The Wiggles have driven a big red car to mediation with their former boss after rubbishing his claims he was illegally fired for complaining about the group hiring friends and family.

Luke O'Neill has launched legal action against the group, blue Wiggle Anthony Field and its general counsel Matthew Salgo in the Federal Court seeking damages and penalties.

He says he was dismissed without a reasonable basis by the famous children's entertainers in May after complaining about the hiring of Field's friends and family members.

But The Wiggles allege the former CEO was fired because his "overall performance was not satisfactory" and necessary trust in him had been lost.

"The situation was not regarded as sustainable or capable of remedy," their written defence says.

Mr O'Neill claims Field

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