More than half of NHS Direct staff face being made redundant or losing their NHS terms and conditions after a failure to reach agreement on their transfer to non NHS providers of the new 111 urgent phone service.

The non-emergency telephone number is due to replace NHS Direct’s 0845 number from March next year. NHS Direct won more NHS 111 contracts than any other provider but will only be covering a third of the country.

Contracts in other areas have been won by a mixture of NHS ambulance trusts and independent sector GP out of hours providers.

Around 750 nurse adviser and call handler posts will be put at risk.

In an email sent to staff this morning, chief executive Nick Chapman said staff transfers to ambulance trusts which had won 111 contracts would go ahead but “movement of staff to non-NHS providers (such as GP out-of-hours providers) have encountered legal problems relating to the protection of employment rights”.

He told staff management had sought “a resolution of these problems with the Department of Health but have not been able to find one”.

Mr Chapman added: “The position which I can now confirm is that the movement of staff in the areas won by non-NHS providers will proceed now on a volunteers-only basis.”

This means staff will lose their NHS pensions and other terms and conditions.

NHS Direct estimated decommissioning costs for 0845 would be £144m in a worst case scenario where all staff had to be made redundant. The board had hoped most of this would be avoided through the transfer of staff under Cabinet Office Guidelines which protect terms and conditions.

Unison called for the DH to take action to resolve the issue. A formal consultation with staff at risk of redundancy will begin on 3 December.