Robotics technician Farida Khanum, 21, was bullied by other workers at a Luton car plant, one of whom mockingly put a cloth over his head and referred to her as "Yasser Arafat".
A manager at IBC Vehicles, a subsidiary of General Motors, told her: "I can't have you walking around like that on my shop floor." Another worker asked: "Is that a new hard hat you're wearing then?"
Yesterday, an industrial tribunal in Bedford ruled that Ms Khanum had been unfairly dismissed and said there had been "a culture of discrimination" at IBC. The tribunal rejected IBC's claim that Miss Khanum had defrauded the company by taking uncertified time off to attend an open morning at the University of Hertfordshire.
It accepted her assertion that her dismissal stemmed from her decision to wear the hijab, a head-covering, in line with Islamic modesty requirements. Ms Khanum, whose parents are Bangladeshi, decided to wear the hijab after arriving home from the umra, or lesser pilgrimage, in September 1996. She was sacked three months later.
She was never given the option of a possible compromise, such as wearing some form of hairnet.
Ms Khanum had begun working for IBC, which makes parts for the Vauxhall Frontera, on leaving school in 1993. She achieved the highest exam grades among the IBC apprentices in 1995.
The tribunal found that IBC mishandled the disciplinary process and Ms Khanum's appeals against her sacking. IBC's actions "flew in the face" of its own rules and represented a "dereliction of fair procedure".