Four weeks of mediation have failed to settle the legal dispute between federal MP Monique Ryan and her chief of staff Sally Rugg — setting the pair up for a protracted battle in the Federal Court.
Ms Rugg took legal action against her boss in January, alleging her job was set to be terminated because she refused to work overtime hours that were "unreasonable".
Ms Rugg applied for a court injunction to prevent the sacking from taking effect, and also sought financial compensation from Dr Ryan and the Commonwealth, the official employer of parliamentary staffers.
Lawyers for Dr Ryan and Ms Rugg are due in the Federal Court on Friday, where lawyers were set to update Justice Debbie Mortimer on the progress of negotiations between the parties.
However, on Thursday afternoon, Ms Rugg's legal team put out a statement saying the talks had failed.
"Mediation has failed to resolve the legal dispute between Sally Rugg, the Commonwealth and Dr Monique Ryan," Maurice Blackburn Lawyers principal Josh Bornstein said.
"Ms Rugg's case will be a test case for what constitutes "reasonable" overtime or additional hours for parliamentary staffers and may impact other white-collar employees in the labour market."
Ms Rugg's legal claim calls for Dr Ryan and the Commonwealth to be fined for alleged breaches of the Fair Work Act. Mr Bornstein said Ms Rugg would now seek to add further claims of "serious contraventions" of the act.
The specific allegations of Ms Rugg's complaint remain private, with Justice Mortimer previously refusing to release affidavits filed by both parties.
In October, Dr Ryan told News Corp some political staffers were working more than 70 hours a week, a scenario she described as "not healthy".
Ms Rugg, a high-profile same-sex marriage advocate, was hired as the teal independent's chief-of-staff after Dr Ryan toppled former treasurer Josh Frydenberg to win the Melbourne seat of Kooyong last year.
Dr Ryan declined to comment on Thursday afternoon, but in a short statement said Ms Rugg's claims "are rejected and will be defended".
