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The Ministry of Business, Innovation and Employment has revealed the Ministry of Education could be fined for failing to pay school staff on time as a result of the bungled new Novopay payroll system.
Patience is wearing very thin for many school principals and administrators, as the fifth pay cycle occurred yesterday and problems with the new $30 million Novopay payroll system continue.
Many Otago schools have begun paying teachers' wages out of their own funds in the wake of the Novopay problem, which has left many teachers and support staff without regular salary payments.
A Ministry of Business, Innovation and Employment spokeswoman said the Wages Protection Act 1983 stated employees should be paid on the day, and at the intervals, that have been agreed with the employer.
Employers could not change the normal pay day without the agreement of the employee, the spokeswoman said.
There are financial penalties for not complying with employment laws, of up to $10,000 for individuals and $20,000 for companies.
"Section 3 of the Wages Protection Act states `this Act shall bind the Crown'.
"So yes, the Act, including the penalty provisions, apply to government departments."
In respect to any employment dispute, the Ministry of Business, Innovation and Employment provided a range of services and support to employers and employees, she said.
"Whether penalty provisions are utilised will depend on the facts of each case.
"In many cases, achieving the right outcome will not require the use of penalties."
Otago Primary Principals' Association president Brent Caldwell declined to comment at this stage, but a New Zealand Educational Institute spokeswoman said many schools would not rule out using the legal option.
"Taking legal action is a backstop.
"We're not ruling it out, but because legal action is time-consuming and expensive, our first priority is to try to get the issues resolved.
"The Ministry of Education needs to be aware that schools are facing a lot of time and money dealing with the system.
"Ultimately, it will be up to boards of trustees as to whether or not they take legal action."
Otago Secondary Principals' Association president Brent Russell said the problem was that there was no turning back.
"This system is here whether we like it or not."