Laing had challenged this claim saying that it was not reasonable to expect a one-off comment to have such a profound effect.
The case hinged on an incident in 1999 when Yassin Essa was called a "black c***" by his foreman. Essa, who was born in Cardiff and competed as an amateur boxer for Wales, said this had led him to become depressed because the foreman had called into question his Welshness by labelling him in this way.
Essa had told an earlier tribunal hearing: "The only thing I'd done was to be black and go to work. I am Welsh and nobody can take that away from me."
He told the appeal court on Wednesday that he believed he was entitled to seek compensation for the psychiatric injury he suffered.
The only thing I’d done was to be black and go to work
The court was told that in March 2000 an employment tribunal had found that Essa had been a victim of racial discrimination and awarded him £5519 damages, made up of £519 for his financial losses and £5000 for injury to feelings.
Essa took the case to the employment appeal tribunal in February last year when it ruled that he was also entitled to pursue a compensation claim for his psychiatric injury. A decision that Laing had challenged. The firm had apologised to Essa and had said the foreman, who "deeply regretted" the remark, was given a final warning.
Lord Justice Pill, one of the three appeal court judges, said the remark in question was "grotesquely offensive" and, although the foreman said it was a "throwaway comment made without malice", the consequences for Essa had been devastating.