Workplace psychiatric injury is a significant health, economic and social problem. Multiple recent inquiries and reports have drawn attention to the failure of Australian law, including workplace health and safety ('WHS') regulation and compensation laws, to adequately respond to workplace psychiatric injury. This article considers how Australian negligence law has responded to workplace psychiatric injury since the High Court took a restrictive approach in 2005 in 'Koehler v Cerebos (Australia) Ltd'. It considers the role of workplace psychosocial hazards in psychiatric injury and the changing Australian WHS landscape, including the evolution of Australian principles of negligence following Koehler. The 2022 High Court decision in 'Kozarov v Victoria' which concerned injury from vicarious trauma is analysed and the tensions and unresolved issues post Kozarov are considered. The article argues that while Australian negligence law has experienced some change of direction post Kozarov, the failure of the High Court to overrule Koehler means it may remain difficult for some injured employees to recover for their workplace psychiatric injuries. Further development of negligence law is required in a way which promotes coherence with the Australian legislative regulatory landscape, and which adequately recognises the nature of workplace psychosocial hazards.