The Fair Work Commission has overturned a ban on compulsory redundancies which will allow Essential Energy to slash 600 jobs by 2018.

The Commission said there is "no avoiding" the adverse impact that job cuts would have on families or the loss of specialist skills in rural communities. The economic imperative to minimise electricity costs to consumers could not be avoided because the government run electricity distributor was a business and "not a social service".

"In circumstances where Essential Energy, although government-owned, is required to operate as a business producing commercial rates of return rather than as a social service, and is subject to a regulatory regime which forces reductions in its revenue in order to minimise electricity costs to the consumer, it seems to us that a significant reduction in the size and cost of Essential Energy's workforce has become inescapable," the Commission said. "To maintain a prohibition on involuntary redundancies in those circumstances would simply be a denial of reality."

The Electrical Trades Union wrote to Mr Barilaro, who is deputy premier, to ask for his intervention, but he said the job cuts were a matter for Essential Energy and the Fair Work Commission.

He said the NSW government shared Essential Energy's objective to provide a "safe and reliable supply of electricity, at the lowest sustainable cost for the state's households and businesses".

While lower cost electricity was good for households and businesses, Mr Barilaro said he was "concerned about the impact on employees across regional NSW".

"I note that no final decision has been made by Essential Energy, however, should the company decide to proceed with changes to its workforce the NSW government will work with employees and industry to ensure impacts on the workforce are managed in a sensitive and orderly way," he said.

The government would offer fee-free training to support sacked workers. ​

The ETU said Essential Energy plans to axe 600 jobs by July 2018 and up to 1000 more in 2019.

ETU deputy secretary Dave McKinley said he had asked for Mr Barilaro's intervention to protect regional communities from the job cuts because Essential Energy is still owned and controlled by the NSW government.

"National Party MP's have in the past attended Essential Energy depots around the state telling staff their jobs were safe under the National Party," Mr McKinley said.

"This false hope has contributed to our members' distress and I believe it is now time for the NSW National Party to stand up and demonstrate that the NSW Nationals will in fact protect regional jobs at Essential Energy."

Essential Energy chief executive officer John Cleland said employees, other than 30 whose roles had already been made redundant, would not lose their jobs before Christmas.

He said the Fair Work Commission decision would provide greater flexibility to reform the Essential Energy business in response to "changing customer expectations and a rapidly evolving energy sector".