A former clerk with the Yukon Workers' Compensation, Health and Safety Board has been receiving disability benefits that she should not have been getting, according to a ruling this week by the Yukon Court of Appeal.

In a decision dated Wednesday, three judges of the appeal court sided with the Yukon government's bid to cut off compensation benefits for Charolette O'Donnell, who has claimed that she is entitled to benefits because getting fired has been so stressful that she has been unable to work for the past five years.

O'Donnell, a 15-year employee of the compensation board, has been collecting disability payments since she was fired in 2002 over performance-related issues.

She had submitted her claim for compensation around the time of her firing, claiming that it caused a psychological injury that has prevented her from working since then.

The Yukon government appealed and the matter went before the Workers Compensation Appeal Tribunal. In December 2005, it ruled that O'Donnell was not suffering from a work-related disability.

O'Donnell appealed that decision to the Yukon Supreme Court. In January 2007, Justice Leigh Gower quashed the tribunal's decision and her benefits were reinstated.

The government took Gower's ruling to the Yukon Court of Appeal, out of concern that O'Donnell's case may set a precedent.

Wednesday's decision now quashes Gower's decision, with the judges declaring that the tribunal's decision should never have been overturned.

Compensation board president Valerie Royle told CBC News that the latest ruling shows that the tribunal process works.

"Ms. O'Donnell worked here and, you know, she's been able to use the system and went through the appeal processes, and that's what's available to any worker in the Yukon," Royle said Thursday.

"That's fair game. That's what the system is designed for."

Compensation board officials are reviewing the decision to decide what course of action to pursue next, if any.