The private hospital operator is reportedly working through the debt, which affects hundreds of current and former staff members.
Hundreds of Australian disability service workers and nurses have been caught up in an underpayment scandal involving national private hospital operator Healthscope worth some $21.7 million.
According to a report in Nine Newspapers this week, Healthscope said it was working to resolve the issues that have left employees either underpaid or without their full entitlements.
Healthscope revealed the underpayments in a company report to the Australian Securities and Investments Commission in April, and said it had hired external advisers to help determine the extent of underpayments. It said that where appropriate, the company had started remediation payments.
“While this review is ongoing, based on analysis undertaken during the financial year, Healthscope has recorded provisions of $21.7 million,” the company said in the report.
Quoting a Healthscope spokesperson, Nine Newspapers said the healthcare provider was working to resolve two issues that involved historical underpayments of 500 current and former staff at the Victoria-based disability support service Healthscope Independence Services, and accrual of annual leave for nurses in NSW hospitals.
“In both these instances we have advised the impacted staff, and have taken steps to resolve the issues as quickly as possible,” the company’s spokesperson was quoted as saying.
“These are both historic issues that predate Brookfield’s acquisition of Healthscope in late 2019.”
Healthscope was acquired by Canadian asset manager Brookfield after a 2019 $4.4 billion buyout, and runs a network of 38 hospitals in every state and territory in Australia, including the Prince of Wales Private Hospital, Northern Beaches Hospital and Newcastle Private Hospital. It reportedly employs more than 19,000 people.
As reported in Health Services Daily in April, Healthscope posted a loss of $649 million in 2023 after it wrote down the value of its business by $919 million, blaming forecasted changes in cash flow from revised expectations of hospital admissions and operating costs.
The spokesperson told Nine Newspapers that said the underpayment of staff at its Healthscope Independence Services business affected about 200 current and 300 former staff.
“Employees were incorrectly classified in our payroll system, resulting in historic underpayments,” the spokesperson was quoted as saying.
“Healthscope has engaged PwC to assist with the identification of employees affected and to calculate the remediation payments for individuals.”
Payments to current and former staff had been made progressively, with final payments reportedly expected to be paid this quarter.
“Healthscope self-reported the underpayments to the Fair Work Ombudsmen.”
A spokesperson for the Fair Work Ombudsman told Nine Newspapers the matter was under investigation, but would not comment further.
The other matter involving the accrual of annual leave for nurses in Healthscope’s NSW hospitals were blamed on complex clauses in the relevant enterprise agreement.
“The proper interpretation of those clauses is currently before the Fair Work Commission, and Healthscope is working constructively with the NSW branch of the Australian Nursing and Midwifery Federation to attempt to resolve the matter,” Healthscope’s spokesperson said.
The NSW branch of the union was also staying silent, saying it could not comment on the matter while it was before the Fair Work Commission.
The Department of Health and Aged Care is currently conducting a review of the private hospital sector and is expected to report back by the end of this month.
It follows a wave of hospital and service closures by the sector, including day surgeries, endoscopy centres, private hospitals, wound care centres, cosmetic surgery centres, dental centres, respiratory and sleep disorder clinics, dialysis clinics and mental health centres since 2019.