Undercover police officers sent to the Bedford Arms in the town of Brookton said they observed a barmaid going "beyond the decency standards" during a visit in November, The West Australian reported Friday.
Brookton, a town of just over 500 and center of an agricultural district, is 88 miles east of Perth.
Police said the woman started the evening wearing nothing above her waist except for pasties covering her nipples. During the evening, she occasionally removed one of the pasties and at times took everything else off, the officers reported to the Liquor Commission.
Uniformed officers on a visit in February saw another barmaid naked from the waist up, the commission said.
"She rapidly fled the bar area once she became aware of the police presence," the commission said.
Officers said Gregory Marr, the holder of the pub's license, was present when barmaids collected money from patrons paying for a wider view of their bodies.
The commission has fined Marr $3,000 Australian ($2,821 U.S.). He was ordered to take a course on the proper running of a licensed pub.