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Wellington Regional Chamber of Commerce has waded into the pay dispute between bus drivers and their employers GO Wellington and has urged them to resolve the issue for the good of the city.

About 300 drivers were locked out this morning after the company responded to an hour-long strike during yesterday morning's rush hour and threats of further strike action.

It resulted in thousands of commuters being late for work this morning and traffic chaos as workers took their cars.

GO Wellington has said the lockout would continue until Tramway Union members withdrew their strike notice, while the union said it would only withdraw their notice after the lockout was lifted.

"This industrial action has caused considerable disruption to commerce in the city with employees arriving late for work and increased congestion reducing the efficiency of the transport network," chamber chief executive Charles Finny said today.

"The cost of this dispute is being felt more widely than the two parties concerned.

"The loss of productivity and the damage to Wellington's reputation as a smoothly running city will impact on us all."

Mr Finny said the dispute had come at a bad time as Wellington was about to play host to visitors coming to see the World of WearableArt (crrt) show.

"It is also unfortunate that Nick Kelly and his Tramway's Workers Union have chosen to launch their industrial action during term time.

"Disruption would have been minimised had it occurred just a week later in the school holidays. The targeting of school children as they are preparing for their end of year exams is a particularly low blow."

He added the dispute also sent a negative message to new commuters who had recently decided to give public transport a go because of high fuel prices.

"We urge both parties to come together and resolve this dispute for the good of the city as a whole," Mr Finny said.

Tramways Union secretary Kevin O'Sullivan said the drivers' base pay rate of $12.72 an hour was unacceptable in light of today's living costs and that roster cuts had seen their real incomes reduced 19 per cent in recent years.

GO Wellington general manager Bruce Kenyon said management had worked hard to try and resolve the issue, including offering a 7 per cent pay increase, and was disappointed the decision was made to strike.

Once penal rates, allowances and the 7 per cent offer were taken into account, drivers' hourly wage would equate to $19.41, GO Wellington said.

A small number of privately owned bus companies in the greater Wellington region were not involved in the action and would continue to operate as usual.

- NZPA