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New Zealand - Talent2’s failing payroll system to remain in place

09 May 2013

The New Zealand government announced that it will be retaining the Novopay system provided by Talent2 to payroll teachers throughout the country despite ongoing problems.

Economic Development Minister, Steven Joyce, announced he would be sticking with Novopay for now, and that it "wouldn't be sensible" to ditch it at this stage. However, at the same time he is overseeing an inquiry into Novopay scheduled to be concluded at the end of this month, and says there will be a "day of reckoning" for Talent2.

Talent2 won a 10-year contract worth AUD 105 million to implement New Zealand's public education payroll service. Originally, the system was supposed to go live in May 2010 but was delayed until August 2012. Since that time, the payroll has been beset with multiple problems including over 8,000 teachers receiving the wrong pay and in some cases no pay at all. Penalty clauses in its contract are likely to be invoked in compensation and Talent2 has already committed significant unplanned resource to try and placate angry educational workers.

By February 2013, it was reported that over 14,000 teachers and school support staff were owed nearly AUD 12 million in backpay while, at the same time, more than AUD 600,000 had been overpaid to teachers. According to local media reports, the latest pay run delivered the lowest number of mistakes to date, with only 166 schools affected, but there is still a backlog of 25,000 errors to deal with. 

The so called ‘Novopay scandal’ has been a prominent feature of New Zealand politics for the past eight months and has already led to the resignation of Education Secretary, Leslie Longstone.

Opposition Labour party leader David Shearer says the inquiry into Novopay should expose who was responsible for making it live when it wasn't ready. He said, "We need to know, and the people of New Zealand need to know which minister signed this off, on what basis, on what information did they have in front of them. Let's face it – if you're going to push the green go button before the Novopay is ready to roll out, then whose fault is that?"

Having already spent AUD 17 million more than it budgeted for Novopay, Mr Shearer has also called for the Government to pressure Talent2 to cover some of the cost of fixing it.

In a statement on its website, the Company said, “Talent2 apologises for the inconvenience that payment disruptions and inaccuracies have had on New Zealand teachers, principals, support staff, and their respective schools as they have transitioned from the incumbent legacy system to the new Novopay solution. Talent2, together with the Ministry, have been working around the clock to resolve the issues surrounding this complex transition, and we are both dedicated to providing extra support as required. We are genuinely sorry for the stress that this has caused the education sector and we are confident we can resolve the issues”.

Talent2 claims to be the number one provider of payroll solutions in Asia Pacific delivering complex payroll solutions for clients in over 30 countries, with a specialism in the government sector. In September 2012, the Company delisted from the Australian stock exchange and sold 50% of its shares to large US recruiter, Allegis.

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