The Post Primary Teachers' Association is launching legal action over Novopay.
PTTA president Angela Roberts said the association would seek compensation for members for the hurt, humiliation and financial suffering caused by the "dysfunctional" payroll system.
The union's national executives met at the weekend and decided to take collective legal action on behalf of members.
Because of the complexity of the case, the association was looking at a number of legal options, Roberts said.
"It is an unusual situation in that traditionally any action would be taken against a school's board as the employer, but in this case the boards are just as frustrated with Novopay as their staff,'' Roberts said.
PPTA was collecting data, preparing witness statements and discussing the case with its lawyers.
Novopay has consistently failed to pay all school staff correctly and on time, since being launched in August.
''Despite reassuring noises made by government representatives, as late in the piece as yesterday there were still no definite plans to roll out a resourced survival package for affected schools and their employees,'' Roberts said.
''In the face of this, and growing pressure from struggling members, PPTA has decided to take matters into its own hands.
"Members' patience and goodwill has all but run out. Continued Novopay errors mean schools, students, principals and administration staff are at the end of their tether."
Templeton Primary School principal Peter Bradley said the legal action was ''courageous''.
Bradley is a member of NZEI, another union, but he too has had problems with Novopay.
His staff have been not paid, underpaid and overpaid, as well as experiencing various issues with holiday pay.
"I think it is a courageous action,'' he said.
"Novopay is a serious situation.''
Bradley said he had not heard about any legal action over Novopay planned with NZEI.
Hornby Primary School principal Gary Roberts said he fully understood the PPTA's stance.
"I think it is interesting and I can certainly understand why they would be looking to take legal action,'' he said.
"If this happened in another sector, I think we may have seen movement before now.''
Hornby staff had also been through the mill with Novopay.
Staff had been underpaid, overpaid and paid ''ridiculous'' amounts that did not correlate to their wages, Roberts said.
"This Novopay system is an absolute debacle. It is putting increasing pressure on schools and administration staff. I have no confidence in it.''
Minister Steven Joyce has taken the helm of Novopay, to try to resolve ongoing issues that include not paying child support payments, students loans or Kiwi Saver.
Joyce said Novopay provider Talent2 was planning three software upgrades.
One took place over the weekend and the next two would happen in March and April.
Those were designed to address ''the most significant bugs in the system'', he said.
- The Press
Should schools be using dogs to detect drugs?Related story: Demand rises for drug dogs at schools