Woolworths will have to pay an employee almost $17,000 in lost wages after her right eye was savaged by a vicious native bird as she walked to work.

Anita Smith sustained a "severe" injury to her right eye when she was swooped on May 14, 2017 by a peewee that had been terrorising Kiama Village Shopping Centre.

The customer service representative had surgery in July to repair the injury, described in her claim as an "inturned central part of the right eye flap".

Ms Smith was unable to perform her full duties for 25 weeks and claimed Woolworths should have done something to protect its employees after reports of up to ten people being attacked by the same bird surfaced, according to the Illawarra Mercury .

Woolworths argued it was not liable for Ms Smith's damages as she was not working at the time of the incident.

A peewee that attacked a Woolworths staff member at Kiama Village Shopping Centre has been killed.

Earlier, a store manager also reportedly attempted to deflect blame – instead arguing centre management should have stepped in.

"Centre management had previously been informed regarding a number of bird attacks and chose to do nothing about this until this and other serious incidents happened," Woolworths told the Workers Compensation Commission (WCC).

The supermarket giant's appeal was rejected by the WCC last month.

Arbitrator John Harris said Woolworths did not escape its liability as an employer due to the fault of another party, in this case centre management.

"It is extremely unlikely that Ms Smith would have been attacked by the peewee at that time, had she not been in the course of her employment."

He also noted Ms Smith's store manager had "clearly established prior knowledge of bird attacks".

Woolworths was ordered to pay almost $17,000 in lost wages and must also cover Ms Smith's medical bills.