Former NSW deputy premier John Barilaro has been temporarily blocked from taking up a taxpayer-funded job in New York City.

Last week the government announced Mr Barilaro had been appointed as the state’s senior trade and investment commissioner to the Americas, one of six roles the ex-Nationals leader created while trade minister.

Labor accused the government of giving out “jobs for mates” over the $500,000 appointment, and launched an upper house inquiry to investigate the process. 

Labor moved a motion in parliament on Wednesday to halt the appointment until an inquiry has been completed and reported its findings.

The motion passed 20 to 18.

Mr Barilaro had been expected to relocate to New York City within months.

The motion was supported by the Greens and Independent MP Justin Field, and opposed by the government and One Nation.

Deputy leader of the upper house Sarah Mitchell spoke against the motion.

“The government rejects in the strongest possible terms that the appointment of Mr Barilaro was, as quoted in media outlets, a ‘captain’s pick’ or a unilateral decision of the premier or any other minister of this government,” she said.

Labor criticised the appointment process, saying it should have been approved by cabinet.

“I am genuinely surprised that it didn’t go to cabinet,” Ms Sharpe told AAP.

The parliamentary inquiry will investigate if a deal was done and will scrutinise the work done by recruitment firms to fill the roles, with the possibility Mr Barilaro could be called to give evidence.

Earlier, Premier Dominic Perrottet said Mr Barilaro had been appointed the role through an “independent process”.

The premier said he was told during the recruitment process, which began in March last year, that the secretary of the department felt no one suited the role.

“A second appointment process by the department was established, an independent process, that recommended the former deputy premier as the preferred candidate,” Mr Perrottet told reporters on Wednesday.

The premier said he had also spoken with Investment Minister Stuart Ayres on Wednesday “to get further information in relation to background and timeline in relation to those matters”.

Documents reveal four people were considered for the New York-based role during the recruitment process before two were shortlisted.

One applicant, Jenny West, was told in August by then-premier Gladys Berejiklian she had the job, The Guardian reported on Wednesday.

She was later told the offer had been rescinded and was paid a substantial settlement, it said.

Mr Barilaro resigned from parliament the following month, days after the resignation of Ms Berejiklian.

Mr Perrottet disputed claims Ms West was offered the role, but said he would “get that clarified”.

He denied reports Mr Barilaro’s appointment was “a captain’s pick”.

“That is not true,” the premier said.

“These were public service decisions through an independent process.

“I have received no information that there was any challenge, there were any issues here in relation to the recruitment process, the panel’s recommendation, and the appointment by the public service of Mr Barilaro to that role.”

The premier earlier told ABC radio he would “take action” if there “were not good reasons” behind the decision to appoint Mr Barilaro.