The NSW government says the state's trains are back on track after the Federal Court granted an injunction, while union officials blame any further disruption on the rail operator after being ordered to call off its work bans.
Passengers were on Monday told to plan ahead as reduced services were operating and some trains were being replaced by buses.
The state government and Rail, Tram and Bus Union branch had been locked in two weeks of intensive talks in an attempt to reach an agreement in an escalating stand-off over pay and conditions.
"I was hopeful we would get (an agreement) over the last two weeks, but the truth is we haven't landed one," Premier Chris Minns told Sydney radio 2GB.
"We'll do everything we can to ensure that commuters are not put out in the run up to Christmas."
Planned industrial action on the NSW rail network was cancelled after a Federal Court injunction. (Mick Tsikas/AAP PHOTOS)
The Federal Court on Sunday issued an injunction to cancel planned industrial action, which would have caused severe disruption across the rail network.
A hearing is expected within days to decide longer-term measures.
Union secretary Toby Warnes said the government's legal strategy, which prevented negotiations continuing as a deadline approached, was pre-planned and had set discussions back when the two sides were nearing a resolution.
"There was enough goodwill to get there but unfortunately that goodwill is well and truly burnt now," he told ABC Radio Sydney.
The union had a lengthy log of claims but the main issue is "mostly wages at this point", Mr Warnes added.
It is calling for annual pay rises of eight per cent for four years, while the government says anything more than 11 per cent across three years is unaffordable.
Members have been told not to continue industrial action and lingering impacts of existing work bans should soon dissipate.
"(Disruption) beyond lunchtime today needs to be written down to Sydney Trains' incompetence rather than our industrial action which seems to be a convenient excuse that's trotted out all the time," Mr Warnes said.
Union members were told the government's legal action hinged on a technicality and industrial action could resume after another ballot.
Members had intended to limit the distances they operated trains and progressively reduce the number of kilometres each day until a deal was done.
A temporary truce was struck in November after commuters faced the prospect of a weekend-long rail shutdown, but the government did not shift its position on pay as it faced similar demands from unions for key frontline workers.
"How can I say yes to rail workers when we've said no to nurses and we are in litigation with them in the courts?" Mr Minns said.
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