THE Ministry of Defence has been exploring ways of secretly depriving servicemen and women of their employment rights to prevent financial claims for unfair dismissal.

A leaked briefing paper obtained by The Herald shows that studies are being carried out to find ways of circumventing European and British regulations on grievances which might result in legal action by military personnel.

More than 900 serving and former soldiers are already poised to take legal action against the MoD this year in a landmark case that could cost the government hundreds of millions of pounds in compensation payments and open the floodgates to further claims.

The mass joint class action is being taken on the basis that the MoD breached individuals' employment rights by misuse of an administrative process known as manning control.

It follows the revelation in the leaked document that defence ministers were advised as long ago as 1998 that the system employed to sack personnel to save money on pay and pensions left the MoD wide open to unfair dismissal claims. The document recommends that steps be taken to exclude members of the Army, Navy and RAF from the Employment Rights Act as ''there is a strong likelihood of an increase in legal challenges against the armed forces' employment policies such as administrative discharge through manning controls and the contractorisation of service posts''.

Allowing personnel access to employment tribunals raised ''serious concern about the effect this could have on combat effectiveness by undermining the services' essential disciplinary and management framework''.

The manning control policy (MCP) was originally designed to review soldiers' careers at six, nine and 12-year points of service and to free up the promotional logjam in the junior NCO ranks of corporal and lance-corporal.

Those involved in the class action say MCP was instead used illegally to reduce manpower to bring the Army's wage bill within budget, something the MoD has always denied.

Hundreds of men were manning controlled as they reached their 12-year point, eliminating their right to an immediate pension. Many were then offered short-term contracts on reduced pension terms.

Hundreds more, insiders claim, opted to leave the Army voluntarily rather than have the perceived stigma of being sacked on their records.

As The Herald revealed earlier this year, more than 200 men and women who had been medically downgraded because of injury or illness since 1996 were dismissed under section 9.414 of Queen's Regulations as ''services no longer required'', rather than being granted medical discharges.

Sacking them this way saved the MoD an average (pounds) 18,000 per soldier per year, despite the fact that the regulation expressly forbids shedding those deemed medically unfit.

Adam Ingram and Ivor Caplin, junior defence ministers, have repeatedly told the House of Commons since 2002 that manning control is no longer being used.

Army sources say orders to battalions have gone out regularly since then telling commanding officers to ensure that their men are aware of manning control.

An MoD spokesman said: ''It is not our policy to comment on leaked documents. Manning control has not been used since 2002 and servicemen already have a statutory right of redress via the Army's chain of command.''