A legal action taken by hospital consultants against the Ministers for Health and Finance, and the HSE, over a breach of contract has been settled.

As a result of this, around 2,500 consultants can look forward to pay increases that are expected to cost the State some €200 million in retrospective payments. Meanwhile, the annual consultant pay bill is also expected to increase by around €60million.

According to the Irish Medical Organisation (IMO), the case was taken in relation to ‘the unilateral breach of the 2008 Consultant Contract'.

"This has been a particularly divisive issue for the health services in Ireland. Consultants were effectively forced by Government to go to court to challenge the unilateral breaching of their contracts by the State, the same contract which the State itself had negotiated over a prolonged period of time," it noted.

Furthermore, while it welcomed the settlement, the IMO expressed its disappointment that it failed to include consultants who were hired by the HSE after 2012.

"These consultants continue to suffer from the negative impact of the 30% cut to consultants appointed since 2012. These doctors are the only group in the public service who have been discriminated against to this degree.

"Nobody should be in any doubt that the State's continued failure to deal with this issue is directly encouraging our young doctors to leave Ireland and practice their skills abroad in health services that value them and do not actively discriminate against them," the IMO insisted.

It said that this discrimination is driving the increasing number of vacant consultant posts in Ireland, which is currently at around 450.

"The IMO will continue to pursue a solution to this injustice such that colleagues doing the same job with the same qualifications and responsibilities should get the same rate of pay. The current position is simply unsustainable," the organisation said.

It added that following this settlement, it hopes that from now on, the State ‘will honour all contracts agreed with doctors and will work effectively to regain the trust of their employees'.

The news was also welcomed by the Irish Hospital Consultants Association (IHCA), which described it as ‘an important and essential development in order to ensure the delivery of high quality care to patients in the public health service'.

IHCA president, Dr Tom Ryan, emphasised that acute hospitals and mental health services are struggling to recruit and retain consultants.

"Data from the Public Appointments Service for recent years confirm that about a quarter of the advertised consultant posts failed to attract a single suitable applicant and about one-third of the advertised consultant posts failed to fill," he noted.

He added that this settlement ‘is a first significant step in restoring trust between consultants and health sector employers'.

"However it is now essential that the discrimination against new entrant consultants is ended without delay, as Ireland is no longer competitive in the global marketplace for talented doctors," Dr Ryan added.