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Nadia Eweida, 55, who lost her appeal against the airline today, has been refusing to return to work at Heathrow airport since being told last month that she was not allowed to wear the necklace.
In the wake of the ruling Dr John Sentamu said the decision was illogical and demanded BA reconsider.
"This decision is a nonsense and is based on flawed reasoning," he said. "The basis for the decision should not be 'practicality'... but rather whether it impacts on Nadia’s ability to do her job."
He added that it was clear Ms Eweida's cross did not form an impediment to her ability to carry out her duties at the check-in counter.
He said: "Under BA’s current reasoning, an employee who turned up to work wearing a 3ft-long cross must be allowed to wear it, because to hide such a cross under their uniform would be impractical. Yet in Nadia’s case a cross of less than 3in is deemed a problem.
"For me, the cross is important because it reminds me that God keeps his promises. This horrible instrument of torture now carries something other than the body of that man whom to me is a Saviour and to others is a prophet.
"Wearing a cross carries with it not only a symbol of our hopes but also a responsibility to act and to live as Christians."
British Airways has said it does not have a ban on religious jewellery, but argued it must be hidden from view.
The company said it has 34,000 uniformed staff who abide by the airline’s uniform policy.
A BA spokesman said: "The policy recognises that it is not practical for some religious symbols - such as turbans and hijabs - to be worn underneath the uniform. This is purely a question of practicality. There is no discrimination between faiths whatsoever.
"British Airways is a worldwide company operating in 90 different countries. We have staff and customers of all faiths and none. The uniform policy reflects the need to present a professional and consistent image wherever we operate."
Miss Eweida, from Twickenham, south-west London, claimed she had worn the small cross throughout her seven years with BA and accused the firm of religious discrimination.
She said she did not want to hide the cross because, "Jesus has to be glorified", adding: "I am not politically motivated or minded, I just follow the Biblical truth."
In response, the airline said it had offered her a non-uniformed job where she could wear a cross, but she had turned this down.
In today's hearing she said she was not prepared to compromise her faith, adding that more than 250 BA workers had signed a petition in support.
Joining the Archbishop in criticism of the judgment, Ken Livingstone, the London Mayor said that Nadia Eweida should be given the right to wear the cross if she wishes to do so, adding that all individuals should be able to follow their beliefs.
Shami Chakrabarti, the director of Liberty, urged British Airways to think again, saying the airline had come up with no rational argument for forcing Miss Eweida to conceal her faith.
"British Airways’ policy appears to be fundamentally misconceived and has lead to a bonkers result. This woman’s cross is clearly as important to her as a turban or a hijab to someone else," she said.
Miss Eweida now has a right to a second appeal.
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