Defence giant Thales back-pays workers $7m

Aerospace and defence giant Thales has underpaid hundreds of Australian workers by more than $7 million over seven years, with one employee owed nearly $160,000.

Thales Australia admits to breaking workplace laws after underpaying 407 past and present employees a total of $7.44 million between 2011 and last year.

The company has entered into a court-enforceable undertaking with the Fair Work Ombudsman and made a $200,000 contrition payment to the federal government.

The underpayments occurred because Thales failed to check employees' contracts were in line with their minimum entitlements.

This mean workers - ranging from middle managers, to admin and technical staff - missed out on between $2,593 and $158,978 each.

Under the undertaking with Fair Work, Thales must apologise to employees, overhaul its payroll system and commission an external audit of workers' pay and conditions.

"This outcome sends a strong message to employers that if you don't prioritise workplace compliance, you risk underpaying staff on a large scale and facing a massive back-payment bill," Fair Work Ombudsman Sandra Parker said on Friday.