The Eastern Cape department of health has been ordered to reinstate Livingstone Hospital's entire management team and pay them millions in damages.
This follows an arbitration hearing that found their suspensions to have been "hopelessly bungled" and unfair.
In response to the judgment, trade union Nehawu has threatened to strike if the managers are allowed back at their posts.
Commissioner Clarence Randall ruled at the arbitration hearing that the suspensions of Livingstone's CEO Thulane Madonsela, human resources director Victor Tobo, finance director Michael Byrnes, nursing services manager Ronel du Preez, senior manager for medical services Dr Mojalefa Maseloa, and manager for soft services - including hospital security - Mcebisi Gcotana were more punitive than precautionary.
He said there was no basis for the department to have suspended the managers for such a prolonged period - more than three months.
He ordered the department to pay each of them six months of their respective salaries as damages for the "continuing unfairness" and damage to their reputation caused by the suspensions.
He ordered the managers to return to work on Monday February 25.
Considering suspension
On November 7 the managers received a letter from the department of health's superintendent-general Thobile Mbengashe stating that he was considering placing them on suspension during an investigation into allegations of misconduct.
This followed an unprotected strike by organised labour at the hospital, which had been preceded by the arrest of more than 80 staff members for theft.
The managers then requested special leave as they were promised that an investigation into allegations of fraud and corruption made by unions would be investigated within three weeks.
Mbengashe approved their leave but the next day reversed his decision and placed them on precautionary suspension instead.
The managers claimed they had only ever received a letter with vague allegations from Mbengashe. They said they were only given two hours to respond before being suspended the next day.
Randall said in his findings the department had also failed to share any details of the investigation with the arbitration hearing.
"[There are] no further details regarding the progress of the investigation, who is conducting the investigation, why the investigation was not completed by November 26 2018," Randall said.
He said the department also failed to hold a suspension hearing within 60 days after the managers were suspended.
Eastern Cape department of health spokesman Lwandile Sicwetsha is yet to respond to a request for comment.