The decision is expected to affect thousands of teachers, police, paramedics, nurses, public hospital salaried doctors and council workers.

NSW Treasury and the Department of Justice have released a briefing paper that says the NSW government will integrate the Industrial Court with the NSW Supreme Court.

The Industrial Relations Commission's judicial functions will be transferred to Supreme Court judges in the common law division. But the IRC will continue to perform non-judicial functions including conciliation, arbitration, award and agreement making.

The IRC's last remaining judge, president Michael Walton, will be appointed as a judge in the Supreme Court. A new chief commissioner will be appointed to the IRC to lead and manage the commission.

Alex Grayson, a senior associate who manages the Employment and Industrial Relations Practice of Maurice Blackburn Lawyers in Sydney, said she was concerned access to justice would diminish under the new arrangement. She said it was more intimidating and costly starting litigation in the Supreme Court.

"This jurisdiction is about individuals seeking to litigate matters in relation to their employment," Ms Grayson said.

"I think there is a psychological barrier just associated with the name of the Supreme Court.

"I also think there may be an access-to-justice issue on fees because the Industrial Relations Court has always been a low-fee or no-free jurisdiction and the Supreme Court has comparatively high fees."

Ms Grayson said various governments have "winnowed away" at the Industrial Court's jurisdiction.

"State government and local government employees are essentially the only employees left in the jurisdiction because powers have been referred to the Commonwealth jurisdiction," she said.

The government briefing document says the Industrial Court's workload has "decreased significantly in recent years". Only 37 matters were commenced in the court last year, compared with 766 in 2005.

"There is now insufficient work to fully occupy the one remaining judicial member of the court," the government paper says.

"Integrating the Industrial Court with the Supreme Court will allow existing Supreme Court judges to hear matters as demand requires.

"There will be efficiencies of scale associated with handling matters under the larger jurisdiction of the Supreme Court."

NSW opposition spokesman for industrial relations Adam Searle said the change was "just another step towards diminishing an important institution that has protected working people in this state for over a century".

He said it would affect thousands of public servants including teachers, police, nurses and paramedics.

"The Supreme Court and its processes are more formal and legalistic and intimidating. Abolishing the Industrial Court and placing its work into the Supreme Court will make justice less accessible to regular working people," he said.

"The Baird government's excuse for doing this – the reduction in the work for the court – had been caused by the actions of this government, by taking away work safety prosecutions.

"There is plenty of work under state law that could keep the court fully occupied, only the government doesn't want institutions dedicated to looking after working people."

Unions NSW secretary Mark Morey said the Baird government was removing an institution that specialises in industrial relations law.

"Instead we will now see industrial matters dealt with by judges who are more used to dealing with commercial or criminal matters," he said.

"It will be slower, more unwieldy and ultimately, more costly."

NSW Greens MP David Shoebridge said the change would affect public servants seeking legal remedies to workplace disputes.

"This is killing a specialist industrial tribunal through death by a thousand cuts," he said.

"I think it's time we had a new employment workers compensation and employment discrimination tribunal as a division of NCAT (NSW Civil and Administrative Tribunal)."

A NSW government spokeswoman said the government has started "a targeted consultation on its plan to move the judicial function of the NSW Industrial Relations Commission to the Supreme Court".

"Key stakeholders have been briefed on the details and asked for comment to inform draft legislation."