Public Service Minister Nicola Willis on Monday said she had directed department bosses to tighten up on working-from-home arrangements - that they should only be by agreement, not compromise performance, and departments and agencies must regularly report on the number and nature of agreements in place.
Willis said "if the pendulum swings too far in favour of working from home, there are downsides" for CBD retailers, restaurants and cafes.
A number of outlets have closed in recent times, and those still open reporting empty streets and fewer customers than in the past.
Public Service Association national secretary Duane Leo told Checkpoint Wellington's woes were a direct result of the government's "slash and cut" policies.
Much of the public service was based in Wellington, being the capital.
"This is a political reaction, blaming public servants for a problem that this government has created. The issue here is that if this government really cared about the Wellington economy, then it wouldn't have cut thousands of hardworking public servants' jobs. I think we're at 6000 jobs and counting. It's a total distraction."
Willis said there were good reasons employees had traditionally been physically brought together for work. Remote working exploded in popularity in the wake of the Covid-19 pandemic - while at first it was a necessity, studies have found those with the option to work from home typically like it.
Leo said an "edict" from the government would not override working arrangements many employees would already have baked into their contracts.
"Many public servants already have flexible working built into their employment agreements, and they've been negotiated over a number of years. The government can't just disregard negotiated employment agreements… they can't unilaterally make this change."
Even if some were forced to come back in, Leo said they might not have the money to spend to revitalise retail in the CBD.
"You've got public service workers at the moment that are struggling, so them coming back into town doesn't necessarily mean that they're automatically going to start spending more money in terms of cost-of-living increases."
'Where are these staff going to go?'
Nor might workplaces have space to put them, he added.
"Given the cuts that agencies have been facing over the last couple of months, a lot of agencies have actually downsized, so their physical footprint in terms of the building space they have and the actual facilities they operate in… has been reduced.
"So you've not only got some of the challenges I've already talked about, but you've also got physically, where are these staff going to go? Because you've got an environment where agencies have been told they have to make these cuts, so they've done so, and part of that has been downsizing the actual building space that they operate in."
He said the government had not been in touch with him, as head of the PSA, in regards to its desires regarding flexible working arrangements. The PSA itself was yet to formalise its response.
"One of the first things we'll be doing is talking with members and whether it's in a policy or whether it's in the collective employment agreements that they have, those are the first port of calls for us.
"And we'll also be seeking to engage with the agencies because again, as we've seen with the cuts, the deep cuts that this government has made, it's not just simply a process of them saying 'do it' and it's done. We want engagement. We want to work through with our members. But also we want to highlight the fact that this is actually beneficial for a large number of agencies and our members."
