Marica Ricutti, a 39-year-old single mother of two, said she was laid off from her job in the cafe of the chain's Milan store after refusing early morning shifts to care for her disabled son. She claimed her sacking was discriminatory, and asked for both compensation and her job back.
After her dismissal, which was widely reported in the Italian press, co-workers took part in a two-hour strike at the Milan branch, and Italians bombarded the Swedish brand's Facebook page with critical comments.
Union workers and even Italy's vice minister for economic development urged Ikea to rethink the decision.
But a judge has now rejected her appeal, saying that Ricutti's actions had been "of such severity as to damage the relationship of trust between employer and employee", making the dismissal a legitimate response.
Ricutti had worked with the company for 17 years and said she had been given verbal assurances of a more flexible schedule to allow her to take her children to school and the youngest to his weekly therapy sessions.
Based on testimonies gathered for the appeal, the judge said that Ikea had tried its best to meet the employee's requirements. The store's management had organized shifts to accommodate Ricutti's personal commitments and had even asked other workers to try to be flexible in order to help the mother of two.
According to Ikea, Ricutti had at times changed her working hours "without any notice or communication of any kind", making it difficult to run the cafe at the store and causing problems for customers and other staff.
The 39-year-old now plans to present a second appeal, according to the Cgil union which has been supporting Ricutti and said in a statement that the judge's ruling "fails to take several issues into consideration".
Her case caused outrage in Italy, where women and particularly mothers are disproportionately affected by the country's high unemployment levels.
Among Italian women who are employed when they become pregnant, one in four loses her job within a year of giving birth, according to data from national statistics agency Istat in 2016. The risk of losing her job increases with each subsequent child, the same data shows, while 42.8 percent of those who had continued to work admitted to struggling to reconcile their work and family life.