A law firm that failed to pay its superannuation obligations to employees over three years has been fined $7000.
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The ACT Civil and Administrative Tribunal fined the firm, known in documents only as "N and Co", $7000 and ordered its principal to undertake an ethics and practice management course within 12 months.
But the tribunal stopped short of finding the misconduct brought his suitability for legal services into question, instead determining the issues were mostly related to personal conduct.
The case was brought to the tribunal after a former employee found he had only been paid his superannuation entitlements twice over three years working at the firm.
A subsequent Australian Taxation Office audit found the firm had paid employees only 35 per cent of the required superannuation entitlements between 2009 and 2012, ordering it to pay almost $136,000 in requirements, plus interest.
The tribunal heard the partner had told some staff of cash flow problems and non-payment of superannuation in mid-2010, but the former employee was not among those advised.
The partner said he was concerned about the effect his financial difficulties would have on his practice and, due to a "strained relationship" with the former employee, "erred on the side of safety in the belief that advising [the employee] of the non-payment may cause unrest within the office".
"The respondent suffered financial difficulties both due to a matrimonial break down in 2005 and significant cash flow difficulties with his firm during the period 2009 to 2012," Senior Member Peta Spender said in her tribunal decision.
"The respondent is apologetic, remorseful and embarrassed by his conduct."
The partner also told the tribunal there had been no terminations or redundancies during the period of financial difficulty, showing concern about "maintaining the jobs of his employees".
All obligations were paid by July 2013, including the $28,816.29 owed to the former employee.
However, before the ATO audit, the partner did not respond to a letter from his former employee detailing the apparent non-payment and asking for records of transactions made to the nominated superannuation fund.
"Although he found himself in a very difficult financial situation he was not sufficiently frank about the superannuation payments with his employees," Professor Spender said.
"The respondent did not do all that he reasonably could to satisfy his statutory obligations ... therefore the imposition of a fine is appropriate."
Both the Law Council of the ACT and the former employee agreed the misconduct was at the lower end of the spectrum.
The firm was fined $7000 and ordered to pay the applicant's tribunal costs, with the partner ordered to take an approved course in ethics and another in practice management within 12 months.
