Transport Minister David Elliott confirmed today the government will drop the case and begin working on a new enterprise agreement with the Rail, Tram, and Bus Union (RTBU).
"Going forward, it is on the advice of senior counsel the government will withdraw the matter currently before the Fair Work Commission," he said.
"I have agreed with the union today that we will start to commence rewriting the enterprise agreement which expired in May last year."
Mr Elliott said he has asked the union to return train services to the COVID-19 timetable which features an "enhanced" weekend timetable from tomorrow.
"Ideally that will return tomorrow, but of course I do understand the union needs to go back to the members and ensure they have the staff able at short notice to return to that timetable as soon as possible," Mr Elliott said.
The RBTU has responded to the government dropping the case, calling it a "dummy spit".
The decision to shut down the network by Transport NSW was reportedly due to "safety concerns", Mr Elliott advised today.
The RBTU has asked the government for the risk assessment used to justify shutting down the network.
"Running a safe rail network is our number one concern, so of course we asked the NSW Government to show us the risk assessment it supposedly used to justify its decision to shut down our trains on Monday," RTBU Secretary Alex Claassens said.
"If there's a safety issue, we need to know about it. We would never do anything that would put the safety of the network at risk.
"The NSW Government's dummy spit might be behind us now, but the reason we're in this situation still remains – the NSW Government is refusing to deliver an enterprise agreement that enshrines basic safety and employment conditions for rail workers and commuters."
Sydney was plunged into chaos yesterday as an eleventh-hour rail shutdown resulted in the cancellation of all train services, increasing demand for buses and resulting in clogged roads.
The blame game over the shutdown continued in today's press conference.
Mr Elliott said today he and Premier Dominic Perrottet found out about the decision by Transport for NSW to shut down the network at 4am on Monday.
"They only made the operational call at 12.43am, you can expect I wasn't sitting by my phone at 12.43am," Mr Elliott said.
"They advised the Premier and they believed the welfare and safety of communities was in danger.
"This is an operational matter and these operational decisions, the executive of any government department, would have the right to make a swift call if it's in the interest and safety of commuters and the workforce."
Mr Claassens called for the government "to fix the mess" and address workers' concerns.
"The NSW Government should be focused on fixing the mess it's made," he said.
"We need to see workers' concerns addressed and commuters get their trains back on track."
The union is seeking for the government to address wages, safety concerns, and the privatisation of train fleets.