Ousted lab refuses to help rival find staff

By Martin Johnston

Auckland's dumped community laboratory provider has rejected an appeal to help its replacement hire staff.

Diagnostic Medlab (DML) will instead stick to what it says is the letter of its soon-to-end contract with the region's district health boards - a move that lifts the stakes in the switch of the 10,000-patient-a-day operation to Labtests Auckland.

DML chief executive Arthur Morris said yesterday that after the Supreme Court last month halted his company's legal action against the DHBs' contract with Labtests, the health boards asked for his help in the transition.

"They wanted facilitated access to our staff and access to the collection network.

"The suggestion was made that they [our staff] might be able to have laboratory tours at the Labtests site to get familiar with Labtests and what they are about. Our response was they have plenty of avenues to recruit staff on the web and in newspapers etc, and Labtests would have to rely on that. It was unreasonable for Labtests to have access to our staff."

Labtests has said it wants to hire DML staff and has already appointed some, including senior pathologist Dr Richard Lloydd as medical director.

DML's contract ends on September 6; Labtests takes over the next day.

Dr Morris said he was awaiting a letter from the DHBs to explain their intentions for the transition but DML was obliged by its current contract to provide patient materials such as records and stored tissue samples only to a viable laboratory service provider.

He was prepared to enter talks on transferring this, but only once an obviously "full service" existed.

"Up till then, access to staff, the collection network and so on - that's setting up a laboratory. We have got no legal obligation to help Labtests in getting started from that point of view."

He said the restraint-of-trade provisions imposed on Dr Lloydd - he was still a DML employee but was now on three months' "gardening leave" - were normal for senior staff.

DHBs spokesman Geraint Martin said DML had specifically acknowledged in its contract that it was vital it co-operate with Labtests to smooth the transition. The company had agreed to work in good faith with the DHBs on this.

DML staff would be offered jobs at Labtests to coincide with the end of the DML contract, Mr Martin said.

"DML have a part to play in ensuring that they stick to their good faith with us. It's not for DML to decide when it will engage with the transition arrangements unilaterally. They have contractual obligations with us for transition. We will be holding them accountable for that ..."

Labtests opted not to comment on transition issues yesterday, but said it was meeting its timelines and would fulfil the contract's requirements.

Mr Martin clarified the price of the Labtests community lab contract, previously stated as $70 million a year. He said it was $66.9 million for the first year, compared with $72 million for DML now. Labtests, at no extra cost, will also do $1.8 million of work now done by the DHBs' own laboratories - producing total savings for the DHBs of $6.9 million.

- NZ Herald

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