7 Mar 2016

Ministry's 'significant' payroll blunder

8:47 pm on 7 March 2016

A payroll problem at the Ministry of Business, Innovation and Employment (MBIE) could go back more than a decade and cost the Ministry a 'significant' amount.

Ministry of Business, Innovation and Employment

Ministry of Business, Innovation and Employment Photo: RNZ / Alexander Robertson

MBIE said there has been problems relating to holiday pay and leave in recent years and it now believed there could be an underlying problem in the system.

"We have established a project team to identify the issues and develop a solution. At present this work is in its initial phase, and there appear to be a range of payroll related issues," said MBIE's chief financial officer Stewart McRobie.

"We are mindful that this situation creates uncertainty for employees and we are working to identify and resolve the issues as quickly as possible, and to implement a sustainable solution for the future," he said.

The minister in charge of the department, Steven Joyce, said the initial indications showed a significant number of the 3000 employees could be affected.

"On an individual employee basis I understand that the issues are comparatively minor, they're not going to be too significant, but of course over that amount of time and with a significant staff, that may add up to a significant amount of money for the ministry," he said.

Mr Joyce added that it was still to soon to know all the facts.

The Economic Development Minister said this problem was entirely different to the error-ridden school pay system, Novapay, which he was tasked to fix in 2013.

"[The MBIE payroll problem] is much more contained than that, but nevertheless needs to be solved and certainly from my perspective, MBIE needs to solve it as quickly as possible," he said.

MBIE said it was discussing these issues with the Public Sector Association (PSA) and the Labour Inspectorate.