Redcar and Cleveland Council was found by Newcastle Employment Tribunal to have unfairly dismissed Paul Whittaker, but did not reinstate him.
According to trade union Unison, the council intended to appeal against the ruling but settled out of court prior to the hearing.
Whittaker said: "I feel vindicated that at last the council has paid compensation to me for what it put me and my family through over the past three years."
Council has to pay dismissed employee double compensation
A council that refused to follow an employment tribunals ruling has been forced to pay double the original compensation awarded to a former employee.
