Law firm employees denied $290k in superannuation contributions

Employees of a Queensland law firm were deprived of almost $300,000 in superannuation contributions.

Michael William Kemp, owner of Kemp Law, was found to have seriously breached his legal obligations by failing to make $291,572 in compulsory superannuation contributions for six employees.

One of the employees was robbed of $37,143 in superannuation contributions during the three years he worked for Kemp Law.

Queensland Civil and Administrative Tribunal’s Justice Paul Freeburn said the offending was more serious than tax offences because the entitlements were the “property of the employees”.

“The consequence is that, by failing to remit those funds, the legal practitioner/employer is, in effect, converting the money that ought properly go to the credit of the employees into funds available for the use of the practice,” Justice Freeburn said in his written reasons.

The offending was categorised as professional misconduct.

Justice Freeburn recommended that Kemp’s name be removed from the roll of practitioners and ordered that he be publicly reprimanded.

An employee was also awarded a compensation order for $7,500, under half of the $15,319 superannuation payments taken by Kemp.

While Justice Freeburn said it was in the interests of justice that the compensation order be made, he noted Kemp’s legal practices are in liquidation, and so there may be “no utility” in it being made.

“The failure to pay those amounts, or to cause those payments to be made, was a breach of Kemp’s legal obligations in connection with his practice as a solicitor,” Justice Freeburn said.

“They are serious breaches that fall short, to a substantial degree, of the standard of professional conduct that would be expected from competent members of the profession of good repute.”

In March, the Australian Taxation Office disclosed a number of failures within law firms and had raised $28 million just by securing practitioners’ overdue lodgements and omitted income.

The ATO also found that 85 per cent of lawyers did not lodge returns.

Legal practitioners may be found unfit to practice and could be struck off if prosecuted, the ATO warned.