The Public Service Commission is examining what action should be taken against public servants adversely named in the Queensland Health payroll system inquiry report released earlier this month.
IT Minister Ian Walker told parliament on Thursday that the commission's chief executive, Ian Maynard, has found that five individuals should be issued "show cause" notices.
Walker said they'll have to justify why they should not be disciplined for their role in the failed project.
"Further consideration is ongoing in relation to other public servants named in the inquiry," he said.
He also wants IBM to present evidence that it will address its past "unethical practices".
The IT giant should take disciplinary action against its employees adversely named in the inquiry, the minister said.
The inquiry found that IBM solicited and received information during the tender process that gave it a distinct advantage over its competitors.
It also said IBM had received a "dry run" and proposal rehearsal from the man charged with managing the tender process, former IBM employee Terry Burns.
Thousands of health workers were underpaid, overpaid, or not paid at all when the system went live in 2010.
It is expected to ultimately cost taxpayers AU$1.2 billion.