State could do deal with doctors over rises, says Howlin

State may face having to pay out up to €350 million in worst-case scenario

The Government could do a deal with doctors on compensation for failure by the State to pay them higher salaries agreed more than seven years ago, Minister for Public Expenditure and Reform Brendan Howlin has signalled.

The Irish Times reported yesterday that hospital consultants could be in line to receive millions of euro in compensation if findings of two cases successfully brought by doctors to the Employment Appeals Tribunal set a precedent.

About 150 consultants have also initiated separate High Court proceedings in relation to the failure of the Health Service Executive to pay salary increases set out in a revised contract agreed in 2008.

The HSE now estimates that it could cost between €250 million and €350 million to compensate consultants in full over the failure to pay salary increases due as part of the 2008 contract. The HSE believes the figure could be higher if legal costs are added.


Speaking on Tuesday, Mr Howlin said he had not yet held talks on the issue with the Department of Health.

“Like all determinations from the Employment Appeals Tribunal or any other labour body, obviously these are matters that have to be discussed and negotiated. And then whatever liabilities accrue to the State will be met through negotiation,” he said.

Prudent action

The HSE said that given the potential costs involved to the taxpayer it intended “taking the prudent action of appealing the findings of the Employment Appeals Tribunal”.

In one case the tribunal awarded Thomas Hogan, a former consultant anaesthetist at a number of Dublin hospitals, just under €100,000. John McDermott, who worked as a consultant endocrinologist at Blanchardstown hospital, was awarded €14,000.

Under the 2008 contract consultants agreed to major work-practice changes, the restriction and in some cases the elimination of private practice, weekend working and extended rosters.

In return, then minister for health Mary Harney offered them salaries of between €170,000 and €240,000, with increases to bring the rate up to these levels to be paid on a phased basis.

Public service salary cuts

The first payment was made, but not the second, following the collapse in the public finances.

Subsequently the State cut consultants’ pay by 15 per cent as part of wide-ranging public service salary reductions.

The tribunal found the non- payment of portions of the doctors’ salaries amounted to an unlawful deduction under the Payment of Wages Act.

The HSE argued it could not pay the increases in the absence of sanction from the Minister for Health or Minister for Finance under the terms of the Health Act.

However, the tribunal said it considered the legislation obliged the HSE to have terms approved by Ministers prior to it entering into a contract, and not retrospectively.

The Irish Hospital Consultants’ Association welcomed the awards. It said the salary underpayments at the heart of the claim were separate from other cuts imposed by the Government on public service personnel under the provisions of financial emergency legislation over recent years.

The Irish Medical Organisation said the tribunal decision "establishes as a principle that the monies were withheld unlawfully". It said it anticipated that a High Court case on the issues of the non-payment of the 2008 pay increases, which it launched on behalf of its members, would be heard in the coming year.

It said that, notwithstanding the serving of legal papers, it hoped the department would take steps to honour the 2008 contract in full.

Martin Wall

Martin Wall

Martin Wall is Washington Correspondent of The Irish Times. He was previously industry correspondent