Court Clarifies Procedural Fairness Obligations in Psychological Injury Claims

The Federal Court recently in Fernandez v Australian Postal Corporation [2025] FCA 1144 found that the Administrative Appeals Tribunal (AAT) denied a psychological injury claimant procedural fairness by failing to properly consider the events he said caused his condition.

The worker claimed he was falsely accused of misconduct in retaliation for interpersonal disputes at work. He said the incident triggered an adjustment disorder that left him totally incapacitated. The AAT rejected his claim, preferring the evidence of the employer’s witnesses—two of whom weren’t present at the key events.

The Federal Court found the AAT failed to make specific findings about the events leading to the worker’s condition and gave inadequate weight to his account. The tribunal’s conclusion—that his condition stemmed from “maladaptive personality characteristics”—was based on flawed reasoning and unsupported lay witness testimony. The matter was remitted to the Administrative Review Tribunal (ART) for reconsideration and costs were awarded to the claimant.

Our Take

This is another decision where the failure to properly investigate matters has brought an employer’s processes under significant scrutiny. It also highlights the importance of procedural fairness in psychological injury claims.

The AAT’s reliance on witnesses who weren’t present at the key incident and its failure to engage with the claimant’s account, undermined the integrity of the decision. The Federal Court’s ruling sends a clear message: procedural shortcuts and assumptions about personality traits are not a substitute for proper fact-finding.

For employers and legal teams, this case is a reminder to ensure that all relevant events are thoroughly examined and that witness credibility is assessed in context.

Action Items:

• Ensure Procedural Fairness in Injury Claims - Carefully consider all relevant events and witness accounts, especially those central to causation.

• Avoid Overreliance on Personality-Based Conclusions - Psychological assessments must be weighed alongside factual evidence—not used to dismiss claims prematurely.

• Prepare Witnesses with Direct Knowledge - Ensure those giving evidence were present at key events and can speak to the facts in question.

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