A former director of Barings Bank, which was brought down by rogue trader Nick Leeson, faced a further crisis when the collapse in the sheep trade hit his 11,000-acre Highland estate.

Absentee landlord Andrew Fraser, a financial consultant, decided to get rid of his 2200 flock and make his shepherd George Matheson redundant from his #12,000-a-year post.

The 53-year-old estate owner has been taken to an employment tribunal by Mr Matheson, 46, who was represented at the hearing in Inverness by his wife Margot, 39, a cookery student.

Mr Matheson claimed yesterday he was unfairly selected for redundancy from Corriegarth Estate, near Fort Augustus, and that it was the estate manager's son who should have been paid off as he had returned to the estate for only 18 months compared with Mr Matheson's four years of service.

The Mathesons are seeking compensation, but the estate said their claims of favouritism and nepotism were unfounded.

Mr Fraser said the slump in the price of sheep led to the estate taking the decision to cut drastically back on their flock and instead use the hillside for deer stalking and grouse shooting.

A flock of only about 300 remains now, while grouse numbers were increased from 50 brace to more than 1000.

Mr Fraser, who lives in London, said he spent about three months of the year on the estate he bought in 1987.

He said: ''George's principal job was as a shepherd. It was nothing personal but the position was not going to exist any more. It was my decision.''

Estate manager Billy Johnston, 58, said Mr Matheson was hired as shepherd and general estate worker. He said looking after the sheep was not a full-time job and Mr Matheson did other estate work.

Asked by solicitor for the estate, Ms Sally Bonar, if Mr Matheson was good at his job and looked after the sheep well, Mr Johnston said: ''He did his job as I asked him to do.''

But he added that he sometimes questioned doing other work such as handling cattle. However, he never refused.

Mr Johnston said that when his son Kevin, 35, was made redundant from nearby Cawdor Estate, Mr Fraser decided to take him on, because there was an increasing amount of paper work.

He said of the decision: ''Kevin being my son, I took nothing whatever to do with it.''

Mr Johnston agreed that Mr Matheson carried out or helped with other duties such as culling deer, stalking, fencing, dyking, de-horning cattle, planting forage for the sheep, and heather burning.

He said that when the decision was made to sell the sheep, Mr Fraser told him that Mr Matheson's job had been made redundant.

Mr Matheson, questioned by his wife, told the tribunal his dismissal was out of the blue, and he was not consulted about taking on other duties.

Summing up, Mrs Matheson said: ''George was stunned at losing his job, and he did not tell me until the next day because he was so shocked.

''The manager had failed to even hint that such a thing was happening.''

She claimed that if the estate had kept time sheets as required by the Agricultural Wages Board, they would have proved her husband performed many other duties apart from shepherding.

Mr Matheson is now a freelance estate worker and still lives on Corriegarth Estate with his wife.

The tribunal will issue its findings later.