Federal MP Monique Ryan and her chief of staff Sally Rugg have put their legal dispute on ice, agreeing to go to mediation after their lawyers fronted the Federal Court.

Ms Rugg — who was appointed Dr Ryan's chief of staff after her election win in Kooyong — took legal action against her boss and claimed additional hours she was asked to work were "unreasonable".

According to court documents filed by Ms Rugg, her employment was due to be formally terminated on January 31.

However, six days before that occurred, she lodged the unfair dismissal claim in the Federal Court, accusing Dr Ryan of “engaging in hostile conduct in the workplace”.

Ms Rugg applied for a court injunction to prevent her employment being ended by Dr Ryan or the Commonwealth, Ms Rugg's official employer.

On Friday, lawyers told Justice Debbie Mortimer they had agreed to go to mediation, with the parties to report back to the court on February 17.

Ms Rugg will continue to be employed and receive paid leave until that point.

On Friday, Justice Debbie Mortimer said the court had received "a lot of material" from the parties, including written affidavits from Ms Rugg and Dr Ryan.

However, lawyers for the pair sought to block media access to the documents, saying their release could hamper the mediation process.

Justice Mortimer agreed to the request, saying it was in the best interests of the parties "to feel completely free to negotiate an outcome".

"I wish you well in your negotiations over the next two weeks," she said.

Dr Ryan appeared in court with her legal team, while Ms Rugg watched the hearing unfold on a video link. Neither was required to give evidence.

According to court documents, Ms Rugg is also seeking financial compensation from Dr Ryan and the Commonwealth, and is calling for them to be fined for alleged breaches of the Fair Work Act.

The former GetUp! campaign director is said to have refused to work additional hours "that were unreasonable", something she was entitled to do under the act.

Ms Rugg — a prominent activist and "yes" campaigner during the same-sex marriage plebiscite — was hired as a key member of Dr Ryan's team after the teal candidate toppled former treasurer Josh Frydenberg to win the Melbourne seat of Kooyong.

Dr Ryan made no comment as she left court.

Later, Dr Ryan released a statement, saying she hoped to reach a "sensible resolution to the dispute".

In a statement, Ms Rugg's lawyer Josh Bornstein said he and his client were "pleased with the outcome today".