State Superior Court Judge Patricia Costello delayed ruling on the dispute until Tuesday. About 50 workers had faced layoffs Friday.
A lawsuit filed Thursday on behalf of workers' unions claims the city hasn't conducted meaningful negotiations since October.
Orange Mayor Eldridge Hawkins Jr. said the layoffs were prompted by a $6.4 million budget deficit. Ten police officers face layoffs and 16 supervisors face demotion. The police department has roughly 100 employees.
A total of 12 firefighters face layoffs or demotion. Additional layoffs would be spread around other city departments.
Hawkins said concessions from the unions are needed to save jobs.