The Federal Court has imposed a penalty of $1 million on Cotton On Kids Pty Ltd for breaching fire safety standards in its supply of children’s nightwear.
Cotton On Kids breached mandatory product safety standards by supplying highly flammable nightdresses and pyjamas. It was fined $400,000 for supplying non-compliant nightdresses and $400,000 for supplying non-compliant pyjamas. Moreover, it had engaged in misrepresentations by labelling the nightdresses and pyjamas as being “low fire danger” and was fined $200,000 for this breach. These penalties are the highest imposed against a company for breaches of a mandatory product safety standard.
In imposing these significant penalties, Justice Tracey emphasised that the potential consequences of non-compliance with the standards were most serious. Moreover, the garments were intended to be worn by children, who were a particularly vulnerable class of consumers.
The Court also ordered that Cotton On Kids and Cotton On be banned for four years from selling children’s nightwear unless written evidence from accredited fire-safety testers is provided beforehand. Additionally, both companies are required to establish compliance programs for three years at their own expense. The directors face imprisonment if they fail to comply with these orders.