Twenty-eight female guards were unfairly dismissed by a security company because the client‚ Metrora.
Twelve pensioners were incinerated in KwaBadala Old Age Home in Inkandla on Tuesday night.
The inferno was too fierce for the emergency rescue team to reach them after they battled for hours to douse the raging flames.
The fire engulfed the home and the trapped pensioners were burnt beyond recognition.
The horror began when the elders were preparing to go to bed shortly after 6pm.
Provincial MEC for social development Meshack Hadebe said victims were mainly wheelchair-bound elders who could not escape the fire.
The pensioners were apparently trapped in the inferno behind locked burglar bars which were later ripped open.
It is not yet clear what caused the fire but it's suspected that it might have been triggered by an electrical fault.
The emergency and rescue team battled for hours to extinguish the fire and save the frail lives.
Four pensioners who survived were rushed to a local hospital to receive treatment for smoke inhalation and burns.
"It was the most horrible sight I have ever seen. You can imagine - old people, crying for help and trying to run for their lives, but they couldn't.
"It's just a disaster. It's very devastating and people working in the centre are traumatised," Hadebe said.
Some of the employees received counselling yesterday.
Hadebe said workers in the centre could not do anything because there were no emergency tools, such as fire extinguishers.
"Hearing someone crying for help and you cannot provide it, will haunt them for a long time. It's not their fault," he said.
The home accommodated about 40 elderly people, most of whom had no relatives.
Hadebe said his department was organising a memorial service and would bear the funeral costs.