Our View: State hospitals doomed if politicians keep kowtowing to unions

Some 10 days ago, we had written that the most foolish decision taken by the Anastasiades government on Gesy was to allow public hospital workers to keep the public servant status when they became employees of Okypy, the state medical service that was created to run state hospitals and was supposed to operate like an independent legal entity.

Wednesday’s strike by hospital staff illustrated the irresponsible short-sightedness of the previous government which chose the path of least resistance, also, scandalously, rewarding workers by moving all of them to a higher pay scale as an added sweetener for the move. It even lumbered Okypy with hospital staff it did not require, because nobody could be left jobless, on public service pay and conditions.

Inevitably, unions representing hospital staff – doctors, nurses, admin clerks, cleaners, cooks, technicians etc – are now demanding that all employees of Okypy are put on public service pay and conditions. This was the reason for Wednesday’s eight-hour strike at all public hospitals, with unions claiming Okypy was discriminating against employees hired on contracts, and demanding everyone was placed on public service pay and conditions.

Currently, Okypy employs 7,500 people, of whom only 1,000 are on contracts. Unions are demanding the 1,000 are included in the collective agreements for public employees, making them eligible to incremental pay scales and all other benefits. Okypy, quite rightly, has refused to budge, because the long-term objective – admittedly in 20-30 years – is to have no public employees on its payroll.

There is also the issue of the law that established Okypy and stipulates the pay and conditions people would work under when they are not classed a public employee. The law has no provision for incremental pay scales as in the public service but allows the organisation to give a performance-related pay rise to employees that are considered to merit it. A rational stipulation that rewards productive workers in stark contrast to what happens in the public service in which even the laziest are rewarded.

The law, sadly, does not apply when unions are involved. The unions in effect are demanding that the Okypy law is violated so their demand is satisfied. Instead of making this clear to them, the government washed its hands of the dispute. On Thursday, President Christodoulides announced he was ready to help resolve the dispute, while labour minister Yiannis Panayiotou was offered to mediate. On Friday, health minister Popi Kanari said she would be meeting the two sides next week to try to find a solution.

This is indicative of the cowardice this government shows when dealing with the unions. There is no need for mediation. The case is black and white – the law clearly states that Okypy does not have incremental pay scales, which is what the unions are demanding for the non-public employees. A responsible government would have made this clear to the unions instead of shamelessly pandering to them and offering to mediate as if there could be a compromise on the law.

If it did not want to cite the law, it had another compelling argument. If it treated all workers as public employees, public hospitals would never be able to compete and be forced to shut down. Putting another 1,000 workers on the incremental pay scales of the public service, over and above annual pay rises, Okypy’s annual payroll, which is already unjustifiably high because it employs 6,500 public employees, would rocket. It is bad enough that at present the payroll accounts for close to 75 per cent of Okypy’s annual expenditure, leaving very little money for investment in new equipment and improving hospital facilities. If all Okypy staff became public servants, it is estimated that in 10 years its payroll would increase by 40 to 50 per cent, which would lead to the closure of all public hospitals.

The irony is that, according to the Gesy law, the government should stop subsidising state hospitals from June 2024. This subsidy is more than €100 million a year, and Okypy has requested the subsidy period be extended by three years. Finance Minister Makis Keravnos said on Monday that he intends to give a year’s extension on the understanding “that all the actions necessary for putting its house in order are taken by Okypy”. The audacity of the statement is astonishing.

How can Okypy put its house in order when it is burdened with the ever-increasing payroll of 6,500 public employees and has to operate under a host of union restrictions, paying overtime for work after 2.30pm and being obliged to have three times as many nurses per bed as private hospitals – nurses who are on wages that are, on average, 50 per cent higher than those paid in the private sector? How will Okypy put its house in order when the entire political system, including the government is pandering to selfish, irresponsible unions?

When public hospitals were placed, by law, under the authority of an independent legal entity, the idea was that they would eventually become efficient, cost effective and, ultimately, self-sustaining. It was also hoped that service to patients would improve as the hospitals would have to compete with private hospitals for patients. Patient service may have improved a little under the new regime, but the unions, which place the interests of their members above those of patients, are still calling the shots, with the blessing of the politicians.

If politicians carry on kowtowing to them, public hospitals are doomed.