Sydney commuters have been warned to avoid non-emergency rail travel in the case of delays and hundreds of service cancellations, a compensation negotiation between the train union and the state government.

State Transportation Secretary John Graham said the network was in a state of major damage. "We've canceled more than 350 services this morning, which has had a big impact on the entire network," he told Sydney 2GB on Friday.

A NSW government spokesman said the union asked each railway worker who negotiated at a large scale "in the last hour" to pay a $4,500 bonus. But Toby Warnes, secretary of the NSW Railway, Tram and Bus Union (RTBU), later called the claim "totally incorrect".

"After a lot of negotiations over the past few days, the last hour union demanded a $4,500 bonus for each rail worker. This was never part of our offer, nor was it a trade union's counter offer." A government spokesman on Friday said in the morning's statement.

“So the union instructed the driver not to show up for work today.”

But Vaunes said the payment was "an existing rights contained in the enterprise agreement" and "nothing new at all."

“The NSW government’s claim that it is totally untrue that rail workers pay extra payments to the portfolio.”

The RTBU warned Thursday night that trains travel 23 kilometers slower than usual in areas with speed limits of more than 80 km/hr as part of protected industrial action.

Warnes said in a press conference Friday morning that the delays across the network were “totally attributed to the government’s government issuance last Friday, a statewide 5,000 personal shutdown notice to train crews” .

The purpose of the notices is to take effect on Wednesday and postpone by the government at midnight to reach an agreement, and then take effect again overnight on Thursday, “after the negotiations are over.”

“So we have staff members who show up today, risk not getting government salaries, or we have workers who choose not to work today because of these lockdown notices.”

Asked how long the delay might last, he added: “No one can predict the extent of damage this will result.”

A NSW government spokesman said: "There is a fair and reasonable salary on the table".

“We can’t say “yes” to the railway union and say no to the nurse.”

They said the government is looking at “all of our options, including emergency legal proceedings.”

NSW's Transport said in a media release that negotiations on the new business agreement are still going on ahead of the next Fair Work Commission hearing.

They said yesterday that train union drivers may run the train at a slowdown “but the normal train schedule will continue to operate”.

“Although we expect minimal disruption, the consequences of industrial action may be unpredictable.”

- With the Australian Associated Press