Fears 'strange' APS flexible work rights could reshape Canberra

New enterprise agreements across 102 government agencies will remove caps on the number of days employees can work from home, or remotely, and enforce a bias toward approving requests for flexible work.

Most agencies are expected to vote up the agreements by March, with The Property Council ACT and the Canberra Business Chamber voicing concerns about how it will impact Canberra's population of 65,000 federal public servants.

The Property Council's ACT executive director Shane Martin criticised the shift to uncapped flexible work as "unbalanced".

"The office environment provides benefits for private and public sector and that is why the new Enterprise Agreements for the APS that increase access to flexible working arrangements with uncapped work from home days feels unbalanced," Mr Martin said in a statement.

"Flexibility is here to stay and it should stay, but creating a scenario where individuals work indefinitely from home without a valid reason is unlikely to benefit themselves or their team."

The property group lobbied hard for a strong return to offices in the aftermath of COVID lockdowns, releasing quarterly office occupancy data up until 2023, but both the federal and ACT public service have since leaned heavily into flexible work.

Federal government departments have already begun downsizing their lucrative office leases and implementing hotdesking as a cost-saving measure.

"A move that encourages uncapped work from home days in the APS would seem to discourage a need for public servants to be in Canberra at all, resulting in a loss of connectivity and learning that everyone should be able to benefit from," Mr Martin said.

"Canberra is the nation's capital, it's the home of our national parliament and the home of the federal public service.

"It would be a strange policy manoeuvre to actively try and ignore this reality."

Flexible work options will also include varying start and finish times, and part-time arrangements. Agency heads will be able to knock back requests on reasonable business grounds, such as if the arrangement were too costly, or would impact productivity.

Just over 38 per cent of the public service worked from Canberra, as at June 2023, compared to 34 per cent in 2004. Victoria and NSW were the next most popular states for federal bureaucrats, home to 16.8 per cent and 16.6 per cent of the workforce at the last count.

Canberra Business Chamber chief executive officer Greg Harford recognised ways of working had changed, but urged more consideration on the impacts for local businesses.

"Often those those people become consumers with relatively high disposable incomes and they are really important for for businesses right across Canberra ... everyone from tradies, to lawyers to retail, and hospitality," Mr Harford said.

"I think businesses need to embrace the fact that the customers will shop in different ways and eat out in different ways and in different places, but fundamentally, we do need to see probably a bit of leadership to try and get workers back into the offices."

While a rush of public servants out of Canberra is unlikely, recruitment outside of the territory could impact the footprint of the federal public service.

"I think there is certainly quite significant scope for the workforce to become more decentralised," senior lecturer at the UNSW School of Business, Fiona Buick, said of the new conditions.

The Turnbull government introduced a program to decentralise the APS away from major cities in 2017, in an effort to increase opportunities in rural and regional areas.

Since scrapped, the policy was triggered by former Agriculture Minister Barnaby Joyce's controversial decision to relocate the Australian Pesticides and Veterinary Medicines Authority to Armidale, triggering a slew of cultural issues.

Now, the shift to flexible work is a critical one for the Albanese government, with the public sector trying patch gaping capability holes while it reduces its reliance on consultants, contractors and labour hire.

"Flexible working is a good lever for both attraction and retention, and making sure that when ... the APS is recruiting, they're getting the best person for the job, and I think not everybody is going to want to live in Canberra," Professor Buick said.

"There are probably numerous people within the APS who would prefer to live outside of Canberra for various reasons and I think we could potentially see people ... not having to choose between the employment in the APS or living in their ideal location."

APS leadership will need to adjust management styles to suit this new model of work, Professor of Economics at the Australian National University Kieron Meagher said, pointing to links between remote work and poor outcomes for management, productivity and mental health,

"There's a lot of opportunity here, but there's also a lot of risk in terms of mental health," Professor Meagher said.

"And I don't think we're aware enough of the long-term potential issues with mental health from remote work.

"There's [also] challenges for managers, if there's going to be a lot of people not in the office.

"A lot of managers are going to need to develop a new set of skills, because it's a different kind of workplace they'll be running."

A spokesperson for Public Service Minister Katy Gallagher said flexibility options would vary from differing start and finishing times, part-time hours, and where employees are based.

"We need to attract and retain good talent in the APS - and to do that, the APS must be a model employer that offers flexible workplaces," the spokesperson said.

"We have been rebuilding the APS, including by increasing the number of public servants.

"The Albanese government recognises the role of the national capital, and our policies are supportive of the ACT which continues to experience a strong economy."