A RETIRED lieutenant colonel who says he was subjected to racial discrimination will take the Army to a landmark employment tribunal later this month.

Dr Surinder Saggar alleges he was the victim of discrimination while working at the Princess Mary Hospital, in Akrotiri, Cyprus, between September 1998 and December 1999.

The consultant anaesthetist, from Brompton-on-Swale, near Richmond, North Yorkshire, who served in the Royal Army Medical Corps, took the Ministry of Defence to a tribunal in October 2001.

But the hearing at Thornaby, Teesside, was dismissed on the grounds that it had no legal power to hear the case as Lieutenant Colonel Saggar - who is of Indian descent - was working "wholly or mainly" outside Britain at the time.

However, Appeal Court judges ruled that the tribunal - and the Employment Appeal Tribunal which later confirmed its decision - had applied too narrow a legal test.

The judge said the tribunal had made an error of law by focusing exclusively on the time he had spent in Cyprus.

Mr Robin Allen QC, for Lt Col Saggar, argued the tribunal's interpretation of the statute "produced arbitrary and obvious unfair consequences" for Lt Col Saggar who had, apart from the Cyprus posting, spent most of his career working in Britain.

The court overturned the decision and ordered a rehearing of the case, which will be held at the employment tribunal office, in Newcastle, on January 23.

Legal experts say the case has vital implications for expatriate workers who suffer race, sex or disability discrimination while working outside the UK.

Lt Col Saggar, 67, worked for the NHS, before joining the Army in 1982

He made the complaints to his commanding officer about soldiers serving under him while on his last placement before his retirement.

Neither Lt Col Saggar nor his solicitor, Chris Harrison, from Scotts Wright, in Catterick Garrison, was available for comment yesterday. The Ministry of Defence said it could not comment at this stage.