Fiji's Ministry of Employment said in a statement despite its exhaustive efforts to mediate between Air Terminal Services and employees who participated in an unlawful strike, no resolution had been reached.
The ministry said as a result it had to defer to the decision of ATS management to suspend the employees.
The firm provides baggage, catering and engineering services at the airport in Nadi.
More than 200 of the company's staff have been off work since 16 December, saying they were locked out for attending a meeting, but ATS maintains the gathering amounts to illegal strike action.
The ministry said ample opportunity had been provided to resolve grievances and discuss a way forward but after two weeks of informal mediation, no resolution had been reached.
The government said if the matter remained unresolved, a formal conflict resolution mechanism was available.
"In the interest of resolving outstanding issues as quickly and effectively as possible, the Minister for Employment has encouraged ATS management and the Federated Airlines Staff to engage in good faith within established conflict resolution frameworks, as set out in the ERA 2007," said the statement.
ATS workers want job security
Earlier the secretary of the ATS Employees Trust, Vili Finau, said the staff would return to work once they were guaranteed they would not be punished for being off the job.
Mr Finau said a handful of staff had returned to work but he said the remainder would not return if they continued to be victimised.
"The management claims that employees are welcome to go back to work without any conditions and there will be no victimisation but unfortunately we are hearing from inside that that is not correct," he said.
"Staff have been told that they will not receive any promotions, they are basically being victimised, contrary to what they are saying."
Vili Finau said once workers returned then discussions could begin on issues such as salaries not increasing to match the cost of living and the potential sale of the trust's shares.
The trust is responsible for ATS employees' 49 percent shareholding in ATS, majority owned by the government.
Photo Fiji Times. Caption: Protesting workers meet with the Minister for Labour, Jone Usamate (centre)