Birmingham City Council has been ordered to pay £38,000 to a member of its road safety team who was subjected to a lengthy campaign of discrimination and harassment.
An employment tribunal found Christine Arnold lost the chance of promotion and effectively had her career destroyed because the council gave preferential treatment to her boss, Abdul Rashid, the head of road safety.
Mr Rashid, who was himself awarded a five-figure sum about six years ago after accusing the council of racial discrimination and victimisation, claimed Ms Arnold had subjected him to racial harassment.
His accusation was dismissed and the panel criticised his performance at the hearing, where he was found "not to be a witness of truth and not to be trying to assist the tribunal in his answers".
The award to Ms Arnold, who is white, includes compensation, costs and aggravated damages.
In a critical judgment, the tribunal accused senior council officials of being in denial about the impact of discrimination on Ms Arnold during her 15 years of employment with the local authority.
The council's only response had been to make a "cynical offer" to transfer Ms Arnold to a different unit but with no discussions as to the practicalities of how her career would progress.
Chief officers and the leader of the council were ordered by the tribunal to read its judgment and produce within one month a proposal for a new job that would enable her to return from long term sick leave and employment.
Problems in the road safety unit were long-standing, the tribunal heard.
Ms Arnold joined in 1990 and Mr Rashid was transferred to the unit five years later.
Mr Rashid had a "long history of making complaints including racial discrimination against managers", the tribunal said in its unanimous judgment.
In 2000, Mr Rashid bought an employment tribunal case against the council accusing it of racial discrimination and victimisation. He was awarded £10,000 and, afterwards, appointed acting head of the road safety unit.
By 2002, Ms Arnold had submitted a formal grievance complaint accusing Mr Rashid of "belittling" her in front of other team members. The allegation was rejected by a council panel and by the tribunal.
Mr Rashid responded by making a racial harassment complaint against Ms Arnold, accusing her of "malicious intent". The tribunal found "no cogent or satisfactory" explanation for the accusation.
The tribunal found that, driven by a concern not to upset Mr Rashid, the council dealt with his complaint more quickly and at a more senior level than it did Ms Arnold's complaint.
His appointment in 2004 as head of road safety on a permanent basis was "completely manipulated", affording Mr Rashid preferential treatment, the tribunal decided.
It found the council unlawfully discriminated against Ms Arnold on the grounds of her race and gender and victimised her because she alleged the local authority had contravened the Race Relations Act and the Sex Discrimination Act.
Birmingham City Council interim chief executive Stephen Hughes said: "We are considering very carefully the judgment of the employment tribunal and will take on board its recommendations, including those relating to Ms Arnold's future career with the council.
"Over the past three years, the council has handled a total of 226 employment tribunal applications brought by employees and has either admitted liability or had the tribunal rule against it in only 17 of those cases."