The Post Primary Teachers' Association is suing the Education Secretary over the error-plagued Novopay school payroll system.
Since the system was introduced in August last year, teachers have been underpaid, others have been overpaid and some not paid at all.
The system worth $100 million over 10 years was developed by Australian company Talent2.
The PPTA plans to file papers in the High Court in Wellington next week for a judicial review saying the Education Secretary has failed to undertake duties of office and provide a reliable payroll system, which is required by law.
Prime Minister John Key said the PPTA is free to take legal action although the Government is working to fix the problems with Novopay.
Peter Hughes is acting Education Secretary, following the resignation of Lesley Longstone in December last year.
Mr Hughes said the PPTA is entitled to take legal action and he respects that.
But he said he acknowledges the problems with Novopay have been very distressing for school staff and his office is working as hard and as fast as it can to fix them.