Midvaal municipality workers in the Vaal area in Gauteng were back at work after downing tools for a day, the municipal manager said on Friday.
Albert de Klerk said a few employees protested on Thursday but had returned to work on Friday.
Employees picketed outside the municipality to protest against an apparent racial slur by a municipal official.
A senior manager at the municipality is accused of calling black protesting employees "kaffirs" during a strike last year.
Hendrik Brits is facing a disciplinary hearing.
De Klerk said the case was set down for Thursday but was expected to continue next week on Wednesday.
He said the postponement was granted to allow for more witnesses to come forward.
De Klerk said the municipality would not allow for any racist behaviour.
The Democratic Alliance retained control of the Midvaal region during last year's local government elections, defeating the African National Congress' attempts to win it back.
Last month, the Gauteng government applied to merge the region with Emfuleni, which would mean the DA would no longer have control of the region.