Charity Disability Action Yorkshire has been told during an employment tribunal in Manchester that it must reemploy a former worker who was sacked in November 2006.
Judith Oliver, who had served as the organisation's chief executive, was suspended after being accused of setting an inappropriate budget, Third Sector reports.
Disability Action Yorkshire, which is based in Harrogate and provides a range of services to enable disabled people to access opportunities, had already been instructed to concede the case.
During the hearing, which took place last week, the charity was ordered to give Ms Oliver her job back and to backdate her pay to the time of her sacking.
It is not yet known what will happen to its current director Jackie Snape, who was appointed to a permanent position after Ms Oliver had left.
Both Disability Action Yorkshire and Ms Oliver declined to comment on the case.