Commonwealth workplace insurer Comcare, which has been hit hardest by the rise in mental health claims, would not comment on the  case but confirmed that it did covert surveillance in certain cases.

Commonwealth workplace insurer Comcare, which has been hit hardest by the rise in mental health claims, would not comment on the case but confirmed that it did covert surveillance in certain cases.

Covert surveillance is now being used in the fight against Australia's rising tide of compensation claims from workers who say their jobs have left them mentally damaged.

The federal government's workplace insurer Comcare, which is slowly going broke under the cost of ''psychosocial injury'' compo cases, has warned it is going undercover in an effort to bust dodgy claims by public servants.

The breakthrough case has come from National Australia Bank, which put private eyes on the trail of a former employee in Sydney who claimed workers' compensation for mental disorders allegedly caused by the bullying he suffered at the bank.

The case was keenly watched by insurers, who have found if difficult if not impossible to disprove mental injuries, as opposed to physical fakers, who can be detected easily.

The claimant in the Sydney case, Hashem Azary, looked a mess when he gave his evidence to the Administrative Appeals Tribunal last month.

The former bank worker rocked in his seat, walked stooped over and with his hands clasped in front of him, avoided eye contact and spoke in a child-like voice as he told the tribunal how bullying by his bosses at NAB had caused his mental health problems.

The claimant's wife told the tribunal that Mr Azary was ''totally dependent'' on her, that she had to help him shower, shave and dress, and that she had to put her husband's food out in front of him and then coax him to eat.

He could drive, she said, but only in emergencies.

But when he was being secretly tailed and filmed by private detectives hired by the bank the previous month, Mr Azary looked great.

He was clean shaven and neatly dressed as he drove his son to childcare, took his wife and daughter to McDonalds, and then spent a few hours with them in the city.

There was no rocking or stooping on the DVD shown to the tribunal and his hands looked fine.

Mr Azary's case took a bigger hit when neuropsychologist Thomas O'Neill told the tribunal he was unimpressed by the former banker.

''[Mr Azary] endorsed a high degree of exaggerated, unusual and extreme symptoms atypical of bona fide clients, but more typical of individuals asked to feign mental disorders in simulation research,'' Dr O'Neill said.

The neuropsychologist declared there was an 81.8 per cent chance the Iraqi migrant was faking it.

Two other psychiatrists on the case, Thomas Newlyn and David Bell, backed away from their

diagnoses after they saw the covertly filmed footage and read Dr O'Neill's findings.

Another two psychiatrists saw the footage and did not alter their view that the former home-loans salesman was sick, but they could not explain how he looked so healthy on the DVD but acted so unwell when he went to the doctor's office or to the tribunal.

Everybody agreed it was curious that Mr Azary spent four days in a psychiatric hospital, took anti-psychotic drugs and underwent electroshock therapy, but the tribunal held that none of those facts proved the claimant was sick.

Tribunal members Jill Toohey and Michael Couch found Mr Azary and his wife to be ''unreliable witnesses'', rejected their evidence and threw their case out.

The failed claim could be a watershed for bosses across the nation, particularly in the public sector, beset by a rising tide of mental health claims.

Commonwealth workplace insurer Comcare, which has been hit hardest by the rise in mental health claims, would not comment on the case but confirmed that it did covert surveillance in certain cases.