Commuters face another day of major disruption on Wednesday and the situation could drag on until the end of the week.
Sydney Trains advised on Wednesday services would run every 30 minutes on most of the Sydney network, and every hour for intercity journeys.
"Services may be less frequent and trips may take longer than usual," a social media post said. "A limited amount of buses have also been arranged Please limit travel where possible and use alternative modes of transport."
Only a quarter of normal services operated on Tuesday.
The Rail Tram and Bus Union will continue (RTBU) is continuing with partial work bans while awaiting a formal response from the state government on a new enterprise agreement which will be put to members.
The government withdrew its case before the Fair Work Commission on Tuesday and agreed to begin rewriting the enterprise agreement.
Transport Minister David Elliott said he hoped services would return to an "enhanced weekend timetable" over the next few days, ideally on Wednesday.
Rail Tram and Bus Union NSW secretary Alex Claassens said he was confident ongoing talks between the union and government would result in the scheduled return of the pre-COVID weekday timetable going ahead from next Monday.
A statement from the union on Tuesday said members "are happy to be back doing what they do best today, working trains, after being subject to a disrespectful display of government chaos and deception yesterday".
"As members of the public will be aware, trains are back up and running today and the 'safety concerns' that the government used as reasoning to shut down the railways have magically vanished (even with such inclement weather). Our partial work bans are exactly the same today as they would have been yesterday.
"For full transparency, and keeping in mind that the employers have now admitted in the media that it was not a strike but a choice from the top to not run trains yesterday:
"Our barrister asked the NSW Government yesterday at midday to provide a copy of the risk assessment they relied on to shut the network down. During the course of the day in the Commission, we asked three more times for the risk assessment, each time met with delay and obfuscation.
"This morning at around 10am, we issued a subpoena for the production of the risk assessment ahead of the hearing planned for tomorrow morning. With the risk assessment, we demanded the production of the metadata to discover when the risk assessment was actually produced.
"By 11am, it was all over. The lawyers for the government wrote to us to advise that the Fair Work Commission applications would be withdrawn. Our industrial action stands and members win.
"We congratulate every single RTBU member for standing strong yesterday and showing up for their fellow members and the community while being subject to vile Government attacks. During this entire bargaining campaign we have been fighting for clean, safe and public railways, and we will continue to stand together and fight for these things for both our members and passengers alike."