Avoid Costly Mistakes: what happens to non-compliant venues?

Running a successful venue in the NSW hospitality industry is no small feat, and staying compliant with alcohol licensing and food safety standards is critical. As a licensee, you’re responsible for ensuring that your venue meets its obligations. From steep fines to reputational damage, the penalties for non-compliance are severe.

Whether you’re a bar owner, restaurateur, or event organiser, understanding the risks of non-compliance is super important and is covered in Licensee Training.

What is Liquor & Gaming NSW approach to compliance?

Liquor & Gaming NSW is in charge of ensuring compliance with liquor and gaming laws within New South Wales. While most businesses comply, non-compliance, particularly serious or repeated breaches, results in enforcement actions to uphold community expectations and public safety.

While Liquor & Gaming NSW encourages self-regulation and voluntary compliance, they also apply escalating levels of enforcement action where non-compliance is detected. Factors such as the severity of violations, public safety, compliance history, and corrective actions taken by businesses influence the enforcement measures applied.

To investigate any potential non-compliance, Liquor & Gaming NSW employ inspectors who have a range of powers that allows them to enforce gaming and liquor laws:

• having free and unimpeded access to and search of licensed premises

• compelling persons to answer questions

• issuing formal demands for information or records

• seizing items for use as evidence.

Liquor & Gaming NSW inspectors and NSW Police officers may attend a licensed premises at any time or conduct unannounced compliance inspections at licensed premises.

Businesses may also receive notices to produce specific records or documents, such as CCTV footage, incident logs, and staff rosters, as part of investigations. Additionally, affected parties can share their side through voluntary interviews to provide mitigating factors or corrective actions taken.

What happens to non-compliant venues?

There are a range of enforcement options available to Liquor & Gaming NSW in dealing with non-compliance or allegations or non-compliance. These may include:

• education and engagement

• remedial actions

• official cautions and warnings

• penalty infringement notices

• prosecution

• administrative action, including:

  • disciplinary complaints

  • suspension or revocation of recognised competency cards

  • imposing licence conditions

  • issuing statutory directions.

Educate and engage

Liquor & Gaming NSW emphasizes education and engagement to foster a culture of compliance within the industry. This includes stakeholder engagement, training programs like the Tiered Industry Training Framework (covering RSA, Licensee, and Advanced Licensee training), and the promotion of good regulatory practices aligned with community expectations. They provide tools, guidance, and regular updates through their website, newsletters, and partnerships with industry bodies to support businesses in understanding their obligations and avoiding non-compliance.

Remedial action or official warnings

Liquor & Gaming NSW may take a remedial approach or issue official warnings to address low-risk offences or when education is more effective than enforcement. Remedial actions involve engaging with the licensee, conducting audits, or reviewing business records to ensure future compliance. Formal warnings may be issued in cases with mitigating factors or where penalties are deemed unnecessary. These warnings are recorded and may influence the handling of future offences if they occur.

Penalty notices

Under the Fines Act 1996, Liquor & Gaming NSW inspectors and NSW police officers can issue on-the-spot penalty notices for liquor and gaming offences. These notices are typically issued for more serious offences, when there are aggravating factors like a poor compliance history, or when it serves the public interest. Decisions to issue penalties are evidence-based, with the evidence needing to be both admissible and sufficient to prove an offence. Paying a penalty notice does not imply an admission of liability, and recipients have the option to request an internal review or contest the notice in court, as outlined on the notice itself.

Prosecution

Non-compliance involves a breach of the law, and Liquor & Gaming NSW determines the appropriate response for each detected instance. Prosecution is typically reserved for serious breaches or high-risk businesses and may also be pursued to create a general deterrent effect, encouraging industry-wide compliance. Decisions to prosecute follow departmental policies, and administrative actions may be taken alongside or instead of criminal proceedings, depending on the circumstances.

Administrative actions

Administrative actions by Liquor & Gaming NSW address ongoing compliance concerns and ensure industry accountability. These actions can include filing disciplinary complaints, imposing or modifying licence conditions, or issuing binding statutory directions to manage high-risk conduct or assess the suitability of licensees. Specific measures include restricting the sale of certain products or promotional activities under section 102 of the Liquor Act, issuing written directions to licensees and staff regarding premises conduct, and suspending or revoking RSA certifications. Such actions aim to mitigate risks and uphold safe and responsible operations within the industry.

Short term closure orders

Short-term closure orders can be issued for licensed venues to address significant threats or risks to the public interest, with closures lasting up to 72 hours or until specified conditions are met. These orders, governed by sections 82 and 83 of the Liquor Act 2007, may be applied if a serious breach of the law has occurred or is likely to occur. The Independent Liquor & Gaming Authority assesses applications for closure orders and provides the licensee with a warning that includes the allegations, the proposed closure period, and an opportunity to submit written objections within 24 hours (excluding weekends).

Disciplinary action

In addition to fines, the Independent Liquor & Gaming Authority can impose administrative sanctions on licensees for offences under the Liquor Act 2007. Serious misconduct may lead to disciplinary action, with the Authority having discretion under Part 9 of the Act to apply various penalties if specific grounds are met. Disciplinary complaints can target licensees, close associates, or managers, with 20 possible grounds for such complaints.

Broadly speaking, grounds for making a complaint fall into these categories:

• failure to comply with the Act, including a conviction of an offence under liquor legislation or failing to comply with any conditions of the licence

• conducting activities encouraging the misuse/abuse of liquor and intoxication

• violence at the premises

• not fit and proper

• licence not being exercised in the public interest, or continuation of the licence not in the public interest.

The Authority has discretion as to whether it should take action in relation to a complaint. Action may include:

• cancelling or suspending the licence

• issuing a fine to the licensee or manager

• imposing conditions on the licence

• disqualify the licensee or manager from holding a licence or managing a premises for such a period as Authority deems fit

• disqualify a close associate from being a close associate of a licensee or manager of licensed premises.

All of these are possible when it comes to non-compliant venues and licensees. This is why licensee training is so important, it helps you understand your obligations as a licensee and so much more.