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 administrative and technical staff – missed out on between $2593 and $158,978 each.

Thales is a multinational company that describes itself as “one of the Australian Defence Force’s most trusted partners and … one of Australia’s leaders in research and development”. It has 3700 employees at 35 sites in Australia.

Under its 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.