The firm says the decision will have implications for all federal employees, including those working for major national companies.

The Perth client’s claim centred on his work as Mount Hawthorn branch manager in 2008, and a series of events and reporting requirements from management that made him feel “embarrassed and humiliated” and led to self harm.

Liability in client Mr Reeve’s case was initially accepted by the CBA and then denied, Slater & Gordon said in a statement

Mr Reeve then made an application to the Administrative Appeals Tribunal in 2010 for a review of CBA's decision, which was successful. The CBA appealed that decision to the Federal Court.

Slater & Gordon Comcare national practice group leader, Rachael James, said the Court determined that in this client’s case his injury was cased by a "management" rather than an "administrative" action and was therefore not excluded.

“A person’s mental health is as important as their physical health,” she said.

James said the decision put “some fairness” back into the legislation that governed Federal employees.

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“We are certainly disappointed by the bank’s decision to fight this matter into the Federal Court and the fact that this has gone on for more than three years.”

In the course of its decision, the Federal Court has today defined what is a psychiatric injury for Federal employees, the law firm said.

In 2007, there was a series of amendments to the Safety, Rehabilitation and Compensation Act, which sought to broaden the basis upon which an employee's psychiatric injury could be excluded from compensation. Specifically, injuries which were caused by “a reasonable administrative action undertaken in a reasonable manner” were excluded.

“The Federal Court said the interpretation that was being used by employers and insurers since the 2007 amendments, had gone too far,” James said. 

“This now at least gives a definition in keeping with the purpose of the amendments in the first place and certainty for both employers and employees around what claims will be accepted,” she said.

As a result of today’s decision, Mr Reeves will be able to claim his medical expenses and time off work from the date of the injury in July 2008.