Twenty-eight female guards were unfairly dismissed by a security company because the client‚ Metrora.
The chief executive of the Ventersdorp Hospital in the North West, Nontliziyo Thulo, has been accused of awarding hospital tenders to her boyfriend and giving a job to his son.
North West health department spokes-man Meisie Dintwe confirmed that Thulo had been suspended with full pay for alleged misconduct pending the outcome of an investigation.
She was suspended on May 23.
"At this stage we cannot divulge more details about Thulo's suspension," Dintwe said.
"All I can confirm is that she was suspended and that the department is investigating her."
The South African Democratic Nurses' Union (Sadnu) representative at the hospital, Simon Madikwane, accused Thulo of awarding catering tenders to her boyfriend and of giving the boyfriend's son a job as an administration clerk without going through an interview.
Sadnu national organiser Mohau Bodibe said Thulo was not the only hospital chief executive who was allegedly corrupt.
"We have been saying as Sadnu that there are other heads of government hospitals who are also corrupt and need to be axes."
Other sources at the hospital have also accused Thulo of awarding mortuary tenders to her boyfriend.
They said Thulo was suspended after hospital staff got fed up with the rampant nepotism and favouritism Thulo was displaying to her family and friends.