New Zealand baker Julie Savage claimed she was racially discriminated against by her Australian boss while working at Adelaide bakery Vili's Cakes.
Ms Savage alleged the bakery's owner Vili Milisits called her "Kiwi" while she was working as a supervisor under his management in 2016.
She claimed that when her co-workers picked up on the nickname they joined him in using it instead of her real name.
The New Zealand native left the bakery shortly after and filed a complaint with the Commissioner for Equal Opportunity, Niki Vincent.
The complaint was referred to the South Australian Employment Tribunal, where the case was dismissed this week.
Judge Leonie Farrell found Ms Savage had not claimed to have suffered "unfavourable treatment in respect of the terms of her employment, lack of progression or segregation".
Judge Farrell also found that calling a New Zealander a 'Kiwi' "was not of itself offensive" and "not an insult".
She added that the word, derived from the name of a small bird native to New Zealand, is often seen as a "term of endearment".
"At its core it is not about racism," Judge Farrell determined.
Once a refugee from Hungary, bakery owner Vili Milisits told the ABC the judge had reached the "right outcome".
Having experienced racism himself when he arrived in Australia, Mr Milisits told the ABC he now employed "every nationality known to man" at his bakery, and doesn't like "being called racist."
