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Durban - The National Education Health and Allied Workers Union (Nehawu) is on Friday flying in its lawyers to go to court to prevent the closure of McCord Hospital.
This is after talks between the hospital board and the KZN Department of Health over how to rescue the institution from its financial crisis apparently ended in deadlock again last night.
Neither the board nor the department would comment on Friday morning, saying an announcement would be made to staff at midday today.
Nehawu provincial secretary Zola Saphetha said the hospital management had been threatening to close down the institution this weekend and he believed that an announcement would be made on Friday.
“Our lawyers are flying down to Durban today to interdict the shutting down of the hospital and the retrenchment of workers.”
He said that while the hospital planned to retrench workers using Section 189aA of the Labour relations Act, the department would argue that this case is different and this section was not applicable.
“This case is different in that there is someone (the department) who is willing to rescue the institution. But all the leadership of McCord is interested in seems to be to make profit.
Saphetha said he felt that the hospital had used the workers as a tool to blackmail the department.
He said another argument that Nehawu would put forward in court would be that any closure of the institution would result in the health of many patients being jeopardised: “We are really disappointed with the leadership of McCord especially the chairman of the board.”
A senior manager at the hospital told the Daily News they would hold out for a decision on whether the board would accept the offer tabled by the Department of Health (DoH). He said the administrator they believe was brought in to close down the hospital, called management to a meeting on Wednesday and told them to wind down operations. “We told him we were not going to do that because the DoH had assured us that they would take over the hospital.”
He said service providers had been given notice of termination letters last week. On Thursday, they learnt there had been yet another meeting in the evening.
“The DoH seems to be fighting to take this hospital over, they keep wanting to negotiate but the board will not budge on their unreasonable demand.” He said they were not given feedback about the meeting on Thursday but were told staff would be advised of their and the hospital’s fate at midday on Friday.
“It’s so ironic and such a pity that this 103-year-old hospital, started for the poor and impoverished is being closed because the board wants to make a profit.” He said the job losses and services for patients would have knock-on effects. “People who have been working here for years will go home empty handed. We were told pensions fund payouts would follow in due process but when is that?”
Another manager said negotiations had deadlocked because the board wanted to be protected from future claims for 21 years, whereas the DoH had offered a capped amount.
In the offer presented by the DoH prior to this week’s negotiations, the DoH would take full control, as well as all future risk, of the hospital as of October 1, 2013.
The preamble states that as a result of “sustained operating losses it is no longer financially viable for McCord to operate the hospital in terms of the present Service Level Agreement.”
It also states that the hospital’s closure raises concern about the negative impact on health services for Durban, the significant job losses as well as the diminishing of the “institutional memory and capacity of McCord”.
The agreement on offer stipulates that the DoH would acquire the hospital without paying the hospital’s valued amount of R63.48 million, although it would pay R22.93m (less any money owed) to facilitate the ongoing operation of the hospital. This figure could be adjusted if the liabilities exceed the sum by more than 10 percent.
The DoH has paid R2.9 million for medical malpractice insurance premiums and would agree to pay McCord’s projected shortfall of R14m.
However, for 21 years from the date of takeover, claims can be made against McCord and its directors for acts of negligence, and the DoH offered R20m to cover against such claims.
All staff currently working at McCord would be employed by the DoH as long as they are eligible in terms of the Public Service Act. There would be consultation regarding the transferring of staff to the DoH.
According to a document relating to matters arising from a facilitation meeting held on Monday, feedback given by the board indicated that McCord had insufficient funds to operate into September, forcing the hospital to close by the end of this week.
It reads: “Payments for salaries in September will be paid from the hospital’s remaining reserves. There will be insufficient funds on 30 September 2013 to pay all outstanding leave and severance benefits to staff. These reserves are being eroded. The Hospital is committed to ensure all these monies are paid and as soon as the money is available, these will be settled.”
Regarding the takeover by the DoH, the board was “unable to reach agreement... on a suitable contract to regulate the takeover of the hospital”.
Earlier this month, staff held pickets after receiving an unsigned letter stating that McCord had given notice to the DoH of termination of the Service Level Agreement which meant all services would be terminated at the end of this month. It read that no agreement had been reached on the pending takeover.
Following this, MEC for Health, Sibongiseni Dhlomo, recommitted willingness to take the hospital over. “Negotiations have so progressed that there is now an agreement awaiting to be signed...”
The hospital’s money troubles first emerged due to the withdrawal of funding after it no longer met DoH conditions.
In a statement released by the DoH at the beginning of the year, it noted that one of the options which were presented by McCord Hospital was that the hospital would trade as a private hospital. McCord management informed the DoH that the institution was in the process of completing its application for a private licence.
Budget submitted by the hospital showed a profit over a period of three years. This is against government policy as funding is only given to non-profit organisations.