The Metropolitan police officers arrested the Muslim pilot, who was not named by the British press, in 2007 over the allegations of being linked with terror suspects.
Following the arrest, the airline employer, which was not named by the British press either, suspended the Heathrow-based pilot over the allegations that he would be a threat to national security.
The allegations were made based on the British police's claim that the two suspected extremists could have links with the Muslim pilot and he could be part of an alleged terror plot.
One of the suspects was the pilot's landlord and the other was someone with whom the Muslim pilot's brother conducted business transactions.
The pilot was dismissed in 2010 over the accusations that he could “cause considerable harm” to the “national security.”
During the hearing at the employment tribunal in Havant, Hampshire, the pilot said that if he had been a non-Muslim, he would have received a different treatment.
Moreover, the tribunal was told that the case was “unique and unprecedented” and never before had a pilot been axed over accusations of having links with terror suspects.
A union official who represented the pilot during the airline's inquiry said the airline employer had no substantial evidence to prove any links between the pilot and the suspects.
Moreover, the official revealed that the airline had explicitly stated that the pilot's religion and race were the main reasons for accusing him of plotting to hijack a plane and sabotage it.
“The airline's line of questioning came across to us as, 'You're a Muslim man with a Pakistani-sounding name. You must therefore believe in all this stuff or at least be familiar with it,'” said the official.