Twenty-eight female guards were unfairly dismissed by a security company because the client‚ Metrora.
Mpumalanga's Ehlanzeni district municipality has suspended its manager Hugh Mbatha on allegations of misconduct and corruption.
The council decision was taken last week. The municipality will also conduct its own investigation into the allegations.
A one-paragraph statement did not give details about the misconduct and corruption allegations.
Municipal spokesman Mabutho Sithole referred questions to mayor Khosi Mkhonto, who refused to elaborate.
"We cannot go into details about the allegations until the investigation is concluded," he said.
Mkhonto said the investigation would not take longer than 90 days and, if implicated, Mbatha could be charged.
Mbatha is accused of not cooperating with senior managers. He was seconded to the municipality in 2005 when it was riddled with scandals and financial problems.
Sources on the mayoral committee said Mbatha had been accused of not having experience in running a municipality.
Sowetan has learnt Mbatha was allegedly being "victimised" for refusing to take orders from the mayor on tenders and jobs.
Mbatha introduced control measures on abuse of council facilities, limited cellphone allowances and bursaries. Last month a local newspaper reported Mbatha was suspended because he was unpopular with ANC leaders.