A legal challenge has been launched against a sweetheart deal between Coles and the shop assistants union alleged to have left thousands of low-paid workers worse off.

The challenge in the Fair Work Commission comes after The Sunday Age revealed that workers at Coles could lose as much as $20 million a year in wages under the agreement struck with the conservative Shop, Distributive & Allied Employees Association (SDA).

SDA National Secretary Joe de Bruyn. Credit:Jesse Marlow

A detailed analysis of the deal by senior union official Josh Cullinan showed that younger workers are the hardest hit by the agreement which covers more than 75,000 workers.

Another union with members at Coles will use Mr Cullinan's analysis as a basis for the challenge. It will argue the deal fails the "better off overall" test as it leaves many workers worse off when compared to the retail award, the basic wages safety net.