The Commonwealth Bank is facing millions of dollars in fines as part of a court action that alleges it “knowingly” underpaid thousands of employees more than $16 million by getting them to sign on to individual agreements that undercut union deals.

The Fair Work Ombudsman is seeking penalties of up to $660,000 per breach against the country’s largest bank for what it says are “serious and systemic” underpayments of 7425 workers since at least 2015.