The Community and Public Sector Union has lodged a dispute with the Fair Work Commission over a move by the department it alleges is forcing hundreds of affected staff to sign over superannuation they have earned on free accommodation agreements.

The policy affects staff going on overseas postings, short-term missions, short-term assignments, and domestic relocation.

In a circular issued in early March, seen by The Canberra Times, the department's chief people officer, Jo Talbot, told employees to agree to forgo superannuation paid on provided rent-free accommodation.

"These agreements reflect the department's long-standing position that the value of accommodation should not be included in employees' salaries for superannuation purposes and provides certainty to staff about what is included in their superannuation salary," Ms Talbot wrote.

"An employee may choose not to sign an agreement, but the decision to deploy them will be reviewed and they may not be deployed.

"In considering whether an employee who chooses not to enter into a superannuation agreement as requested should be deployed, the department proposes to have regard to matters relevant to the department's efficient and effective operations."

The union demanded the department withdraw the request as early as February this year, asking it provide an estimate of the amount of superannuation employees would forfeit if the agreement was signed.

It also asked DFAT to remove the suggestion it would withdraw deployment opportunities.

Department heads and union representatives met twice but were unable to resolve the issue, prompting the union's decision to take it to the Fair Work Commission.

Union deputy secretary Beth Vincent-Pietsch said the department was holding overseas postings hostage to get their way over employees.

"The Department of Foreign Affairs and Trade is basically blackmailing its staff to sign away their potential entitlement to superannuation on housing to either stay on or be deployed overseas," Ms Vincent-Pietsch said.

"This agreement could see DFAT employees sign away [thousands] that they are legally entitled to.

"The department is misleading their employees by asserting that signing this agreement will not change their super entitlements, when they know well that this matter is currently before the Federal Court.

"For DFAT staff, a posting is a vital part of their career in the department, and holding this opportunity hostage is sneaky and misleading.

"Community and Public Sector Union members hope that DFAT reconsider this misleading policy and wait for the Federal Court to finish its deliberations."

The department reiterated to The Canberra Times that it stands by its long-held position that the value of accommodation should not be included in employees' superannuation salaries.

The latest claims add to a long-running dispute between the department and a group of affected workers, who claim they're owed millions in underpaid superannuation over the decades.

Proceedings are under way in the Federal Court brought by three DFAT employees, who are claiming accommodation provided to them on postings should have been included in their superannuation salaries.

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The public sector union is concerned employees who sign the department's latest agreement might be losing out on thousands of dollars individually if the court later determines superannuation has been wrongfully withheld from the workers.

The historical cases primarily relate to current and former employees of DFAT.

But further proceedings are expected to be undertaken by staff at the Home Affairs Department, Australian Federal Police, Finance and the Tax Office.

It's claimed the bill from historical cases of superannuation underpayment could reach into the hundreds of millions.

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