Govt putting right worth of underpayment to health workers
Initial sampling of District Health Boards' payroll records has found that around $550-$650 million is owed to DHB staff to comply with the Holidays Act.
Initial sampling of District Health Boards' payroll records has found that around $550-$650 million is owed to DHB staff to comply with the Holidays Act. It's expected to take up to two years for DHBs to review and rectify this historic issue.
"Many organisations have been dealing with the issue of how to identify and rectify Holidays Act non-compliance, but in Health the National government did nothing.
"We make no apologies for addressing this long term challenge we have inherited. We have instructed DHBs to work with unions to resolve this issue and ensure workers are fairly recompensed.
"I know DHB staff will want to know what this means for them and their family. It will take some time to give individual workers clarity about their situation and the timetable for repayments.
"This is a complex and time-intensive task. By its very nature, health work is a 24/7 proposition. There are over 100 different collective agreements and a range of rostering, allowances and overtime provisions which have changed over time.
"It's going to take 12 to 24 months for DHBs to rectify this issue and remediation costs will be staggered. Any further funding required will be dealt with through the usual cost pressure budget process.
"DHBs have included the estimated cost of Holidays Act liabilities in their end of year financial reporting, although a few DHBs are still to make comprehensive cost estimations. A substantial extra one-off cost is therefore included at the end of year results, taking the sector-wide deficit for 2018/19 to $1.081 billion.
"More than half of that, $666 million, is due to one-off costs - $590 million for Holidays Act compliance; $32 million as a result of the Resident Doctor strikes and $44 million for the previous National Oracle Solution project.
"The underlying deficit result is $415 million, compared to a budgeted result of $340 million – that's a $75 million or 22 percent variance which is in line with the year-end results for the last two financial years.
"Four DHBs (Canterbury, Waikato, Counties Manukau, and Southern) account for most of the underlying deficit - $268 million in total, that's 65 percent.
"While it will take time for some DHBs to reach a breakeven position, it can be done. Nine DHBs ended the year with a result close to budget or an improved result (excluding one-off costs).
"I have strengthened financial management at the DHBs with the largest deficits. There is now a Commissioner at Waikato DHB, a Crown Monitor at Canterbury DHB and I intend to appoint a Crown Monitor to Southern DHB. A Crown Monitor continues to support Waikato and Counties Manukau DHBs," David Clark said.
(With Inputs from New Zealand Government Press Release)