❓ Hon Barbara Scott questions the Health Department regarding the costs associated with terminating private employees at Kaleeya Hospital and the run-off insurance cover. The response details the financial breakdown and a dispute that arose, leading to a revised capped sum.
AnsweredQoN 3446Legislative Council
QuestionView source ↗
(1) Did the costs of terminating the private employees at Kaleeya Hospital and the run-off insurance cover exceed $1.5 million?
(2) What amount was paid by the Health Department of Western Australia to the vendor for these costs?
(2) What amount was paid by the Health Department of Western Australia to the vendor for these costs?
AnswerView source ↗
Answered
30 May 2006
Responded by
Parliamentary Secretary representing the Minister for Health
Response time
27 days
The Letter Agreement for the purchase of Kaleeya provided the Purchase Price for Kaleeya included a capped sum of $1.5M (being the estimated cost to Kaleeya of terminating staff and of the State assuming liability for entitlements of transferring employees plus insurance run off cover). The amount payable by the State (in reimbursement to Kaleeya) to terminate staff AND liabilities (actual and contingent) to be assumed by the State for transferring staff and the amount for insurance run off cover totalled $1,633,547.40 (allocated as to $627,562.57 for accrued employee entitlements, $538,648.42 for contingent entitlements to be assumed by the State and $467,336 for insurance run off cover). A dispute arose between Kaleeya and the State as to what was intended in connection with the assumption of liability by the State for certain contingent employee entitlements. Kaleeya maintained that the Letter Agreement only entitled the State to a credit (towards the $1.5M) for a discounted amount for sick leave and non?accrued LSL, rather than the full face value of these entitlements. The full face value of these contingent entitlements was $482,440.54 (apportioned as to $113,782.48 for non accrued LSL and $368,658.06 for sick leave). Given the significant amount of the contingent liabilities in dispute a compromise agreement was reached. It was agreed to increase the capped sum of $1.5M to a capped sum of $1,633,547.40. Of the revised capped sum of $1,633,547.40 the State: · paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
The amount payable by the State (in reimbursement to Kaleeya) to terminate staff AND liabilities (actual and contingent) to be assumed by the State for transferring staff and the amount for insurance run off cover totalled $1,633,547.40 (allocated as to $627,562.57 for accrued employee entitlements, $538,648.42 for contingent entitlements to be assumed by the State and $467,336 for insurance run off cover). A dispute arose between Kaleeya and the State as to what was intended in connection with the assumption of liability by the State for certain contingent employee entitlements. Kaleeya maintained that the Letter Agreement only entitled the State to a credit (towards the $1.5M) for a discounted amount for sick leave and non?accrued LSL, rather than the full face value of these entitlements. The full face value of these contingent entitlements was $482,440.54 (apportioned as to $113,782.48 for non accrued LSL and $368,658.06 for sick leave). Given the significant amount of the contingent liabilities in dispute a compromise agreement was reached. It was agreed to increase the capped sum of $1.5M to a capped sum of $1,633,547.40. Of the revised capped sum of $1,633,547.40 the State: · paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
A dispute arose between Kaleeya and the State as to what was intended in connection with the assumption of liability by the State for certain contingent employee entitlements. Kaleeya maintained that the Letter Agreement only entitled the State to a credit (towards the $1.5M) for a discounted amount for sick leave and non?accrued LSL, rather than the full face value of these entitlements. The full face value of these contingent entitlements was $482,440.54 (apportioned as to $113,782.48 for non accrued LSL and $368,658.06 for sick leave). Given the significant amount of the contingent liabilities in dispute a compromise agreement was reached. It was agreed to increase the capped sum of $1.5M to a capped sum of $1,633,547.40. Of the revised capped sum of $1,633,547.40 the State: · paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
Kaleeya maintained that the Letter Agreement only entitled the State to a credit (towards the $1.5M) for a discounted amount for sick leave and non?accrued LSL, rather than the full face value of these entitlements. The full face value of these contingent entitlements was $482,440.54 (apportioned as to $113,782.48 for non accrued LSL and $368,658.06 for sick leave). Given the significant amount of the contingent liabilities in dispute a compromise agreement was reached. It was agreed to increase the capped sum of $1.5M to a capped sum of $1,633,547.40. Of the revised capped sum of $1,633,547.40 the State: · paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
Given the significant amount of the contingent liabilities in dispute a compromise agreement was reached. It was agreed to increase the capped sum of $1.5M to a capped sum of $1,633,547.40. Of the revised capped sum of $1,633,547.40 the State: · paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
Of the revised capped sum of $1,633,547.40 the State: · paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
· paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
· paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
· assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
(2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
The amount payable by the State (in reimbursement to Kaleeya) to terminate staff AND liabilities (actual and contingent) to be assumed by the State for transferring staff and the amount for insurance run off cover totalled $1,633,547.40 (allocated as to $627,562.57 for accrued employee entitlements, $538,648.42 for contingent entitlements to be assumed by the State and $467,336 for insurance run off cover). A dispute arose between Kaleeya and the State as to what was intended in connection with the assumption of liability by the State for certain contingent employee entitlements. Kaleeya maintained that the Letter Agreement only entitled the State to a credit (towards the $1.5M) for a discounted amount for sick leave and non?accrued LSL, rather than the full face value of these entitlements. The full face value of these contingent entitlements was $482,440.54 (apportioned as to $113,782.48 for non accrued LSL and $368,658.06 for sick leave). Given the significant amount of the contingent liabilities in dispute a compromise agreement was reached. It was agreed to increase the capped sum of $1.5M to a capped sum of $1,633,547.40. Of the revised capped sum of $1,633,547.40 the State: · paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
A dispute arose between Kaleeya and the State as to what was intended in connection with the assumption of liability by the State for certain contingent employee entitlements. Kaleeya maintained that the Letter Agreement only entitled the State to a credit (towards the $1.5M) for a discounted amount for sick leave and non?accrued LSL, rather than the full face value of these entitlements. The full face value of these contingent entitlements was $482,440.54 (apportioned as to $113,782.48 for non accrued LSL and $368,658.06 for sick leave). Given the significant amount of the contingent liabilities in dispute a compromise agreement was reached. It was agreed to increase the capped sum of $1.5M to a capped sum of $1,633,547.40. Of the revised capped sum of $1,633,547.40 the State: · paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
Kaleeya maintained that the Letter Agreement only entitled the State to a credit (towards the $1.5M) for a discounted amount for sick leave and non?accrued LSL, rather than the full face value of these entitlements. The full face value of these contingent entitlements was $482,440.54 (apportioned as to $113,782.48 for non accrued LSL and $368,658.06 for sick leave). Given the significant amount of the contingent liabilities in dispute a compromise agreement was reached. It was agreed to increase the capped sum of $1.5M to a capped sum of $1,633,547.40. Of the revised capped sum of $1,633,547.40 the State: · paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
Given the significant amount of the contingent liabilities in dispute a compromise agreement was reached. It was agreed to increase the capped sum of $1.5M to a capped sum of $1,633,547.40. Of the revised capped sum of $1,633,547.40 the State: · paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
Of the revised capped sum of $1,633,547.40 the State: · paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
· paid Kaleeya (by way of reimbursement) the sum of $203,805.50 (ie the amount paid by Kaleeya to terminating staff); · paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
· paid to Kaleeya the sum of $467,336 for insurance run-off cover; and · assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
· assumed liabilities of $962,405.49 (actual liabilities in the sum of $423,757.07 and contingent liabilities in the sum of $538,648.42, of which $368,658.06 was for sick leave and $113,782.48 for non accrued LSL). (2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
(2) The amount actually paid to Kaleeya (as distinct from an actual or contingent liability assumed by the State for transferring staff) was $671,141.50 plus GST.
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