A NEWPORT-based race equality group has admitted the unfair dismissal of its former director.

South East Wales Racial Equality Council (SEWREC) has accepted liability in its case involving Dr Mashuq Ally ahead of an industrial tribunal hearing scheduled for this month.

The publicly-funded body could now face payouts totalling thousands of pounds in legal fees and possible compensation.

Dr Ally was ousted from his post in July 2003 following an investigation by Joyce Steven, SEWREC's treasurer and head of finance at Newport council, amid allegations of an "improper personal relationship" with employee Rachel Godwin, and claims that he was "culpable in the bullying and harassment" of another member of staff.

He was accused of gross misconduct, having an inappropriate relationship with an employee and misleading SEWREC's executive committee over his appointment of a member of staff.

Dr Ally denied the allegations and claimed in a pre-tribunal hearing last year that he was dismissed because he had made a complaint against SEWREC's then vice- chairman Kebba Manneh - a Gwent magistrate and manager of Gwent Healthcare NHS Trust's hydrotherapy pool in Llanfrechfa.

Because of SEWREC's constitutional status, Dr Ally's tribunal claim was brought against, in addition to Mr Manneh and Ms Steven, current acting director Dave Phillips, and executive members Vernester Cyril OBE and Edward Watts. Dr Ally said: "All along I have consistently maintained that I was innocent of the charges made against me."

He said that the real reason for his treatment was that he had stood up to SEWREC's executive.

He said that as an unincorporated association at the time he was unsure what right individual members of SEWREC's executive committee had to call on the organisation's reserves (intended for the promotion for racial equality) to fight a legal action.

SEWREC's acting director Dave Phillips declined to comment at this stage. But Chris Myett, head of one of SEWREC's main funders, the Commission for Racial Equality in Wales, said: "An organisation receives funding from us according to their ability to deliver good work in achieving racial equality."

He added SEWREC's admission could cast doubt over whether it was able to deliver good work.