Stephen Deans was suspended at the Ineos facility at Grangemouth amid claims he was involved in a bid to manipulate the contest to select a Westminster candidate in the town.
However, the company reversed its decision after Unite promised to "shut your factory down" by launching a strike.
Labour has been dogged for months by the row over Unite's alleged activities in the battle to select a party candidate for the Falkirk seat.
Unite, Labour's biggest donor, recruited around 100 new members to the party in an attempt to help its favoured candidate, Karie Murphy, get the nomination.
A Labour investigation prompted leader Ed Miliband to criticise Unite and resulted in Murphy and Deans being suspended by the party.
Deans was both the chairman of the Falkirk West constituency party and chairman of Unite in Scotland during the controversy. His day job is at Ineos where, according to an internal Unite document, many of the new recruits were signed up.
"Last, but very much not least, is the exemplary Falkirk ... Using similar methods to Garston and Paisley, but at a much more intense level, led by the potential candidate, and very much supported by the local activist base, especially at Ineos we have recruited well over 100 Unite members to the party in a constituency with less than 200 members."
At the union's executive committee meeting last week, Unite's convener at the Ineos plant, Mark Lyon, said Deans had also been suspended by the company.
On a webcast on the union's website, he hit out at the "lies" told in the media about the Falkirk fiasco, adding: "Stevie had been suspended from work. It was an opportunistic attack, to try and attack him.
"Every action that Stevie Deans and every other member of our branch has taken has been within rule, within company procedures. It's been in all respects legal ...
"The General Secretary has been involved in discussions and we're dead grateful for that. Pat Rafferty [Unite's Scottish secretary] has been involved in discussions with the company as well."
Lyon claimed that the employer reinstated Deans following a meeting of hundreds of workers last week: "The message was clear: you can either reinstate Stevie, and let's get back to some sort of sanity and normal business, or we'll shut your factory down and there will be strike action taken."
He added: "Stevie started back at work this morning."
Lyon was sitting next to Unite general secretary Len McCluskey when he made the speech.
The Grangemouth facility is of major industrial importance. A strike in 2008 over pensions led to panic buying of petrol across the country.
The industrial action also resulted in BP closing the Forties pipeline system, which is responsible for delivering almost a third of Britain's North Sea oil production.
Two Unite sources confirmed Deans worked for Ineos.
A union insider said Ineos had been unhappy at the company's name being mentioned in connection with the Falkirk debacle.
Lyon's remarks were followed by a speech by McCluskey, who said: "I want to express my support for Stevie Deans and Karie Murphy. Our union will stand by them."
He described Labour's report into Falkirk as a "shoddy farce" and a "disgrace".
Police Scotland last week confirmed its officers would not be investigating the Falkirk debacle.
However, the Information Commissioner is believed to be looking into aspects of the row.
Scottish Conservative MSP Alex Johnstone said: "It just shows that no matter how damaging this has been for the Labour party, neither they nor Unite seem able to bring this matter to a reasonable conclusion.
"In the 1970s this country was brought to its knees by exactly this kind of petty squabbling, and I can't believe lessons from the past have just not been learned."
An SNP spokesperson said: "This shows how completely out of control the Labour Party situation in Falkirk is. We have been calling on Johann Lamont for weeks now to get a grip – but Scottish Labour say London is in charge.
"This row should have been sorted ages ago – without resorting to wasting police time – but the person who is supposed to be in charge of the Labour Party in Scotland appears completely helpless."
A Unite spokeswoman declined to comment.
Neither Deans nor an Ineos spokesman returned the Sunday Herald's call.