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An employer's defence to an employee's psychological injury claim has been undermined by evidence that he was exhibiting signs of stress before it decided to investigate his work practices.

NSW Personal Injury Commission Senior Member Elizabeth Beilby found it was "more than evident" that "significant psychologically provocative" events occurred before the investigation process commenced.

The Westpac Banking Corporation lending manager had sought compensation for a psychological injury, which he alleged arose from a "protracted pattern" of stressors including an excessive workload, continuous change, high KPIs, verbal abuse from customers and an unsupportive workplace environment.

His employer accepted he suffered a psychological injury, but argued it was the result of an investigation into his lending practices, which it maintained was reasonable management action...