The Australian Taxation Office's proposed zero tolerance approach will force managers and colleagues to be on the lookout for behaviour that might indicate someone in their team is under the influence of drugs or alcohol, or might be impaired from it, such as a hangover.

Managers will be expected to document discussions had with anyone suspected of being impaired and speak to witnesses of the behaviour.

It will also require those notes and observations be passed on to the human resources unit for further investigation.

But the ATO said its planned policy adjustment was nothing for public servants to be concerned about, adding drug and alcohol policies were "common throughout the economy".

Its aim was to set organisational expectations for staff to "assure employers that risks are being managed, to protect fellow employees and to support employees that may be struggling with addiction".

But the tax branch for the Australian Services Union is concerned the new "hardline" rules will scare employees from coming forward with issues.

Branch secretary Jeff Lapidos said the burden was placed on managers to report any suspicions they had over their staff to the human resources team for potential misconduct action.

"The ATO's policy of taking misconduct action against everyone who admits to any illicit drug use or inappropriate use of alcohol will only drive this conduct further underground," he said.

"No employee will be able to seek support from the ATO to deal with any addiction or related health issues."

A spokesperson for the ATO said policy changes were needed to address "the evolving needs of a modern workplace" but would not confirm whether there had been a spike in substance abuse issues within the agency.

"We always put the health and wellbeing of employees first and have a range of support and assistance available to all employees," the spokesperson said.

According to the tax agency's latest census results, staff wellbeing was recorded at 74 per cent, which rates six points above the average across the public service, including similar-sized agencies.

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The public service commission advises alcohol or drug abuse may be in breach of the APS Code of Conduct, especially in cases where it affects performance or the safety of colleagues.

Agency heads were expected to issue "reasonable directions to employees about their use of drugs or alcohol", it suggests.

Other agencies, including the Department of Home Affairs, have also introduced strict drug and alcohol management programs.

Home Affairs employees are subject to random drug and alcohol tests within the workplace and are prohibited from drinking on the job and can never take illicit drugs regardless of the type of duty, or location of the service being performed, including while working from home.

During the 2019-20 financial year, the department conducted more than 2000 tests with two returning positive.

But Mr Lapidos said it was the wrong approach for staff at the tax agency, calling on human resources head Jacqui Curtis to reconsider the approach.

"The ATO needs to take the opposite approach to encourage its staff to deal with these problems," he said.

"It is disappointing that Jacqui Curtis, the ATO's Chief Operating Officer and the head of the APS Human Resources stream, has taken such an old fashioned hardline approach."

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