The rail union has won the right to continue industrial action after the NSW government attempted to block further disruption to the state's train network.
Earlier on Tuesday, 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 the 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 will reduce the number of rail services by 30 to 40 per cent on Wednesday and Friday.
Some 50 additional trains had been brought online during negotiations, to bring Wednesday's services up to 60 per cent, Transport for NSW chief operations officer Howard Collins said.
Mr Howard said the network had been operating at about 75 to 80 per cent on Tuesday, having been impacted by the bad weather.
The rail union already wound back previous plans to ban all foreign-made trains, which would have reduced services by up to 70 per cent amid severe wet weather.
Metropolitan Roads Minister Natalie Ward called the decision a victory for the government, saying filing action in the commission caused the union to lift a number of its industrial bans.
"Today we've seen quite a win in capacity for getting more trains back on the tracks," she said.
"That's why the NSW government took this action because we want those trains back on the tracks.
"We want people to be able to get across our network."
Negotiations failed despite the government offering to make $264 million in safety changes to the Korean-built fleet at the heart of the dispute, an offer which Ms Ms Ward said was still on the table.
"Our offer stands and we expect the unions to come to the table with a fair and reasonable offer too."
The union's NSW secretary Alex Claassens said the government's decision to go to the commission was 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."
Speaking before the ruling, Mr Perrottet said going to the commission was the only way to resolve the dispute.
"I will always put our people first. We have worked tirelessly in relation to reaching an agreement," he said.
The premier said the safety changes offered were unnecessary, but the costs of storing the fleet would "skyrocket" without a resolution to the dispute.
"I made that concession in circumstances where I did not believe and do not believe today that those modifications need to be made," Mr Perrottet said.
