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Mafumo was arrested on March 13 after a member of the South African Municipal Workers Union (Samwu), Dineo Mathebula, had opened a case of common assault against him.
Mathebula had alleged that Mafumo had assaulted her during a strike by members of Samwu.
The union had called for the removal of Mopani district municipality manager Tim Maake.
The workers had accused Maake of maladministration, nepotism and running the municipality like a spaza shop.
Magistrate Norman Ramashia dismissed the case because Mathebula had told the court that Mafumo assaulted her and broke her right hand. But Ramashia said Mathebula had used "the injured hand to bang the court table" and he dismissed the case.