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government wage

HSE chief explains why 67 employees do not have to comply with public pay policy

Staff who signed contracts for a higher rate of pay can’t be made accept less money while those deals remain in place, the HSE told TDs today.

THE HSE HAS revealed that legally sound business cases have been made in respect of 67 employees at Section 38 agencies for approval to maintain existing pay.

In effect, it means that those staff members cannot legally be made comply with Government policy on public pay levels, as their contracts stipulate they should be paid on a higher salary scale.

Laverne McGuinness, the Chief Operating Officer with the HSE, gave an updated report on the situation to the Oireachtas health committee this afternoon — telling them that the 67 people in question had been ‘red-circled’ by the health service.

It comes in the context of a Government drive to crack down on non-compliance with public pay policy amongst the agencies.

There are currently 44 ‘Section 38′ organisations in the State providing health and social services on behalf of the HSE — accounting for some €2.5 billion in funding.

McGuinness told politicians today that “the process which has been ongoing with Section 38 agencies to reach compliance with Government pay policy is nearing completion”.

However, she said that out of a total of 143 business cases made by various agencies, arrangements had been made to cease certain payments for just 47 people.

In addition to the 67 cases mentioned already, the HSE is awaiting documentation regarding the contracts of an additional 14 employees, who may also be ‘red-circled’.

Amongst the other ‘business cases’ made to the agency, another four are working with the HSE to achieve compliance, while the cases of eight staff members at the CRC are being dealt with in a separate process.

Laverne McGuinness of the HSE []

What is red-circling anyway?

McGuinness and her HSE colleague Barry O’Brien, who heads up Human Resources, were questioned at length on the issue of salaries by members of the panel today.

McGuinness said that the submissions received from the agencies to date seeking approval to ‘red-circle’ pay arrangements in individual cases included “documentation supporting contractual entitlements on behalf of the individual staff concerned”.

These submissions have been made by agencies having obtained independent legal advice to ensure that action taken is done so in a legally compliant manner, thereby mitigating risk to the greatest extent possible.

She said the documentation was currently being reviewed by the HSE, and where considered appropriate, formal approval would be sought from the Department of Health to ‘red-circle’ the specific pay arrangements.


Barry O’Brien  []

O’Brien said that the 67 business cases were based on “contractual evidence which clearly says that the Section 38 has entered into a contract of employment with the individual which gives them the rate of pay which may be basic pay inclusive of allowances or simply a specific rate of pay”.

It’s only prudent that we would then take this view rather than incurring significant potential legal costs.

“It is not red-circling in perpetuity,” O’Brien said.

It is very specific to an individual and linked to length of contract.

McGuinness said that the concept of red-circling was effectively about “protecting the terms and integrity of that legal contract”.

To do otherwise there’d be huge issues and huge expense.

Once the person in receipt of the non-compliant salary left their post or retired, the position would then be filled at a lower pay rate, McGuinness said.


On the wider issue of payments, O’Brien said that “huge progress” had been made “in giving reassurance to the taxpayer as to compliance with public pay policy”.

“Prior to 2005 many of the Section 38s would have dealt directly with the Department and on that basis there was varying arrangements,” he said.

There was varying non-standard arrangements and the challenge for us was bring in standardisation.

“All I can say is that I think in the last 18 months there has been a lot of work towards achieving this.”

But he said ”There was always going to be the potential for red-circling and even that’s allowed for in Government pay policy”.

They recognised that there was the potential for this and they’ve put it in the policy.

“The remaining issues to be addressed” regarding Section 38 and Section 39 agencies will be achieved over the summer period, McGuinness said.

A full report will be issued by the HSE in September.

Read: ‘We are on the cusp of a government without Fianna Fáil or Fine Gael’

Read: Reports of ‘hundreds’ of dead fish due to foam in the Tolka

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