Five lecturers at Ashworth hospital, Merseyside, have become the first members of lecturers' union Natfhe to win a case for unfair dismissal at arbitration.
FE Focus revealed earlier this year that the lecturers opted for arbitration as a less costly and legalistic alternative to tribunal.
However, six part-time staff at Ashworth, one of three secure institutions in England for the mentally disturbed, had their claim rejected.
The case arose when Ashworth Hospital Authority became their employer instead of the local education authority. The hospital wanted to abandon national pay and conditions and impose its own. A major cause of the dispute was Ashworth's assumption that lecturers' standard holiday entitlement should shrink from 70 days to 20, though with an individual long-service allowance.
In October 2001, Ashworth announced proposals to dismiss all the lecturers then re-engage them on its own terms.
At arbitration it was made clear that they could apply for reinstatement or compensation, but not both.
The five who won their case were each awarded pound;1,652 for loss of holiday entitlement spanning a year and seven weeks. The arbitrator, Professor Roy Lewis, found in their favour because the hospital "was not prepared to engage in any meaningful consultation".
"That failure rendered dismissals of applicants deprived of their valuable Silver Book holiday entitlement unfair," he said.
Natfhe north-west regional organiser Colin Gledhill said: "We're satisfied the experience has played a part in improving industrial relations. We're pleased that the current management, Mersey Care NHS Trust, has been willing to go down the less confrontational route."
Arbitration has been available since 2001 but can only be used in unfair dismissal cases, and both parties must agree to it.