The European Court of Justice has ruled that employers are entitled to ban employees from visibly wearing any philosophical, political or religious garment.
This ban includes headscarves but the court has said any ban must be based on internal company rules and not on the wishes of customers, according to the BBC.
The court's ruling was conferred after a case about a receptionist who was sacked from security company G4S in Belgium for wearing a headscarf.
This is the first decision the court has made on the issues of headscarves at work.
However the ruling has been criticised by Amnesty International, who claim that it is "disappointing" and opens a backdoor to prejudice.
Director of Amnesty International's Europe and Central Asia programme John Dalhuisen said such rulings "give greater leeway to employers to discriminate against women, and men, on the grounds of religious belief.
"At a time when identity and appearance has become a political battleground, people need more protection against prejudice, not less."