Colin Atkinson, 64, has fallen out with his employers at Wakefield and District Housing (WDH) after putting the cross on the van’s dashboard.
WDH said he failed to comply with company policy which prohibits employees from displaying personal items in vehicles.
The company said it had started an investigation into the incident which could result in disciplinary action.
Atkinson said: “I’m really shocked and surprised by all of this.
“I have always had that cross in my van. It’s a symbol of my personal faith. It’s not offensive. It’s in a discreet place and I am acting lawfully.”
WDH, where Mr Atkinson has worked for 15 years, asked him to remove the 8ins (23cm) cross and started an investigation after a tenant complained about it.
Gillian Pickersgill, executive director of people at WDH, said: “It is not about religion – it’s simply about employees not displaying personal items in company vehicles.
“Mr Atkinson has failed to mention that it is permissible for WDH employees, including himself, to display religious artefacts and other personal possessions on their desks and themselves.”
WDH added it was “inappropriate” to comment further on the case.
Andrea Williams, CEO of the Christian Legal Centre which is supporting Atkinson, said: “When a man can’t display a palm cross in his van in a historically Christian country, it should give people serious pause for thought.”
The palm cross is usually made from the fronds of a palm leaf, which according to the Bible were laid on the ground when Jesus entered Jerusalem. It is used during Palm Sunday services in the run up to Easter.