Login
Principal reprimanded for superannuation, PAYG failures
A principal who failed to pay a legal secretary her superannuation contributions and issue any group certificates for PAYG summaries has been found to have engaged in professional misconduct and ordered to undertake further education.
Digital
Lawsource principal Michael Rogers has been reprimanded for professional misconduct after the NSW Civil and Administrative Tribunal (NCAT) found that he had failed to make payments of the employer superannuation contributions and failed to issue any group certificates or PAYG summaries for an employment period.
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
The complainant, a legal secretary, worked at the firm from March 2013 through to November 2014 while it was under financial stress. While the superannuation entitlements were remedied, the payment of PAYG income tax instalments and the delivery of certificates evidencing payment have not yet been.
Mr Rogers said the delinquencies fell short of constituting professional misconduct because they “were not the result of malice or any deliberate policy to deprive either the complainant or the Australian Taxation Office (ATO) of their respective financial entitlements”, but were instead the result of “several [other] factors”.
These factors included an “incompetence where there should have been efficiency and procrastination where there should have been decisive action”, he said. It also came from the financial stress on the law practice caused by a reduction in work volumes, unanticipated expenses and an inability to raise a loan.
He admitted a “conscious decision” on his part to maintain the complainant’s employment even despite the practice’s cash-flow problems. His objective in doing so, he submitted, was to support her through a period of “personal difficulties” where her continued employment at the firm would be a benefit to her.
Mr Rogers said he has now restructured the law practice to reduce overheads, has refrained from taking a salary himself or a superannuation contribute from the practice and has resolved the superannuation shortfalls with the ATO.
NCAT found that the circumstances of his failure to ensure the payment of the complainant’s superannuation entitlements may well “place it towards the less serious end of the scale” of professional misconduct but, nevertheless, it still amounts to professional misconduct rather than unsatisfactory professional conduct.
“The respondent’s failures were a conscious effort in robbing Peter (in the persons of the complainant and the Australian Taxation Office) to pay Paul (in those of the law practice’s suppliers and other business creditors). The failures were deliberate and systematic, even though their motivation may have been to remedy the consequences of mismanagement rather than personal gain,” NCAT found.
The entire judgement can be found on AustLII and JADE: Council of the Law Society of New South Wales v Rodgers [2021] NSWCATOD 124 (25 August 2021).
