The case will have major implications for the $200 billion offshore construction sector which accounts for some $28 billion of economic activity.

Hundreds of overseas sourced workers in Australia's booming offshore oil and gas sector may now be designated illegal workers, and may be forced to down tools.

The MUA and the Australian Maritime Officers Union argued Cash’s decision in mid-2104 to grant work rights to offshore employees was unlawful, and subverted the wishes of the Parliament.

She took the controversial decision one day after the Senate rejected proposed changes to the Gillard Government’s Offshore Resources Act that would make it easier for offshore projects to attract and hire overseas labour.

The unions claimed employers would use cheap overseas labour and would not reasonable efforts to find Australian employees first.

MUA national secretary Paddy Crumlin said the unions did not have a problem with a temporary migration program that genuinely filled a gap in skills if it properly engaged in market testing.

“This has clearly not been about skills shortages – what we’ve seen is hugely profitable companies operating in the offshore looking to import overseas workers on cheap rates of pay, who don’t have to pay tax in Australia and with no security checks or Australian-approved skills sets when we have hundreds of highly qualified and experienced seafarers who are ready to work and pay their taxes instead on unemployment benefits,” Crumlin said.

He said the government should have prepared for a loss in the courts, as the case probed previously untested limits of ministerial power.

“The Abbott government has clearly outlined their agenda for employment in this important segment of our economy without regard to existing employment law or consequence,” Crumlin said.

"Firstly they ignored the intention of the Offshore Resources Act which offers labour market testing and appropriate protections for Australian workers, then they overrode the Senate when it offered a view they didn’t like.

“At no stage have they tried to sit down with unions or Senators to try to find a way through – they simply acted in accordance with the wishes of the big business interests dominating the leasing of our national hydrocarbon assets.

“They were fully prepared to have taxpayers foot the bill for the incompetence that cloaked their political sycophancy and prejudice.”

He said the Federal Court had restored faith and stability in the employment laws protecting ordinary Australians.

“This entire episode merely adds to the appearance to our international markets of a chaotic, dysfunctional government in what is an essential and highly efficient and productive Australian workforce and industry,” he said.

ICN sister publication Energy News understands the Commonwealth may have prepared a temporary legal instrument to give the employees protection and allow them to remain insured, while it considers an appeal to the High Court.

Peak body APPEA has been contacted for comment, but a spokesperson said the organisation was focused on prosecuting the organisation’s case in the New South Wales election this weekend, which could settle the fate of the NSW CSG sector.

APPEA has previously told restive anti-fracking groups that they should accept umpire’s decision when it was handed down.

Senator Cash’s office was still formulating a response as Energy News went to press.