Duke Amachree worked as a homelessness officer until he was suspended in January 2009 for telling a terminally ill woman to "put her faith in God", "not to bother with doctors" and subjected her to a "30-minute barrage" about religion.
Six months later, following an internal investigation, Mr Amachree was dismissed for gross misconduct.
The employment tribunal ruled the dismissal was "fair" and there was no discrimination on the grounds of religion.
In a statement issued by the Christian Legal Centre, Mr Amachree, who worked for the council for 18 years, said: "I am devastated by the outcome. This is a sad day for Christians who simply want to live out their faith in the workplace without fear."
A spokesman for Wandsworth Council said: "We're delighted that the tribunal has found in our favour, supported the common sense and wholly reasonable way we handled this case and rejected the totally spurious and misleading claims that were made against us."
The council said it was "inappropriate and unacceptable" that Mr Amachree also revealed details about the terminally ill woman to the media which could have led to her identification.