Canberra Health Services has backed down from its move to outsource certain roles and services in the fetal medicine unit at the Centenary Hospital for Women and Children.
The Community and Public Sector Union said authorities had confirmed the tender for four specialists and ultrasound services would not proceed.
The union had lodged a formal dispute with Canberra Health Services over the matter. CPSU ACT acting secretary Brenton Higgins welcomed the decision to stop the outsource.
"The fetal medicine unit is an essential service for people and families with complex or high-risk pregnancies and we are glad it will continue to be delivered by the public health system," he said.
"The CPSU welcomes CHS's decision to halt the tender process and their commitment to work with relevant unions to find a solution that ensures vital public health services are not outsourced."
The government and authorities had previously rejected the roles were being outsourced and had said it was necessary as previous attempts to hire for the specialists had failed.
The fetal medicine unit at the hospital lost its training accreditation from the Royal Australian and New Zealand College of Obstetricians and Gynaecologists last August due to specialist shortfalls.
A spokeswoman from Canberra Health Services said additional specialists are set to start in the unit in the coming weeks.
However, these specialists won't be starting in a permanent capacity.
"These specialists will contribute to the provision of the service for the foreseeable future while we continue permanent recruitment activities to ensure the service is sustainable in the longer term," the spokeswoman said.
The spokeswoman said authorities had not considered other options and this was highlighted during a consultation.
"Through the tender process and working with out teams, there has been some constructive feedback on other options that may not have been considered."
The situation within the unit has been described as dire by those familiar with the unit. More staff have indicated they would resign from the unit and others have taken extended leave.
Staff shortages within the unit have meant the hospital has been unable to formally report on all ultrasounds in a timely manner and previous work has been outsourced to a Sydney specialist.
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