Senator Pauline Hanson’s right-hand man appealed to the Federal Court for the Commonwealth to pay the $4.54 million legal bill he incurred while attempting to sue former parliamentary Speaker Peter Slipper.

He sought a grace payment by the federal finance department but was denied, and submitted this was adverse action contrary to the Fair Work Act.

Justice Robert Bromwich on Friday dismissed the claim and invited the federal government to apply for costs to be paid by Ashby.

The judge said he was satisfied refusing Ashby the grace payment “falls within the description of the Fair Work Act of being action that is authorised by or under a law of Commonwealth,” and did not constitute adverse action, he said in his judgment.

“It is not in doubt that an important reason why the act of grace application was refused was because Mr Ashby chose to pursue the litigation against Mr Slipper and thereby to incur costs, when alternative and less costly remedies, including the exercise of other workplace rights, were available to him.”

Ashby sued Slipper in 2012, claiming his boss sent inappropriate text messages and made lewd remarks.

After two years in the courts, Ashby dropped the sexual harassment legal action against the former Queensland MP as it approached trial.

A minister from the Gillard government in 2012 permitted a grace payment for Slipper’s legal costs, creating what Ashby said was a power imbalance.

Earlier in the year Ashby’s “conventional judicial review case” was determined adversely against him which left his allegations of breaches of the Fair Work Act and associated judicial review.

After trying and failing in his last-minute bid to amend part of his pleading, the Federal Court dismissed the final portion of his claim on Friday.

“There remains outstanding the issue of costs, which may or may not be sought by the respondents,” Justice Bromwich said.