The 24-year-old woman had been called to a job interview in Uppsala with a company providing interpretation services via telephone or video, as The Local reported last year. But when she declined to shake hands with one of the interviewers, a male manager, he terminated the meeting.
Sweden's Discrimination Ombudsman took the case to the Labour Court last year, arguing that the woman, who would not have had to meet customers in her role, had been discriminated against.
The company admitted that it considered germophobia and autism legitimate reasons for not shaking hands, but argued that its policy called for employees to treat all colleagues equally no matter their sex.
Refusing to shake hands with colleagues of the opposite sex went against that policy, it said.
It also argued that the policy was not discriminatory against Muslims in general, because the majority of Muslims do shake hands with both men and women.
The woman herself argued that in situations where both men and women are present, she greets women in the same way – by smiling and moving one hand to the heart – to not make the men feel excluded.
The Labour Court stated in its ruling, seen by The Local, that understanding her religious reasons for preferring such a greeting meant "there is no reason to perceive (it) as degrading or as a rejection and it would therefore not have to lead to conflicts in the workplace".
It further wrote nothing indicated that the woman "would not be able to function in a gender equal workplace or that her religion would cause obstacles or difficulties in the work or for the business".
It also criticized the policy "for excluding those people who interpret Islam in the same way" as the woman, but did note that the employer's intent had not been to discriminate against her.
When ruling on damages owed to the woman, it took that into account and the fact that it was impossible to determine if she would have been given the job had the interview been completed.
The Labour Court therefore ruled that the woman was to receive 40,000 kronor (approximately $4,350) as compensation, half of what the Discrimination Ombudsman had asked for.