"We have worked hard so that women and men can be seen as equals in the workplace. If feels like we have slipped back a few steps here," Jeanette Löding, CEO of Melament AB told The Local on Wednesday regarding the court's decision.
The agency explained that it had decided to accept the Stockholm District Court decision to award the 28-year-old Muslim man 60,000 kronor in compensation as it felt that there was insufficient evidence to prove that discrimination had not taken place.
The agency said that if it appealed the ruling it may appear that there was a requirement to greet people in a certain way in order to participate in labour market training schemes.
Jeanette Löding agreed that there should be scope within Swedish business for people to greet each other in several ways, but added that it was not acceptable to simply ignore somebody.
"It has to be clear that there is a greeting. And that was not the case here," she said, arguing that the incident had left her feeling "outside" and discriminated against.
The case dates back to May 2006 when the man was seeking work experience at Löding's firm Melament in Älmhult in Småland in southern Sweden. As a result of the man's refusal to shake the CEO's outstretched hand, citing religious faith, his right to benefits was revoked.
The court ruling has since generated a great deal of attention and controversy in the Swedish media.
Dagens Nyheter columnist Lena Andersson was among those scathing of the ruling describing DO's case and the court ruling as "rewarding the apartheid of agency-approved discrimination."
The lawyer representing the Discrimination Ombudsman (DO) which took up the man's case, Katri Linna, argued at the time however that the ruling was important to underline that "everyone can take part in the labour market," adding that, "people must be able to greet each other differently depending on their religion."
The Discrimination Ombudsman has since been reported to the Parliamentary Ombudsman (Justitieombudsmannen, JO) for contributing to the discrimination of women, a move welcomed by Jeanette Löding.
"I think it is positive. But we shall have to wait and see what comes of it," she said to The Local.