Law firm Maurice Blackburn says underpaid intellectually disabled workers have been made an unfair offer by the Federal Government.

A year ago the Federal Court ruled that the test used to set the wages of people working in disability enterprises, or what used to be known as "sheltered workshops", was discriminatory.

The law firm representing thousands of workers who were underpaid is taking legal action to try and stop the Federal Government's plan to address the underpayments.

Last week the Government announced it would make a one-off payment to workers who can prove they suffered economic loss, but only if they do not participate in a class action over the lost wages.

Maurice Blackburn partner Josh Bornstein says the workers are owed as much as $100 million in total.

"The employees are some of the most vulnerable employees in our society. They are employees with intellectual disabilities working in disability enterprises, performing work which includes manufacturing, horticulture, cleaning work, processing work," he said.

"They have been severely underpaid, some of them are paid in the vicinity of $1 an hour.

"The Government can rectify that by simply paying what's owed.

"Instead they've pulled what I regard as a stunt and an attempt to try and dupe vulnerable employees into being short-changed and I think it's a move that should be condemned in the strongest terms.

"As a result, we have made an application to the Federal Court to try and ensure that all communication with this vulnerable group of employees about the legal process and their rights is supervised by the court and that the Government simply cannot dupe the employees into being short-changed in this way."

Government 'had ample opportunity to pay employees'

Mr Bornstein says there would be no need for a class action if the Government would pay employees properly.

"If the Government wants to resolve the matter, it has had ample opportunity since December 2012 to simply pay the employees what they're owed," Mr Bornstein said.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 5 minutes 18 seconds 5 m Listen to Josh Bornstein's interview with The World Today Download 2.4 MB

"There would be no need for a class action if that had occurred. This is simply another strategy that's being used by the Government to prevent the employees being paid their full entitlements.

"If the Government wanted to compensate the employees for their underpayments, they would simply come to us and sit down with us and negotiate and instead what they've done is said, 'We're not going to pay everything that you're owed. We are going to make a one-off payment if you want it, we're going to dangle a carrot in front of you and offer it to you, but you will forgo your claim under the legal process'.

"This is an old strategy that has been deployed by corporate defendants in class actions for some years, it's unprecedented in my experience for a federal government to engage in such a strategy."

Mr Bornstein say the Government's strategy is an "attempt at a shakedown".

"We're particularly concerned that individuals will feel pressured into signing away their rights," he said.

"So an individual might be owed $10,000 and be offered a payment of $1,000 by the Government under this scheme and by reason of the offer, and the pressure, and the carrot being dangled, they will lose out most of their underpayment claim."

He says the Government's claim that the one-off payment offer is a faster way to get paid is disingenuous.

"Implicit in the Government saying you will be paid more quickly if you accept this proposal is a threat by the Government itself to delay the legal process," he said.

"There is nothing to stop the Government from paying the workers now. There is nothing to stop the Federal Government from sitting down with us and resolving all of the claims and paying people very promptly.

"They are not doing that, they have not done that since December 2012 when the Federal Court ruled that these employees had been unlawfully underpaid.

"They have at no stage come to the table to resolve the issue, so the suggestion that you will be advantaged by a quick payment is in my view disingenuous once again."

In a written statement a spokeswoman for Assistant Minister for Social Services Mitch Fifield said while the details of the payments scheme were still being developed, it will in no way extinguish individual rights.