Victorian teachers have had a legal victory after the Federal Court ruled in favour of their planned strike action.
But the court a short time ago ruled that the strike can go ahead.
Victoria's teachers are engaged in work bans and stoppages and are planning to walk off the job next Thursday.
They want a 12.5 per cent pay rise over three years, but the Government is offering them 2.5 per cent annually.
The Government argued that the Fair Work Act does not apply in this case because the state has legal power to determine the number of teachers it employs and the conditions they work under.
Justice Christopher Jessup threw out the Government's application ruling that the teachers' action was not unlawful and would be protected.
He criticised the state's action saying that if it disagreed with the Act on constitutional grounds, it should have applied to have it defined years ago.
In a statement a short time ago, the Victorian Government expressed its disappointment with the decision.
The statement says the state shares the frustration of students and their parents at the ongoing disruption being caused by the by the Australian Education Union (AEU) and the Community and Public Sector Union.
It says that to date, the AEU has continued to reject the Government's efforts to make Victoria's best teachers the highest paid in Australia.
It says the AEU's latest proposal, if not matched by productivity offsets, remains way beyond Government wages policy and is unsustainable.
The Education union's Meredith Peace says the government's legal action was a distraction.
"It was an attempt by the government to stonewall further negotiations that have gone on now for over 17 months," she said.
"That's simply not good enough, it is a waste of taxpayers' money.
"We are focussed on negotiations, that's where this dispute will be resolved and we call on the government to show that same commitment."
The Premier has told the Parliament the Government still plans to pursue the union in court.
"It's costing everybody, and we make no apology for pursuing what we believe is unlawful activity," he said.
Departmental negotiators will continue to hold meetings with the AEU.