The Fair Work Ombudsman has urged the Federal Court to impose the maximum penalty on the Commonwealth Bank for $16 million in underpayments to staff, saying a message needs to be sent to other businesses over what would be the largest employer and underpayment ever to be fined.

The bank admitted this year that it “knowingly” underpaid 7400 employees on individual agreements over a decade, despite repeated internal warnings to senior management and executives that staff were not paid correctly.