A former investment director and partner in ICC Venture Capital will have her case for constructive dismissal heard in October after an Employment Appeals Tribunal ruled yesterday the case should go ahead, despite having been lodged after the statutory six-month period.

Ms Prisca Grady, 40, has alleged she was constructively dismissed after she resigned from ICC, now part of Bank of Scotland (Ireland), in mid-2000 following an alleged period of bullying and sexual harassment. The tribunal yesterday ruled that Ms Grady's fear that her former employer would "bad mouth" her and block her career after she left ICC constituted an exceptional circumstance that resulted in her claim being lodged one day late.

Ms Grady left ICC at the end of July 2000 and should have lodged her claim against the group no later than January 30th, 2001, but did not do so until January 31st.

At the beginning of the four-day hearing, Ms Grady said she had been so traumatised by her treatment at ICC she had difficulty functioning, which led to her claim being late. Midway through the hearing, the tribunal decided to narrow the case and focus on whether Ms Grady's fear that her former colleagues would "bad mouth" and "block" her when she sought non-executive directorships on various companies might constitute an "exceptional circumstance".

Yesterday, it ruled that that fear, justified or not, felt by Ms Grady did constitute an exceptional circumstance that led to her claim being lodged late. The substantive case will be heard later in the year.

During this week's hearing, the tribunal heard allegations of bullying and sexual harassment. It was told that deputy managing director of ICC Venture Capital Mr Tom Kirwan had acted inappropriately when he and Ms Grady met alone in Mr Kirwan's office to discuss business. The tribunal heard that Mr Kirwan allegedly sat in his seat, pulled it in close to his desk, put his hands below the desk and gyrated his hips.

Mr Paul Gardiner, representing ICC, said his client completely denied those allegations, accusing Ms Grady of fabricating evidence.

At an earlier Employment Appeals Tribunal in May, Ms Grady's legal counsel said his client would make allegations against the bank of mismanagement of funds and excessive profit-taking, both of which the bank denies.

In handing down his ruling yesterday, tribunal chairman Mr Dermot McCarthy said the issue was not whether Ms Grady had indeed lost the goodwill of ICC but whether she believed she had lost it. He said, from the evidence given by ICC chairman Mr Phil Flynn, it was clear Ms Grady believed this. Mr Flynn told the tribunal Ms Grady was "high as a kite" with rage when she rang him in January 2001 claiming Mr David Fassbender, managing director of ICC Capital Markets, had tried to "vehemently" block her appointment as adviser to an unnamed company of which ICC was a shareholder.

Mr McCarthy said, even though Mr Fassbender gave evidence stating he was well disposed to Ms Grady and that he did not try to block her appointment, Ms Grady "rightly or wrongly" believed she had lost his goodwill.

"It is absolutely clear to us that factor led to the claim being started," he said.

After yesterday's ruling, Ms Grady said she was delighted. "It is one small step on what is going to be a long road," she said. While the substantive case would be very hard fought, she said she was "absolutely delighted" she had decided to take the action.