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An employee's psychological injury was caused by real work events rather than "pure delusion", a commission has upheld in dismissing an employer's appeal.

NSW Personal Injury Commission Acting Deputy President Paul Sweeney affirmed that causation could be established where workplace events had occurred and were perceived as creating an "offensive or hostile working environment", regardless of whether the employee's reaction was "rational, reasonable and proportional".

In the case at hand, Warrumbungle Shire Council was appealing a July 2025 finding that a water project engineer's employment was the main contributing factor to her psychological injury.

The employee had reported interpersonal difficulties with her manager and a "toxic" workplace. Witness evidence stated she cried at work, felt "overwhelmed" by her duties, and complained of bullying...