Whitehorse General Hospital and its staff are heading to conciliation after the workers rejected the employer's most recent contract offer.

A press release issued Monday afternoon from the Professional Institute of the Public Service of Canada, the union which represents the hospital's registered nurses, pharmacists, physiotherapists, dietitians and other health care workers, said the negotiations broke off after the union members voted on an offer from the hospital's management.

The press release says the union took the hospital's last offer, a 10.6-per-cent salary increase over four years, to its members to vote on.

''The vote to reject was overwhelming. There is absolutely no doubt in my mind that the hospital's insistence on a four-year term is the reason for rejection,'' the union's regional representative, James Bart of Edmonton, said in the release.

Bart was not available today for further comment.

The press release said the union does not have a problem with the size of the wage increase, just the number of years the hospital wanted to spread the raises over.

The defeat of the offer does not mean the process has died.

Ron Browne, the hospital's chief executive officer, said today the next step is conciliation.

In conciliation, the two sides argue their cases before a conciliator. From there, the conciliator puts together a contract.

Then the two sides decide whether they want to accept the conciliator's package.

If one side does not accept the conciliator's proposal, then a strike may be a possibility.

But Browne doesn't think it will get that far.

The CEO said the deal which expired Jan. 31 of this year was reached through conciliation.

He believes, going into conciliation again, that the two sides can agree on a deal through this process and avoid any job action.

In the press release, the union blames the territorial government, which funds the hospital, for trying to get the same kind of deal it has with other unions.

The Yukon Party government has mainly agreed on four-year deals with its various employee groups, which the Public Institute does not want for its members.

But Brown said that while the hospital is funded by the government, it gets no direction on how to negotiate with its union.

'We're the one's negotiating the agreement,' said Brown.

The hospital looks at other organizations outside of the Yukon plus unions within the territory and the deals that have been struck. He noted most of the Yukon's public service unions are now under four-year deals.

Health and Social Services Minister Peter Jenkins noted Monday the precedent for contract length has already been set with the different four-year deals.