive a flat allowance of #50
per week during the first year of training on the basis
that free accommodation etc. can be provided. (This
will be reviewed by the Department at the end of
1987)."
Each of the two hospitals had an intake of approximately 50
student nurses in September, 1986 and another 50 in March, 1987.
Following receipt of the circular letter the hospitals applied the
#50 per week allowance to these students, whose previous salary
level had been the agreed #6,904 p.a. The Irish Nurses
Organisation sought a reversal of this decision but no agreement
was reached in the course of local level discussions. The matter
was referred, on 25th May, 1987, to the conciliation service of
the Labour Court. Conciliation conferences took place on 8th
July, 1987 and 11th August, 1987. The matter was not resolved,
however and was therefore referred to a full hearing of the Labour
Court. The hearing took place on 24th September, 1987.
Union's arguments:
3. (i) The Union is seeking the restoration, with full
retrospection, of their original salary to 100 students
in each of the two hospitals. These students commenced
training at least 8 weeks before the Department of
Health circular was issued and therefore the #50
allowance should not be applied in their case. The
circular makes no reference to the retrospective
application of any of its terms.
(ii) A contract of pay and conditions existed between the
hospitals and the individual students and part of that
contract stipulated the relevant salary. Copies of
documents issued to these students prior to the
commencement of training were supplied to the Court.
These documents refer to salary levels while in
training. The hospitals should honour the contracts
entered into with the students. Student nurses are
most definitely employees of their parent hospital and
are subject the normal regulations that apply to
employees.
(iii) The action of these particular hospitals is at complete
variance with that of other similar hospitals who are
working under the same directions and financial
constraints imposed by the Department of Health.
(iv) The change in conditions was implemented without prior
discussion or agreement and in breach of normal
industrial relations procedures.
(v) The two Hospitals have ceased paying the agreed premium
pay rates to these students while continuing to roster
them for duty at night and at weekends. This has
resulted in even greater financial loss to the
individual student.
(vi) The Union is seeking:-
(a) full salaries to be restored to all student
members affected in both hospitals
(b) all financial loss since the changes were made
in May to be made good
(c) that the hospitals acknowledge that they will
continue to honour nationally agreed salary
levels.
Hospitals' arguments:
4. (i) Both St Vincent's and the Mater Hospital were
particularly badly affected by the financial crisis in
the Health Services that followed the announcement of
the 1987 budget allocations for the various agencies.
The Mater Hospital received an allocation that was
3.354 million pounds less than that required to run the
Hospital at 1986 activity levels - effectively a
shortfall of 12.6%. St Vincents Hospital received 3
million pounds less than required - a shortfall of
12.27%. These shortfalls necessitated urgent action on
the part of both managements since it was clear that no
over-runs would be permitted. The situation was
exacerbated by the fact that the allocations were
received in mid-April, leaving two thirds of the year
to achieve the necessary savings. This meant that
savings in the order of 18.6% were required in the
Mater Hospital over the remaining part of the year and
in St Vincents Hospital, savings of 19.2% were
required. A range of cost cutting measures were
introduced immediately in both hospitals in an attempt
to remain within budget and since payroll represents
almost 70% of non-capital allocation, it was inevitable
that major savings would be made in this area. The
decision to implement the new arrangements for first
year student nurses is, in the case of both Hospitals,
an intrinsic and crucial element of this cost saving
programme. The measures were submitted to the
Department as part of the required cost saving
measures.
(b) In the Mater Hospital, 70 beds have been closed (on top
of previous closures in recent years - a total of 114
beds). Accident and emergency has been closed at 5.00
p.m. (except for nights on-take). Out-Patient Clinics
have been reduced by 30%. The workload in all service
departments is greatly reduced. There is also a
significant reduction in activity in theatres. No
locum cover is available to cover absences. Earnings
throughout the hospital have been greatly cut. One
hundred and twenty one jobs have been lost throughout
the hospital. Similar measures have been taken in St
Vincents Hospital on a two phased basis. The Hospital
has now 135 beds closed, 120 jobs lost, and reductions
similar to the Mater in casualty, out-patients, theatre
and service departments. St Vincent's Management have
asked staff to take unpaid leave in an attempt to
remain within allocation. In the case of both
hospitals, further measures may be needed between now
and year end if budgets are to be adhered to.
(c) Concession of the Union's claim in the present case
would result in significant over-runs that will not be
accepted by the Department of Health this year. The
estimated cost of concession of the claim is #200,000
in the case of the Mater Hospital and #220,000 in the
case of St Vincents Hospital. If this claim was to be
conceded either in full or in part, there are no
surplus funds available to meet the cost of concession
either within the general Hospital budget or within the
particular nursing budget. The cost would have to be
met by terminating the employment of student nurses.
In the view of the Managements of the two Hospitals it
is better to apply the new pay arrangements and
maintain the students in training.
(d) Management estimates that the effect on net earnings
for these students excluding Sunday and night duty
premia is approximately a #20 per week reduction taking
into account the reduced tax burden and the provision
of free meals and accommodation etc. It considers
that, in the context of the present financial situation
and the alternative measures which would be required if
the claim were to be conceded, the current arrangements
are not unreasonable.
RECOMMENDATION:
5. The Court agrees with the Unions' contention that it is of
"fundamental importance to normal negotiations and industrial
relations practice" that the hospitals should not "unilaterally
reduce the salaries of student nurses who had commenced training,
thus breaching the terms of the contract" under which the nurses
are employed.
The Court finds further that the action taken by these hospitals
was in excess of the directive given by the Department of Health
in Circular No. 9/1987.
The Court notes however that the savings achieved by reducing the
salaries of student nurses have been built into the budgets for
1987 and that to make good the loss in this year would lead to
even more unpalatable consequences.
The Court therefore recommends that the Hospitals seek in their
budget for 1988 additional funds earmarked to make good the loss
which these nurses have suffered in 1987.
~
Signed on behalf of the Labour Court
John M Horgan
8th October, 1987 -------------
A.K./U.S. Chairman