The Chief Rabbi has said a European ruling allowing employers to ban religious garments will “polarise society and stoke resentment”.

It follows a decision on Tuesday by the European Court of Justice (ECJ) in Luxembourg, which backed a firm’s decision to prohibit staff from wearing religious clothes and symbols, after a Muslim woman was fired for wearing a headscarf.

“This ruling will doubtless embolden those who believe that any public expression of one’s faith is to be deplored, even in cases where that expression does not interfere with the rights of others,” said Chief Rabbi Ephraim Mirvis. “It will yet further polarise our society, stoke resentment and cultivate distrust.”

He added that the best businesses were “those that value the well-being of their employees enough to respect their sincerely-held religious belief and practice” and that those who did not afford their workforce “even this most basic of rights will be worse off as a result”.

European Jewish leaders had earlier criticised the ECJ’s decision as signposting a disturbing direction of travel.

“With the rise of racially-motivated incidents and [Tuesday’s] decision, Europe is sending a clear message that its faith communities are no longer welcome,” said Rabbi Pinchas Goldschmidt, president of the Conference of European Rabbis.

“Political leaders need to act to ensure that Europe does not isolate religious minorities and remains a diverse and open continent.”

The ruling was brought after Samira Achbita, a receptionist working for G4S, started wearing  a headscarf to work. The company had an unwritten rule prohibiting staff from wearing visible signs of their political, philosophical or religious beliefs in the workplace.

Achbita was dismissed in June 2006. She challenged this dismissal in the Belgian courts, which applied to the ECJ for  clarification. The ECJ ruled that the prohibition on wearing an Islamic headscarf does not constitute direct discrimination based on religion or belief.