In the ruling, the ECJ explicitly states: "prohibition on wearing an Islamic headscarf... does not constitute direct discrimination based on religion or belief within the meaning of the directive".
The decision came as the court gave a joined judgment in the cases of two women - one in France and the other in Belgium - who were fired for refusing to remove headscarves.
The private businesses can ban religious, political, and philosophical symbols as long as the ban applies "to all religious and political beliefs".
Wearing an Islamic headscarf, as well as all other religious symbols, is already prohibited in France in public service jobs, even when employees are not in direct contact with the public.
South Africa win toss and bowl; de Grandhomme replaces Santner
The three-match series now stands at 0-0 with the second Test set to begin from March 16 at the Basin Reserve in Wellington . Neil Broom comes in at No 4 for the Black Caps in place of the injured Ross Taylor for the match in Wellington .
Manfred Weber, head of the centre-right European People's Party, the biggest in the European Parliament, welcomed the ECJ's ruling as a victory for European values.
"Accordingly, the general rule is that an employee can not be dismissed or otherwise discriminated against in New Zealand as a result of wearing religious clothing in the workplace, such as a headscarf".
Al Jazeera's Natacha Butler, reporting from Paris, said Tuesday's ruling is complex. According to the ECJ, upholding an image of neutrality may qualify as such.
He said the vague ruling could end up employers deciding everything that an employer wears.
The case was then referred to the European Court of Justice for clarification on what is banned by EU anti-discrimination laws.
United Kingdom parliament passes Brexit Bill and opens way to triggering Article 50
The bill still requires the formality of royal assent from Queen Elizabeth II to become law, which could come on Tuesday. Mr Davis said that allowing the amendment would give politicians a chance to fight for us to remain in the EU.
In May 2016, a top European Union court adviser said that employers have the right to ban headscarves as long as it is a ban that is imposed on all religious symbols.
Subsequently, the company introduced a formal ban.
"For example, it's fine for employers to have a dress code but it needs to be applied with some sensitivity and flexibility to take account of religious beliefs".
Article 9 of the 1950 convention says everyone has the right to "manifest his religion or belief, in worship, teaching, practice and observance". The other case involved design engineer Asma Bougnaoui, who was sacked from her IT job when a customer said his staff was "embarrassed" by her headscarf, the Guardian reported. They found in particular that the case of the French software engineer, fired after a customer complaint, may well have been discriminatory.
Jones on 6N title: We haven't got anything to celebrate yet
It was Vunipola's first global appearance of this Six Nations after he suffered a knee ligament injury back in November. That is something we want to do to teams - try and take them to a different level and hopefully we can do that.