The award, a joint endeavour by Lloyds TSB Scotland and the organisation Working Families, is intended to recognise employers who demonstrate innovation in striking a good work-life balance for their employees.
This is the second time that a Scottish FE college has emerged triumphant in this competition, with Ros Micklem, the principal of Cardonald College in Glasgow, being named "boss of the year" last year. One of the judges, Steve McDonald, head of human resources at Lloyds TSB Scotland, said Lauder "demonstrated that it supported a broad range of activities aimed at increasing flexibility, morale and well-being".
Sarah Jackson, chief executive of Working Families, who chaired the judging panel, praised "the inclusive and supportive community at Lauder which has created a balanced, lifestyle-friendly culture which goes beyond family friendly or work-life balance".
Janet Lowe, the Dunfermline college principal, described her organisation as a "people" business.
"Valuing and developing our staff is a vital strategic priority that has underpinned growth and will support our ambitious plans for continued growth," she said.
There were five finalists in the competition, including the Scottish Executive and JobCentre Plus Scotland.