The rail union has won the right to continue industrial action after the NSW government attempted to block further disruption of the state's train network.
Earlier, NSW Premier Dominic Perrottet said calling in the industrial umpire was in the best interest of commuters after a week of failed negotiations.
But the government lost its bid to halt a second week of industrial action after an interim hearing before the Fair Work Commission. A full hearing will take place on Thursday.
Industrial action brought by the Rail, Tram and Bus Union (RTBU) is due to continue on Wednesday and Friday, reducing the number of rail services by about 30 per cent.
The rail union wound back its previous plans to ban all foreign-made trains from service, which would have reduced services by up to 70 per cent amid severe wet weather.
Speaking before the ruling, Mr Perrottet said the government's decision to go to the commission was the only way to resolve the dispute and end the industrial action.
Negotiations have failed despite an offer from the government to make $264 million in safety changes to the Korean-built fleet of trains that is the basis of the dispute.
RTBU NSW secretary Alex Claassens said the government's decision to go to the commission was incredibly disappointing.
"Rather than simply applying common sense and ensuring we can get safe trains on our tracks as quickly as possible, the government has chosen to waste taxpayer money by playing political games like dragging the union to the Fair Work Commission and backtracking on safety promises," he said.
"The only people benefiting from the NSW government's attempts to force the union into the Fair Work Commission are the lawyers."
But Mr Perrottet said he wouldn't have gone to the commission if he didn't believe it was in the best interest of residents.
"I will always put our people first. We have worked tirelessly in relation to reaching an agreement," he said.
"I made that concession in circumstances where I did not believe and do not believe today that those modifications need to be made."
The costs of storing the fleet would skyrocket without the concession, Mr Perrottet said.
Australian Associated Press
