A senior political staffer to federal teal MP Monique Ryan has raised the stakes in her unfair dismissal claim after private talks broke down.

The Kooyong MP’s chief of staff Sally Rugg will seek to add claims of “serious contraventions” of the Fair Work Act after mediation failed to resolve her legal dispute with Dr Ryan and the Commonwealth.

Maurice Blackburn’s principal lawyer Josh Bornstein said the penalty for knowingly and systematically breaching labour standards is up to $660,000.

“The serious contravention claim is made in circumstances in which Dr Ryan publicly acknowledged that her staff were working 70-hour weeks and that it was not safe,” he said in a statement on Thursday.

“In addition, the Commonwealth has been on notice of unlawful excessive hours being worked for parliamentary staffers for many years, including by reason of inquiries and reports to Parliament.”

Mr Bornstein said the social activist’s case would be a test of what constitutes “reasonable” overtime or additional hours for parliamentary staffers and could have wider implications if successful.

“If Ms Rugg’s case succeeds, it will open the door for further litigation including class actions, not just for employees of the Commonwealth but for every Australian worker experiencing exploitation because of a contractual obligation to perform undefined ‘reasonable additional hours’,” he said.

In a statement, Dr Ryan said the additional claims are rejected and will be defended, but as the matter is before the court, no further comment will be made.

Dr Ryan hired Ms Rugg, a former Change.org head, last year following her successful challenge to then-treasurer Josh Frydenberg’s seat of Kooyong in the federal election.

Ms Rugg has alleged Dr Ryan and the Commonwealth breached national employment standards and workplace agreements by sacking her for refusing to work unreasonable hours.

Her employment was due to end on January 31, but she has been allowed to keep her job until the case returns to court on Friday.

Once the injunction is heard, Ms Rugg will seek compensation and pecuniary penalties from all parties.