Amid an escalating wage dispute heading into the festive season, the Federal Court earlier pressed pause on planned work bans and strikes on the NSW train network hours before they began on December 9.
But on Thursday it lifted the injunction after dismissing the state government's technical argument trying to invalidate the industrial action.
It opens the door to 8000 workers taking disruptive actions in the lead-up to Christmas ahead of several days of planned action starting December 28.
Business groups have warned even the threat of work bans and strikes will change consumer behaviours and send struggling firms into bankruptcy.
The court's decision follows Treasurer Daniel Mookhey and Transport Minister Jo Haylen facing the Fair Work Commission on Wednesday and weeks of intense negotiations to resolve the pay dispute.
"Another cheap and desperate stunt has failed, leaving NSW families to suffer through a Christmas and New Year's marred by rail chaos," opposition industrial relations spokesman Damien Tudehope said after the court decision.
"(Premier) Chris Minns is not just out of his depth - he's out of excuses."
Opposition industrial relations spokesman Damien Tudehope says the premier has run out of excuses. (Bianca De Marchi/AAP PHOTOS)
Immediately after the decision was handed down, Rail Tram and Bus Union leaders said they were considering their next steps.
The government abandoned an attempt to reinstate the injunction, pending appeal, after noting Justice Michael Wheelahan's scepticism and the unions' discontent.
Any appeal would likely not be heard for a week, the court was told.
"(That) would in effect rob the union of its success," barrister Leo Saunders, for the combined rail unions, told the court.
The court skirmish is the latest front in a wages war that kicked off in April.
Combined unions representing 13,000 rail workers have refused to budge from their demands for four, eight-per-cent annual wage increases despite extensive and lengthy negotiations.
The premier has said such a claim is unaffordable and could not occur while he is denying nurses a similarly costly claim.
The transport minister on Tuesday said industrial action was "intolerable" during Sydney's famed fireworks - the train network's busiest day - with more than a million people expected on the harbour foreshore.
Mr Mookhey urged the union to accept the offer on the table, which he would not disclose publicly.
"(It's) not a time to play chicken with the NSW economy," the treasurer said.
The government previously offered 11 per cent over three years, including superannuation increases.
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