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An employee who was "hypersensitive" to workplace gossip and criticism has won compensation for a psychological injury, after a commission found a procedurally unfair misconduct investigation was its predominant cause.

NSW Personal Injury Commission Member Rachel Homan said the employer's actions were unreasonable and had "grave consequences" for the employee's career and mental health.

The Department of Education special educator sought workers' compensation for depression and anxiety, which she claimed was caused by workplace bullying and harassment. The employer initially accepted her claim, however in October 2023 it disputed ongoing liability, on the basis the injury had resolved.

The employee subsequently made a second compensation claim for the aggravation of her psychological injury, alleging this was caused by the employer's failure to promptly investigate "false accusations of misconduct", and its "excessive" decision to place her on alternative duties...