Seome Walter Satekge, fired from his job as the provincial traffic department's general manager of roads and transport, has been reinstated.
Satekge will return to work within 14 days.
He was fired last year for allegedly defying instructions and approving a R2million tender to build guest houses at the Manenu Traffic College in Venda.
The department said it could not afford the project
Satekge was hauled before a disciplinary hearing and was fired.
He was also accused of buying speed cameras without permission.
After being dismissed in September, he approached the South African Police Union, which took the matter to the General Public Small Sectoral Bargaining Council to challenge the decision.
Sapu argued that the dismissal was unfair because Satekge had no authority to approve projects, which was the responsibility of the then head of department, Ben Mehale, who was also dismissed in 2007.
Arbitrator Kaizer Makwela ordered that Satekge be reinstated within 14 days.