The case was heard in November 2015 and was dismissed at the Court of Appeal.
Mohammed Naeem, a Muslim Chaplin employed by the Prison service, had claimed he was discriminated against on race and religious grounds.
However Lord Justice Underhill, one of the judges that heard the case, stated that the Prison Service employed a number of chaplains in full-time and part-time roles.
The claimant, Mr Naeem, took to his role in June 2001 on a part-time basis and changed to a full-time role in 2004.
At the time he, and a Church of England chaplain, were the only employed chaplains at Bullingdon Prison.
The prison pay system allows employees to progress in each pay band with length of service. However until 2002 the prison had only employed Christian chaplains so and it they received higher levels of pay than Muslim chaplains.
The law report released on Thursday stated that the essential point in the case was that the shorter average length of service between Muslim chaplains and Christian chaplains - which the prison puts down to need.
It attributes this to the fact more people were using the Christian chaplain and a Muslim chaplain was hired once more Muslim prisons were admitted.
