A Sydney hospital is under pressure to explain why it sacked a whistleblower who had reported the alleged indecent assault of a sedated patient within an acute mental health unit.

Security guard Brendan Osmond had worked for 23 years at St Vincent's hospital in inner Sydney before he was dismissed from his position as a supervisor earlier this year.

Key points: Security guard at St Vincent's reported indecent assault of patient

Security guard at St Vincent's reported indecent assault of patient Matter reported to police but criminal investigation did not proceed

Matter reported to police but criminal investigation did not proceed Security guard dismissed after working at hospital for 23 years

The sacking came after Mr Osmond reported that he witnessed a fellow security guard touch the breast of a patient during a pat-down in the hospital's acute psychiatric ward seclusion room.

The incident in April last year was referred to police but the patient could not be interviewed as she had subsequently been discharged and was listed as a missing person.

Police indicated to Mr Osmond that the matter was best dealt with internally within the hospital and he declined to make a police statement, according to evidence in the Fair Work Commission.

The Commission was told that at 2:30am on April 2, 2014, three security guards - Mr Osmond, fellow supervisor Des Squires, and senior security officer Jason Lord - were dispatched to an incident in which a patient at St Vincent's Caritas Mental Health Unit was acting aggressively.

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Nurses requested support from security to deal with the incident, and the patient was escorted to a seclusion room where she was injected with sedatives.

A search of the patient was then ordered, and was performed by security guard Des Squires.

The Fair Work Commission heard that four days after the incident, Mr Osmond sent a complaint to his manager alleging that Mr Squires had searched the patient in a manner which was "highly inappropriate by indecently touching/searching the female patient."

Matter referred to police

The matter was referred to police eight weeks later but a criminal investigation did not proceed.

St Vincent's Hospital's internal investigation concluded that the incident did not occur.

Senior security officer at St Vincent's hospital Jason Lord says he also witnessed the alleged assault. ( ABC News: )

Mr Osmond was then accused of lodging a false complaint, harassing and victimising Mr Squires, and lying to his bosses.

After being sacked from the hospital, he successfully sued St Vincent's for unfair dismissal in the Fair Work Commission, who ordered he be reinstated to his position after he won the case.

Mr Osmond completed his first day back at work yesterday. He told the ABC he was "disgusted" with the way he had been treated.

"I saw what I saw and I just reported it," Mr Osmond said. "I saw a breach of policy, I escalated it to my manager as I was supposed to do, and everything just went downhill from there," Mr Osmond said.

"I didn't do anything wrong and I love my job."

Senior security officer Jason Lord said he also witnessed the alleged indecent assault last year and gave evidence in the Fair Work Commission.

"I certainly wouldn't want anybody touching my family members in that way, particularly in that setting," Mr Lord told ABC yesterday.

"I knew all along that the truth was being told."

Mr Squires denies the allegation that he touched a female patient's breast.

He has never faced charges and is still employed by St Vincent's Hospital, which maintains it has no evidence an indecent assault took place.

In a ruling published this month, the Fair Work Commission said "it may have been a reasonable conclusion to reach on the facts available" last year that there was no evidence an indecent incident took place.

"To go further and find that Mr Osmond had fabricated his complaint with malice, was a conclusion simply not available to St Vincent's on any reasonable and impartial evaluation of the evidence".

St Vincent's Hospital security supervisor Des Squires was involved in an alleged incident with a patient. ( Facebook: Des Squires )

Deputy president Geoff Bull said that "nothing arising from the evidence...causes me to doubt" that the two security guards witnessed Mr Squires touch the breast of the female patient, who responded by saying "did you have a good feel?"

The hospital said in a statement that it had taken "all necessary and appropriate steps in relation to investigating this issue."

"Following the allegations made by a security officer, St Vincent's conducted its own investigation as well as referring the matter to Kings Cross Police which carried out its own investigations.

"Further, the Hospital engaged specialist lawyers to assist in its investigation while engaging expert external support to conduct an independent formal examination of the claims made.

"We believe that we acted in accordance with our obligations to provide a safe environment for our patients and staff.

"St Vincent's has a whistleblowers policy which was followed in this instance. We take our responsibilities in these areas very seriously.

"Nevertheless, the Hospital accepts the Fair Work Commission's decision and has reinstated the security officer."