John MacDonald published profiles on his company's website
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A driving school boss called a worker "gay boy" and said he was lucky to have a job, a tribunal has heard.
John MacDonald allegedly described Mark Rowan, 29, as "one of the girls" on the firm's website and told him: "Not many companies employ gays."
The Pro Scot boss, based in Kirkcaldy, Fife, had clashed with the employee when company cutbacks were announced.
The company said Mr Rowan was dismissed after a series of late arrivals at work, which he has denied.
'Perfect opportunity'
Mr Rowan claimed Mr MacDonald had bragged to a colleague about not having "poofs" work at his company and claimed he would find a way to sack him.
The panel at the Edinburgh employment tribunal heard that, when budget cuts and job losses were announced, Mr MacDonald was given the perfect opportunity.
Mr Rowan said: "The staff were all sickened but the general feeling was that I was the one going to be sacked.
"He would refer to me as 'gay boy' and told my colleagues he didn't want 'poofs' working for his company."
Staff walked out on Mr MacDonald, but the boss clashed with Mr Rowan in the car park before he could leave.
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I was so stressed I was losing sleep
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Mr Rowan added: "He made a beeline towards me and said if I didn't go back into the office I wouldn't have a job to go back to.
"But the office manager had already locked the doors and left, so I went home."
Mr Rowan said the next day Mr MacDonald locked all the staff in a room and asked why they had walked out.
He went on: "He said that I led the walk-out and that I was the leader. And he said he didn't want to appear to be weak by keeping me on."
After a week out of a job, Mr Rowan said he was invited back to work at Pro Scot on the condition that he apologised.
He said: "Mr MacDonald said that I should feel thankful to have a job back because there weren't many companies that would employ gays."
Mr Rowan said that, after being reinstated, he "felt the axe hanging over my head once more".
Late arrivals
"I was so stressed I was losing sleep," he added.
The panel also heard how Mr MacDonald published profiles on his company's website about each member of staff and described Mr Rowan as "one of the girls in the office".
Mr Rowan said the jibes left him stressed and too scared to confront his boss.
The company has denied the allegations and claimed Mr Rowan was dismissed after a series of late arrivals to work, although he insisted this only happened twice.
Pro Scot also claimed Mr Rowan was making mistakes on a daily basis and would have been sacked anyway.
The company said he chatted to friends on his mobile and used social networking website Bebo throughout the day.
The hearing continues.
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