Work bans and strikes have been threatened from December 28 after a large majority of 8000 NSW rail workers voted to take industrial action.
The post-Christmas actions will come during protracted wage negotiations as workers demand a rise of 36 per cent over four years - more than three times the state government's three-year offer.
Commuters were told on Tuesday that industrial action during Sydney's famed New Year's Eve fireworks display - the train network's busiest day - was "intolerable".
More than a million people typically line the harbour foreshore for the annual event, while many more travel elsewhere in the city for end-of-year celebrations.
"Any level of industrial action during this time is not acceptable," Transport Minister Jo Haylen told reporters.
"We need to be able to run those thousands of services to move the millions of people that need to get in and out of our city."
Commuters could be left stranded on New Year's Eve - the busiest day on Sydney's rail network. (Steven Saphore/AAP PHOTOS)
Treasurer Daniel Mookhey, himself a former Rail, Tram and Bus Union official, urged the union to accept the "reasonable offer" on the table.
He declined to say what the offer was, besides implying it was higher than the state's proposed 11 per cent over three years.
"We've made a reasonable offer and showed multiple ways that can be realised," he told reporters at Martin Place station in Sydney's CBD.
Just out of earshot stood union leadership awaiting their own chance to address the media.
Government and worker representatives were also before the Fair Work Commission on Tuesday, a day after Labor dragged the union to Federal Court to halt plans for pre-Christmas industrial action.
Business groups say just the threat of further industrial action is predicted to change travel plans and reduce spending, spelling doom for struggling firms.
"If this strike goes ahead, some businesses will experience bankruptcy," Business NSW chief executive Dan Hunter said.
Mark Speakman has lashed the Labor government and unions for failing to reach a resolution. (Bianca De Marchi/AAP PHOTOS)
Opposition Leader Mark Speakman dubbed the latest plans "extraordinarily selfish".
"This Christmas, they've managed to gift-wrap chaos for the people of NSW,'" he said.
"Instead of resolving disputes and protecting commuters, (Premier) Chris Minns has been asleep at the wheel, leaving families stranded during what should be the happiest time of the year."
The Minns government and various unions representing rail workers have been at loggerheads for months, failing to resolve their differences through two weeks of intense negotiations at the start of December.
The premier has said he can't agree to the unions' demand while denying the claims of nurses and other frontline workers.
Nurses want an immediate 15 per cent jump in pay, while police in November accepted an average rise of 26 per cent with an overhaul of their pay scales.
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