Sydney Trains chief executive Howard Collins says the "ball is now in the court" of the boss of the biggest rail union to withdraw a strike threat so that major disruptions to rail services can be avoided from Thursday.

Despite offering what Mr Collins described as an "extremely generous offer" of a 3 per cent annual pay rise, both sides emerged at about 10.30pm on Monday night from more than 12 hours of negotiations without a deal.

Train services will be reduced if the industrial action takes place. Credit:Kate Geraghty

Rail Tram and Bus Union state secretary Alex Claassens said there were still a number of "outstanding issues we have concerns about" such as rostering conditions.

While both sides would return to emergency talks on Tuesday, Mr Claassens said an indefinite ban on overtime work from this Thursday, followed by a 24-hour strike on Monday, was still planned to go ahead.