A spat between the ATO and one of its workplace unions over the use of office bulletin boards broke out last month after bosses took exception, again, to the use of the word "dud" on a union recruitment poster.

But the Fair Work Commission has ruled the tax office should not try to edit the material posted on boards, unless it is illegal or defamatory.

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The Australian Services Union took the case to the industrial tribunal after bosses removed a notice from a board at one of its Melbourne offices that read: "Don't be a dud, join the ASU today".

The message was seen as a provocation to tax office bosses, who had recently angrily denied reports negotiators in wage talks had referred to non-performers at the agency as "duds" and claimed the word was not used by tax office managers.

Managers argued the poster was inappropriate, declaring "it's for the ATO to make that assessment, given that we supply the noticeboards and they're in our buildings".

But commission vice-president Joe Catanzariti took a different view, citing the workplace agreement clause that says unions are allowed use office noticeboards to communicate with their members.

"It is my recommendation that material posted by the ASU to such noticeboards should only be removed by the ATO if it is, on its face, of such a character as to create a risk to the ATO of legal action, including, but not limited to, under anti-discrimination, harassment and/or defamation law," Mr Catanzariti wrote.

The ATO, which has had problems recently with anti-Semitic graffiti appearing at one of its Melbourne sites, said it respected the commission's decision.

"We work co-operatively with the Fair Work Commission and will abide by the recommendation," a spokesman said.

The spokesman said the tax office would not relent in its battle against the D-word.

"We last month sent a note to staff saying that the ATO has not and will not refer to our employees using that language," he said in a statement.

Union tax branch secretary Jeff Lapidos said the commission's ruling was a good outcome for his union.

"We were pleased with the outcome," the union official told his members.

"The vice-president recommended that the ATO should not take down our posters merely because it disagrees with our views.

"If the ATO believed the material was not appropriate, then the ATO could refer its dispute with the ASU back to him to have the dispute resolved."