The institution spoke out after the European Court of Justice (ECJ) in Luxembourg ruled on Tuesday that banning the wearing of a visible political, philosophical or religious signs was not direct discrimination.
A CofE spokesman said: "This ruling raises significant questions about freedom of religion and its free expression. Whether it be Sikhism and the wearing of turbans and kara through to the wearing of a cross."
"In preferencing 'freedom to conduct a business' above the free expression of faith, the ruling potentially places corporate interest above those of the individual."
The ECJ judgement was prompted by the case of a woman in Belgium who was fired from her job as a receptionist at G4S in 2006 after she insisted on wearing an Islamic headscarf to work.
The court ruled that the security company's rules preventing the public display of personal beliefs by staff did not constitute direct discrimination.
Commenting on the ruling, the CofE spokesman went on to say: "Equally troubling is the assumption of "neutrality" within the ruling.
"The imposition of blanket bans – whilst often seeking honourable outcomes - may represent a worldview based on dogmatic or ideological assumptions which may unjustly limit individual rights."
Meanwhile, Bishop of Leeds Rt Revd Nicholas Baines said while the ECJ decision must be studied to establish its implications, "there is clearly more work to be done in relation to religious literacy."
Bishop Nicholas said: "Inevitably, this judgement once again raises vital questions about freedom of expression (not just freedom of religion), and shows that the denial of freedom of religion is not a neutral act, contrary to how it might be portrayed. There is no neutral space.
"Furthermore, it illustrates how far we have to go as a secular society in working out what freedom of expression actually means."