Sydney rail strike cancelled amid wage negotiations but business leader says 'some damage has been done'

A two-week deadline set to resolve an industrial dispute between the NSW government and rail union has provided what may be only momentary relief to commuters and businesses forced to make alternate arrangements, with the potential of further disruption still possible.

Premier Chris Minns said the government agreed to run as many 24-hour rail services as possible this weekend on Sydney trains in exchange for the strike to be called off to allow time for two weeks of intensive negotiations with the Rail, Tram and Bus Union (RTBU).

But this may not be the last Sydneysiders will see of strike threats on public transport.

The economic impact of the Sydney trains strike saga

Despite the strike not going ahead, many workplaces across the city had already asked their white collar employees to work from home on Friday where possible.

For consumers, some may have arranged alternative plans to no longer visit retail hubs on the weekend or other parts of Sydney for fear of limited public transport and congested roads.

Paul Nicolaou, executive director of Business Sydney, acknowledged the impact would have been worse if the strike had proceeded, though for small businesses, "some of the damage has already been done".

"A lot of businesses have told their staff to work from home because of the uncertainty," he said.

"I can tell you a lot of cafes, restaurants, clubs and pubs have told me that a lot of people have cancelled their bookings and their catering, and that's a huge impact."

Mr Nicolaou added that after a year of increased costs, the last thing businesses needed was train services to be halted leading up to Christmas.

"We've got a lot of major events happening this weekend, and they would have all suffered as a result of the train strike.

"This is where it is really concerning that the union wants to take part in this type of activity."

What happens after the fortnight of negotiation

Over the next two weeks, negotiations for rail workers' pay and working conditions will be on the table.

Mr Minns said he hoped to achieve a long-term agreement soon and for strike threats to end.

But he also noted on Thursday that he "can't give that guarantee".

Transport Minister Jo Haylen said she was confident of an outcome by Christmas.

"We've made good progress and I'm really pleased about the constructive, genuine good faith way that the unions have agreed and negotiated," Ms Haylen said.

"That has resulted in a section of the process being resolved, now we are down to some of the other elements including wages. This is an ongoing process."

RTBU NSW secretary Toby Warnes said he was also "confident … that we will reach a deal".

"We're going to sit down in a room, sit with Treasury, the ones who make the decision about where money is allocated," he said.

"We're going to figure out whether there is a point in time when we can get to an agreement."

In the meantime though, business leaders said they will wait in anticipation.

"We still need to ensure that over the next two weeks, when the government is trying to sort out an agreement, that this puts this whole matter to bed," Mr Nicolaou said.

"If they don't resolve it, this is going to be problematic for a lot of small- and medium-sized businesses, and we may even see job losses."