Unionized employees at St. Mary’s Hospital in Passaic have tentatively agreed to a new contract that extends pay cuts and other concessions until the hospital begins to recover financially.
More than 500 nurses, technicians and other workers ratified a three-year contract, which goes into effect when the current contract expires on Feb. 28. The new pact continues court-assigned concessions until St. Mary’s reorganization plan is approved, at which time the nurses expect the hospital to begin restoring their pay in increments.
The employees have worked with a 5 percent pay cut — later reduced to a 4 percent cut by the hospital — and other concessions since March, when St. Mary’s declared bankruptcy, citing debts of $100 million.
Attorneys for the non-profit, 292-bed acute-care hospital filed a reorganization plan this month with the U.S. Bankruptcy Court in Newark and have until Jan. 6 for creditors to accept the plan.
The unions and St. Mary’s, who have been negotiating for months with an independent mediator, were pleased with the settlement.
“We had a mutually agreed upon mediator, who made compromise recommendations that turned out to be fairly reasonable,” said Virginia Tracy, executive director of JNESO, the union that represents 357 nurses and 131 technicians at St. Mary’s.
“It’s not ideal, but it gives them a chance to get back on their feet and us to get back what we lost,” Tracy said.
Another union, Operating Engineers Local 68, represents 20 licensed boiler room workers and other employees.
“Having the support of [the] unions, whose contracts were fully ratified this month, is an important step forward for the hospital,” Vanessa Warner, a spokeswoman for St. Mary’s, said in a statement Friday.
As part of the agreement, St. Mary’s will restore 2 percent of the workers’ wages when the court approves the reorganization plan; then 1 percent more in March, and another 1 percent in June, Tracy said. The hospital would also resume the employees’ annual “step” raise, an average 40 cents per hour increase, she said.
The hospital will not reinstate a paid half-hour lunch for employees, she said. But it will pay time-and-a-half to a 12-hour shift worker who is not relieved by another worker in order to eat, she said.
“The difference between now and when the hospital filed for bankruptcy is that we’re hopeful for the first time in a long time that progress can be made,” Tracy said.
The union was concerned that the hospital would reject its contract altogether if it didn’t agree to temporarily continue the concessions, Tracy said. “If they’re going to make it, they need cash and a few months to get a leg up to be successful,” she said.
“The employees are definitely going to cast their lot with management. The new administration has made some positive changes that we can see,” Tracy said. A new president and new chief financial officer took over St. Mary’s last summer.
A recent report by the court-appointed patient care ombudsman agreed.
“There are no issues at this time with regard to maintaining quality of care provided by St. Mary’s Hospital,” the ombudsman, Daniel T. McMurray, said in court documents.
A hearing on the sale of St. Mary’s former hospital site at 211 Pennington Ave. will be held on Dec. 8.
On Dec. 9, St. Mary’s will hold a public meeting to discuss hospital finances, future plans, services and community benefit programs. It will begin at 5:30 p.m. at the hospital, located at 350 Boulevard.
A hearing on the hospital’s Chapter 11 disclosure statement will be held Dec. 18.
The 114-year old St. Mary’s is the sole survivor of Passaic’s three hospitals.