Sacked Australia fullback Israel Folau will take his legal fight against Rugby Australia to court after emerging "very disappointed" from a failed conciliation hearing in Sydney.
Folau and his legal team met with Rugby Australia in the first formal step of his unfair dismissal case but no agreement was reached after nearly four hours.
"It appears as though, unless things change that we will be heading to court," Folau's solicitor George Haros told reporters.
"Very, very disappointed about the outcome today but I'd like to thank all those that have supported me throughout this time and I'll continue to stand up for the freedoms of all Australians," said Folau.
Folau had his four-year playing contract torn up last month after being found guilty of a "high-level" breach of Rugby Australia's code of conduct for posting on social media that hell awaits 'drunks, homosexuals, adulterers' and other groups.
The Fair Work Commission's conciliation hearing offers a last chance for employers and employees to settle a dispute before taking proceedings further.
Before arriving at the hearing told reporters he wanted "an apology from Rugby Australia. That would be great."
The 30-year-old is seeking A$5 million plus compensation for foregone sponsorship and future contract income from Rugby Australia in a case he has cast as a fight for 'religious freedom'.
Backed by a Christian lobby, Folau raised a war chest of A$2 million from thousands of public donors in two days and has said he will take the case to Australia's highest court if unsuccessful.
An apology from Rugby Australia was never a likely outcome of the hearing, however, with CEO Raelene Castle doubling down on the governing body's position that Folau's case was an 'employment' matter not a religious one.
"I want to make clear that Rugby Australia has acted with complete professionalism and integrity at all times through the process by which Israel was found, by an independent three-member tribunal panel, to have made multiple, serious breaches of the Professional Players Code of Conduct," Castle said on Thursday.
The cash-strapped governing body is also under pressure from sponsors to hold firm on Folau, with Qantas, the airline that holds naming rights to the Wallabies, 'very supportive' of Rugby Australia's actions.
With the showpiece Rugby World Cup starting in less than three months, Rugby Australia can ill afford the distraction of the Folau case, and have been urged to seek a settlement by a prominent rugby executive.
"You can die for a principle or be pragmatic. No one is going to win here," New South Wales Rugby chairman Roger Davis said in comments published by the Sydney Morning Herald.
"It is in the best interests of the game to mediate a solution to this, but it will require both sides to move off their preferred position."