Batley and Spen MP Tracy Brabin had previously called on former health secretary Jeremy Hunt to reject Mid Yorkshire Hospitals NHS Trust’s plans to create a wholly-owned subsidiary (WOS) for around 900 non-medical staff.
Critics of the plans, which have been implemented elsewhere in Yorkshire, say they puts workers’ rights at risk.
Public sector union Unison dropped plans for a three-day strike when Mid Yorkshire announced it would cease all work on the formation of the WOS.
Ms Brabin said: “This is a victory for the hard-working staff at Mid Yorks who have a right to keep their status as NHS employees and it is a victory for the principles of our NHS.
“I am delighted that the trust has recognised the strength of opposition to the plans and have come to a decision that will safeguard our NHS for both staff and patients.
“While I realise that Mid Yorks are under incredible pressure to cut-costs as the Tory Government continues to underfund local NHS services, it cannot come at the expense of workers’ rights.
“Under no circumstances should NHS staff be facing a future where the terms and conditions of their employment are inferior to that of their colleagues.
“This victory sends a clear message in the NHS’ 70th year that we reject the path to privatisation and will continue to fight for a properly funded health service that is publicly owned and free at the point of use.”
Cleaners, IT specialists and maintenance workers were among those who could have been affected at Mid Yorkshire, which runs hospitals in Wakefield, Dewsbury and Pontefract. On Monday, Mark Bradon, director of estates, facilities and IMT at the Trust, thanked staff for continuing to provide a “quality service to patients” during the period of uncertainty.