By Neve Brissenden and Luke Costin in Sydney

The spirit of Christmas is being upheld by the rail union and a state government after they decided to put their bickering aside and not spoil Sydney’s holiday festivities.

Revellers had been worried about the threatened cancellation of Sydney’s New Year’s Eve fireworks due to an ongoing wage battle between the Rail, Tram and Bus Union and the NSW government.

An 11th-hour Christmas Eve hearing fizzled out on Tuesday morning, with the Fair Work Commission agreeing the union had dropped enough action for there to be a negligible risk to the New Year’s celebrations.

Despite threatening action throughout the holiday period, the NSW branch of the union dropped eight major work bans late on Monday.

A lawyer for Sydney Trains requested a half-hour private meeting with the parties at the hearing before the industrial umpire on Monday, saying there had been “encouraging discussions” overnight.

The media and member of the public were removed while the parties deliberated.

The commission returned at 10am, with the matter seemingly resolved without much interference from Fair Work Commission Deputy President Bryce Cross.

The union agreed to drop a solidarity action and one other by the Electrical Trades Union to ensure public safety over the holidays.

The union had cast the last-minute changes as necessary to help ward off actions to “effectively crush” its bargaining strategy.

It means New Year’s Eve revellers and the businesses reliant on them no longer need to eagerly await the industrial umpire’s call on potentially crippling train delays and cancellations.

Pub and bar operators, a casino and the NSW Labor government had planned to argue on Tuesday that train driver work bans planned for New Year’s would cause significant harm to third parties and potentially endanger life.

The hearing at the commission cames after NSW Police warned of “grave concerns” for safety if one million people expected to line Sydney Harbour on New year’s Even struggled to leave after the midnight fireworks.

Organisers say the fireworks are watched by another 400 million people globally.

The event delivers an economic benefit of about $280 million for the city.

New Year’s Eve also doubles as the busiest day on Australia’s largest rail network with rare all-night running shuttling people across the state.

Some 3200 services run about every five minutes throughout the day, with crunch time coming in the hour after midnight as the masses try to leave together.

The union and government have been poles apart after seven months of pay negotiations.

Workers continue to demand four annual wage increases of eight per cent but Premier Chris Minns has said that’s unaffordable and can’t happen while he is denying nurses a similarly costly claim.

The state government has offered 11 per cent across three years, including superannuation increases.

The saga could drag on for several more months.

The Fair Work Commission cannot be asked to settle the substantive dispute – pay and conditions – until February.