Wednesday, October 8, 2025

Public hospital psychiatrists to receive 20% pay rise after winning dispute with NSW Health

State’s Industrial Relations Commission hands down decision after 200 doctors threatened to resign in January

Public hospital psychiatrists to receive 20% pay rise after winning dispute with NSW Health

The New South Wales Industrial Relations Commission has handed down a decision finding that the state’s psychiatrists should receive a 20% pay increase.

The case comes after 200 psychiatrists threatened to resign in January, saying it was not about the money but being unable to continue working in a system causing them moral injury, knowing they were providing substandard care to their patients when one in three permanent psychiatrists positions were vacant.

The doctors’ union, the Australian Salaried Medical Officers’ Federation (Asmof), representing the psychiatrists against NSW Health, argued the special levy was necessary to avoid the “collapse” of psychiatric care in the state.

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On Friday, before a full audience of psychiatrists nervously awaiting the outcome, Justice David Chin announced that a special case had been made out justifying the payment of a temporary allowance to attract and retain psychiatrists.

Chin acknowledged the shortage of psychiatry staff specialists was causing a deterioration of mental health care in the public system and the working conditions of psychiatrists, and that their comparative low pay to other states was contributing to the shortage.

Chin said the psychiatrists would receive a “combined interim uplift of 20% for period of 12 months”.

He said this was a “discrete stop-gap measure” applicable to the one group of specialist doctors, noting “restraint is warranted given the potential for overlap” with the pending arbitration for a salary increase for all public doctors across the state.

He said the psychiatrist’s increase included the 10% abnormal duties allowance they have been paid since 3 February, and the increase would be absorbed into any subsequent salary increases determined by the commission.

Chin said the commission does not intend to grant Asmof’s other claims brought in the case.

In response to the resignation threats, the state’s mental health minister, Rose Jackson, had submitted a request to the IRC to urgently arbitrate the dispute and said the government would accept its decision.

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Hearings were supposed to take place across a single week in March but issues raised by NSW Health about expert evidence provided by the doctors’ union, and Asmof’s statewide industrial action, delayed them. They concluded in late June.

Since January 75 psychiatrists have resigned, while many deferred their resignations to await the IRC decision.

Chin said the allowance was granted “not to reward Asmof’s industrial strategy in facilitating mass resignations” but because a special case has been set out, and it was necessary to separate the two.

Speaking outside court, the Asmof executive director, Andrew Holland, welcomed the “historic decision” handed down by the IRC.

However, Holland reiterated that the resignations were not a coordinated strategy from the union but the decision of doctors themselves who were frustrated by the inaction of government, as the evidence they presented in court “made it very clear”.

Dr Ian Korbel, a psychiatrist and Asmof councillor, said “none of us thought we would be here a year ago. We thought, perhaps naively, that we’d be able to negotiate with government, that we’d be able to sit at the table and point out what was found today, which is that the public health sector is struggling in the psychiatric area.”

Korbel said this was “not a victory speech but a call to action” as further investment is needed in the system itself – particularly community mental health, as well as in housing for people with mental illness.

Korbel said these improvements in the system are what’s “vital” to retain and recruit psychiatrists, so they can feel they are making a difference, as opposed to currently experiencing moral injury knowing when they discharge patients there is no community team to follow them up properly.

Dr Pramudie Gunaratne, the chair of the Royal Australian and New Zealand College of Psychiatrists NSW branch, said tendering their resignations was a “harrowing” decision for psychiatrists but the mental health system “has gone from buckling to broken”.

She agreed larger reforms need to follow as 58,000 patients with complex mental health conditions can’t access the care they need.

Jackson said the government welcomed the decision of the IRC as a “positive resolution” and will be implementing the findings.

Jackson said the government was “already leaning into ways to bring [psychiatrists] back in” and was open to wider reforms in mental healthcare.

“For me, the focus now is all about the patients,” Jackson said.

Sarah Logan, who relies on the public health system for help managing bipolar disorder, said she is one of many patients for whom it has been a “very difficult year” worrying about what will happen if they need to present to hospital amid the shortages of psychiatrists.

While the government has relied on temporary locum doctors to fill shortages, Logan said the lack of continuity of care impacts patients.

“I was very concerned and worried about what the outcome would be for me, or for my for anybody else that is needing care during this year, when this crisis has been going on.”

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