The long-standing dispute between Mr Frank Mulcahy, the former chief executive of the small firms lobby group, ISME, and his employers is understood to be have been resolved.

A verbal agreement, whereby Mr Mulcahy would be re-employed on a consultancy basis and would be paid around £70,000 in compensation, is understood to have been reached yesterday evening. It followed the adjournment of an Employment Appeals Tribunal hearing until today.

Mr Mulcahy was seeking compensation, reinstatement and an apology from ISME. Sources said that a verbal agreement had been reached that Mr Mulcahy would receive about £70,000 including his legal costs and that a compromise had been reached on the reinstatement issue. Mr Mulcahy is to receive a 12-month consultancy contract from ISME. A statement is to be agreed by the parties.

It is understood that no apology will be issued following his sacking last May with immediate effect by the ISME board.

However, the issue remains to be finalised. Mr Mulcahy was unavailable for comment last night.

The apparent agreement is the culmination of a series of claims and counter-claims with Mr Mulcahy saying he was the victim of a campaign of vilification by the board. This followed him being put on paid leave while the Garda Bureau of Fraud Investigation was called in to investigate matters relating to a management development programme. That matter went no further. Mr Mulcahy was initially suspended, then given four months notice, but sacked before this expired.

Following representations from counsel for both parties, tribunal chairwoman Ms Rosemary O'Connell adjourned the case until this morning.