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An employer has been criticised for not dismissing an employee when it was a "viable option" and instead undertaking a "misguided" performance management process that contributed to a psychiatric injury.

The University of Sydney Business School denied liability for the research associate's adjustment disorder, arguing her condition was caused by reasonable management action related to performance appraisal and discipline.

In applying to the NSW Personal Injury Commission to resolve a dispute, the employee claimed numerous workplace events led to her injury, with the overarching theme being that her manager engaged in "continuous, negative and unfounded criticism of her work"...