Carl Borg-Neal raised the question during the training session about what to do when the word is used by a black colleague.
As a result, Borg-Neal became the focus of a racism investigation and was ultimately dismissed for gross misconduct.
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Borg-Neal, a former mayor and councillor from Andover, Hampshire, said his dyslexia can cause him to say things inadvertently and successfully claimed disability discrimination.
Compensation has yet to be decided, but the claimant is expected to receive a significant sum.
Matt Jenkin, head of employment law at Moorcrofts, said the tribunal decided Borg-Neal was unfairly dismissed due to the context of the comment and lack of perceived malice.
Speaking to HR magazine, he said: “The employment tribunal went to great lengths to stress the very unusual and particular circumstances of this case.
“In this case the employee was asking the question as part of race education training."
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Jenkin said employers should this case demonstrates the danger of responding to incidents without considering the circumstances.
He added: “Employers facing similar issues with employees who have made a comment in error or asked what they think is an innocent question reaction should avoid knee-jerk reactions.
“The case is also likely to have an impact on equality and inclusion training in the workplace. Employers will want to ensure that they are very clear about the language that is to be used during such training sessions and any terms that they want people to avoid using even if it part of a genuine question.”
Lloyds Bank said: "We have a zero-tolerance policy on... racist language and are considering appealing the judgement made."
