Christopher Lewis, 50, who taught history and geography at John Beddoes school, Presteigne, Radnorshire, claimed he had been unfairly dismissed at the end of the summer term in 2002.
A three-day employment tribunal in Cardiff heard last week how he became unpopular and was seen as a "troublesome" member of staff for reporting another teacher for smoking in a classroom. He also complained that a fire door was kept locked, putting pupils at risk, and that another teacher had been "fooling around" with a fire extinguisher.
Jenni Watson, representing Mr Lewis, said he was selected for redundancy because he was seen as a troublemaker.
The claim was denied by the head, John Stocker, who said the redundancy was a result of a pound;92,000 budget deficit and a need to make savings.
Mr Lewis told the tribunal that he was ignored when he pointed out problems in the school and that he had been subjected to name-calling by a female member of staff.
Mrs Watson said the head had failed to take Mr Lewis's concerns seriously, and that this had led to a "snowball of behaviour" in the school, resulting in his dismissal. She said the dismissal process had been a travesty.
But tribunal chair Dr Rachel Davies said: "We reject the assertion that Mr Lewis was targeted. There is no evidence to that effect whatsoever.
"We accept that this was Mr Lewis's genuine perception, but are satisfied that this perception was false and of his own making."
The tribunal was satisfied that there was a need for redundancy and the axe fell on the humanities department where he taught.
Mr Lewis, who has found a new career in Shropshire, is re-training to teach maths.
He plans to put his concerns about staff conduct before the General Teaching Council for Wales at a later date.