Clothing company Cotton On has been fined $1 million for selling highly flammable children's pyjamas.
Cotton On Kids consented to orders in the Federal Court that it breached the Trade Practices Act by selling pyjamas that did not meet Australian standards and for mislabelling them as being of "low fire danger".
Australian Competition and Consumer Commission (ACCC) deputy chair Delia Rickard said the pyjamas and nightdresses were very dangerous.
"The nightwear was so flammable that they should not have been supplied in Australia at all," she said in a statement.
"To compound this, the highly flammable nightwear was misrepresented by being labelled 'low fire danger'." Federal Court judge Richard Tracey noted that the potential consequences of selling highly flammable children's nightwear were serious and warranted a substantial penalty.
The pyjamas were sold between September and December 2010 and Cotton On has recalled them.
The nightwear involved was the Nicki Short Sleeve White/Petal Spot Nightdress and the Girls Short Sleeve Burst Pyjamas Pea Green.
The ACCC urges any customers who bought these items to return them for a full refund if they had not done so.
The ACCC says Cotton On cooperated with its investigation.
However, Ms Rickard said this instance exposed serious deficiencies in the way Cotton On's senior managers checked the compliance of its products with Australian safety standards.
"These breaches were very serious as they placed the safety of young children at risk," she said.
"This case demonstrates that failure to comply with mandatory safety requirements can see a supplier end up in court and exposed to substantial penalties."