A Queensland Health employee involved in selecting IBM to roll out a new payroll system has been accused of helping the IT giant to win the government contract.

Queensland's payroll inquiry is examining emails and meetings between Damon Atzeni, a member of the state's panel involved in the process, and an IBM contractor in the lead-up to the tender process in 2007.

The inquiry's first two weeks have focused on whether IBM had an unfair advantage in winning the contract.

In astounding developments on Thursday, counsel assisting the inquiry, Peter Flanagan SC, accused Mr Atzeni of favouring IBM in replacing the obsolete system.

"You were doing everything in your power to assist IBM to become the prime contractor because you knew that the first rollout of a human resource solution was to be Queensland Health. Yes?" Mr Flanagan asked.

Mr Atzeni denied he had been assisting IBM.

However, he said he wanted Queensland Health to be made a priority over other departments because its computer systems needed to be urgently replaced.

Mr Atzeni admitted to having "sporadic" coffee shop meetings with IBM contractor Jason Cameron who worked within the government's IT agency CorpTech during 2007.

He said he could not recall what had been discussed, or if any other senior IBM staff had been involved in those meetings.

He also denied he gave IBM information that helped them win the contract.

Later that year he was put on the government's evaluation panel to score submissions from four bidders, including IBM.

In December 2007, the government awarded IBM a contract to project manage and roll out a new system for Queensland Health.

It resulted in thousands of pay bungles and continues to be plagued with problems.

The fiasco is expected to ultimately cost taxpayers $1.2 billion.

The inquiry continues.

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