D.C. department of human resources director Albert P. Russo has overturned a lower-level decision to fire an outspoken DHR worker who refused assignments that he claimed were illegal.

Benjamin H. Johnson III, a nine-year city employee assigned to DHR's payments assistance administration (PAA), has been restored to his $16,800-a-year, GS-9 position.

Charges of insubordination, neglect of duty and impeding government efficiency, brought against Johnson last June, have been dropped, Russo said.

Johnson also has been compensated for 14 days of unpaid suspension that he was penalized in 1975, in exchange for his agreement to accept future work assignments, Russo said. He said he made his decision to avoid "bureaucratic arrogance."

Johnson set himself apart from other dissatisifed DHR employees through a tenacious four-year fight against what he termed "waste, inefficiency and incompetence" in the payments assistance unit.

Johnson wrote frequent memoranda and letters to his supervisors in DHR, to Mayor Walter E. Washington and to City Council members. He wrote to congressmen and senators and to two-presidents.

"Incompetence, ignorance, lack of initiative . . . are very muchin vogue" in PAA, Johnson said in a letter to President Carter in February. "Over half the staff is late for work every day."

He complained that workers shortchanged citizens and spent inordinate amounts of office time on personal phone calls, snacks at their desks and gossip. He summed up the cause of such behavior as poor management and ineffective use of staff due to lack of proper job classifications.

It became a personal matter for Johnson in April, when he refused to process public assistance applications. His job description as a Medicaid eligibility worker had not changed since 1968, and for that reason he was not going to handle other kinds of cases, he said.

Johnson said he was thereafter told to perform no duties. His supervisors said he was insubordinate, neglectful of his duties and an impediment to the government. He was informed that he would be terminated from DHR as of August 12.

Johnson contended, as he had in dozens of letters, that "the jobs misclassification situation . . . is horrendous" and has resulted in "morale and error-rate problems."

Two days before his dismissal was effective, Johnson's lawyer arranged a meeting with Russo, who decided to override Johnson's supervisors.

Johnson "was certainly right on that part of the issue," Russo said. "He did not have a current, valid job description." Russo did not comment on Johnson's long-standing criticisms of management.

Johnson said he found Russo's consideration of his case and the subsequent decision "truly humanitarian," although some of his broader concerns about management reamin. Some of Johnson's less vociferous co-workers, who supported him privately all along, agreed.

"I'm glad to see that Ben is still around and not on the unemployment line," one employee said, "but the problems that precipitated (the dismissal notice) are still there."