The Federal Court has rejected Maria Martinez' claims that the Department of Education, Employment and Workplace Relations acted unreasonably by asking her to one-on-one meetings with her boss to talk about her poor performance.

The case sent shockwaves through the public service in late 2012 when the Administrative Appeals Tribunal found the face-to-face counselling was ''insensitive'' to the worker's issues, ''humiliated'' her and contributed to her “adjustment disorder”.

Federal workplace insurer Comcare launched a Federal Court appeal, arguing that the actions of Deborah Ward, Ms Martinez’s boss in DEEWR’s National Indigenous Cadet Program, had been fair and reasonable in her reaction to the worker’s performance issues.

In a decision handed down on Friday, Justice Alan Robertson found the tribunal failed to consider fully the insurer’s guide to bullying that says “management action is reasonable if conducted fairly, transparently and in line with approved processes”.

The judge ruled that an employee’s reaction cannot determine whether the management action was reasonable or not and that “some degree of humiliation may often be a consequence of a manager exercising his or her legitimate authority at work”.

The judge ordered that the case be sent back to the AAT but rejected Comcare’s request that it be heard by different tribunal members.

Justice Robertson also opened the way for the Commonwealth Government to meet the costs of Comcare and Ms Martinez for the appeal.