5 September 2000 Media Statement

Hospital boards must consult on employment contracts

Health Minister Annette King says Hospital and Health Services (HHS) boards are now required once again to consult with the State Services Commissioner on employment contracts in the public health sector.

Mrs King said that in December last year, during the transition to the new Government, the previous National Government has suspended an Order in Council requiring HHSs to consult.

"We are puzzled why they should have done this, just before we took office. But an Order in Council has now reactivated the operation of some provisions in the Health and Disability Services Act 1993 that require HHSs to consult the Commissioner before finalising chief executive employment contracts or entering collective employment contracts with employees."

Mrs King said the Commissioner intended delegating to the Director-General of Health his function relating to collective employment contracts.

"Such contracts will be a function of the Director-General in terms of the New Zealand Public Health and Disability Bill. This will enable the Government to be better informed about vital industrial relations issues in the public health sector. Personnel costs make up 70 percent of the sector's costs."

Mrs King said that in 1997 the previous Government had also suspended the requirement that HHS boards needed to consult with the Commissioner before finalising the employment contracts of chief executives.

"This meant HHS boards could do what they liked, and led to some chief executives having terms and conditions that far exceeded anything anywhere else in the public sector. Because National suspended the requirement, this Government has not been able to know the terms and conditions under which chief executives have been employed. The suspension of the requirement has also led to large and secret payouts."

Mrs King said HHSs would retain principal accountability for managing employment relations with their staff, "but they have to take account of wider considerations as well as those in their own business."

ENDS

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