Commonwealth Bank of Australia has admitted to knowingly underpaying thousands of staff more than $16 million through mass use of individual agreements that unlawfully undercut union agreements, exposing it to massive fines.

The country’s largest bank accepted allegations in the Federal Court that its senior managers were repeatedly on notice that workers were getting underpaid since 2010 but failed to fix the issue and even misled staff and the workplace umpire that it was complying with the law in what it conceded was a decade of “systematic conduct”.