Commonwealth Public Service workplace insurer Comcare mounted a Federal Court challenge after a tribunal found Maria Martinez was bullied by being forced to attend one-on-one counselling sessions with her boss.

Ms Martinez, who worked at the National Indigenous Cadet Project Program until August 2010, applied for workers' compensation, alleging she was patronised, bullied and made to feel stupid.

Comcare twice rejected the claim, saying those in charge had been reasonable in their attempts to improve her poor workplace performance.

But the Administrative Appeals Tribunal last year found against the Department of Education, Employment and Workplace Relations, saying it had been ''insensitive'' to the employee's issues and ''humiliated'' her by holding private meetings to talk about her performance.

While the department offered leave and counselling to Ms Martinez to help her improve her work, the tribunal found the ''unreasonable'' approach contributed to her adjustment disorder.

Comcare challenged the decision, arguing the tribunal did not make a finding required to properly dispose of the matter and erred in law by failing to give adequate reasons for its decision.

But Ms Martinez's lawyer told the court the tribunal took the correct approach in assessing the case.

Justice Alan Robertson reserved his decision.