Workers snapped when they found sneak photographs taken of them on their tea breaks.
The discovery prompted about 100 men working for the company Crown House to down tools on the multi-million pound extension to Middlesbrough's James Cook University Hospital.
Union officials persuaded the men to return to work and after "lengthy" discussion bosses handed over the photographs for the workers to destroy.
A spokeswoman for Crown House said yesterday: "They have gone back to work. It's all over.
"They came out on Friday over some photographs taken during the tea breaks which they were not happy about.
"We arranged some talks and the situation has now been resolved. Basically, the photographs should never have been taken.
"They will be destroyed - given back to the men. We are now looking forward to good relations."
Each of the workers has been given a payment of £65 for last Friday afternoon, when the dispute started, but could not be registered as an official dispute, because members of the management team who were versed in official procedures were not on site.
South Tees Hospitals NHS Trust said the row over the photographs was an internal matter between the contractors and their employees, and did not involve the trust.
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