COT3 Solicitors

What is a COT3 Settlement?

Acas settlements are legally binding contracts between the parties to settle actual or potential complaints to the Employment Tribunal.

When a resolution is reached, the Acas conciliator will record what has been agreed on an Acas settlement form, known as a COT3. Both you and your employer will sign this as a formal record of the agreement.

However, it is important to know that an agreement becomes binding at the point both parties confirm to Acas their agreement to the terms. This can be done in a telephone call or by email.

The COT3 is a legally binding enforceable contract. This means that you will not be able to make a future Tribunal claim in those matters, or, if a Tribunal claim has already been lodged, it will be closed.

What is the difference between a COT3 and a Settlement Agreement?

A COT3 Agreement is similar to a Settlement Agreement in some ways but there are some important differences.

• A COT3 Agreement can only be achieved with the involvement of ACAS.
• A COT3 Agreement cannot be used if the parties have already reached a resolution and wording and simply require ACAS to endorse it.
• Settlement Agreements must be signed off by a solicitor and the employer will usually offer a contribution towards the employee’s legal fees. With a COT3 agreement, both parties would usually pay for their own legal representation. There is no reason why you can’t ask for a financial contribution towards legal fees if given a COT3.
• A Settlement Agreement can be used at any time, including after the termination of an employment relationship. A COT3 Agreement can only be used when there is an ongoing dispute or proceedings where ACAS can conciliate.

What is the role of ACAS and use of a COT3?

The role of the ACAS conciliator is to:

• Explain the conciliation process
• Encourage the use of internal procedures, such as disciplinary and grievance procedures, if available
• Explain the way Employment Tribunals set about making their decision and what things they take into account
• Explain how Tribunals decide what to award
• Discuss the options available, for example, the appointment of an independent arbitrator under the Acas Arbitration scheme, in appropriate cases
• Help parties understand how the other side views the issues
• Discuss any proposals either party has for a resolution

What the Acas conciliator cannot do:

• Cannot advise you whether to accept or make any proposals for resolution
• Cannot take sides, by representing you or helping prepare your case for Tribunal
• Cannot advise you on the merits of your claim or advise whether a claim should be made

Are COT3s enforceable?

COT3 Agreements are enforceable using the Employment Tribunal Penalty Enforcement and Naming scheme if you are still in employment at the time you enter into the COT3.

If the Respondent does not pay, they will be fined, and can be forced to make payment. If the COT3 was signed once employment had terminated then you needs to go to the County Court to enforce.

What are the benefits of signing a COT3?

• Agreements are decided by the parties, not imposed by a Tribunal. Agreed outcomes can include things you can’t obtain at an Employment Tribunal, such as an employment reference or an apology
• Acas Conciliation is free, and often is concluded by making a few telephone calls. If you are able to settle your differences, this will avoid the time, expense, risk and stress of bringing a Tribunal claim
• Acas doesn’t represent either you or your employer and they are not part of the Tribunal system
• It’s confidential. Settlement discussions cannot be used by you or your employer at a Tribunal Hearing. Tribunals are heard in public
• If the compensation agreed is not paid, a COT3 can be enforced in the same way as an unpaid Tribunal award

What are the risks of signing a COT3?

• Without the benefit of legal advice, you may be agreeing to settle your claim for a much lower amount of compensation than you would be entitled to, were you to refuse to sign and instead pursue a formal claim against your employer
• You will usually lose the opportunity of arguing your case in internal workplace procedures such as a capability, disciplinary or in a redundancy restructure process
• Agreements can cover claims that are outside the jurisdiction of Employment Tribunals such as personal injury. Or potential claims in the future about events that have not occurred yet
• You could have been entitled to a larger compensatory amount merely by seeking advice on whether tax is payable
• Most settlements are offered “without admission of liability” and you will forgo the opportunity of having your case considered by a Tribunal
• You can expect the agreement to include clauses covering confidentiality and sometimes the making of non-derogatory comments. Some employers will add a “penalty clause” stating that compensation is repayable as a debt, if these clauses are breached

What happens if there is a breach of the COT3 agreement?

A COT3 is a legally binding contract and if one of the parties breaches the terms, the other can take them to court to claim breach of contract.

Claims that can only be settled by Acas conciliation

Most Tribunal claims can be compromised by means of a Settlement Agreement. The following statutory rights can only be settled by using a COT3:

• Claims under section 188 of TULRCA for failure to inform and consult with appropriate representatives on collective redundancies
• Claims under Regulation 16(1), Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006) for failure to inform and consult or for failure to pay the compensation that is equivalent to the protective award, as well as claims under regulation 12(7) of TUPE 2006 for failure to provide employee liability information under TUPE 2006
• Claims under regulations 5 (right to equal treatment following a qualifying period), 12 (access to collective facilities and amenities), 13 (access to employment vacancies) and 17(2) (right not to be subjected to a detriment) of the Agency Workers Regulations 2010 (SI 2010/93)
• Claims for breach of regulations 5, 6 and 9 under the Employment Relations Act 1999 (Blacklists) Regulations 2010 (SI 2010/493)
• Claims for breach of regulation 2(2), The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 (SI 2015/2021) (right not to be subjected to a detriment)

Do you need legal advice for a COT3?

Unlike Settlement Agreements, COT3 Agreements do not need to be signed off by a solicitor. However, depending on the situation, you may wish to take legal advice to ensure that you are getting a fair deal.

How long does a COT3 take?

The time it takes for a COT3 to be finalised depends on how much negotiation takes place between the parties involved. Once the terms are agreed, the timing of any payment will depend on what is agreed between the parties, although in practice this is often made within 14 – 21 days of the COT3 being signed.

How much will it cost?

Unlike Settlement Agreements, there isn’t usually any provision for your employer to provide a financial contribution for you to obtain legal advice.

We would advise that a condition of you agreeing to enter a COT3 would be a reasonable financial contribution towards your legal costs, from your employer, which would be dependent on the complexity of your case.

Settlement Agreements usually provide for a contribution of £350-£500 plus VAT but we sometimes receive costs from the employer of up to £2,000-£3,000 plus VAT in particularly contentious cases.

If you have been offered a COT3 Agreement, please contact us.

We are more than happy to have a free initial chat with you to point you in the right direction.

We advise that you ask for a financial contribution from your employer so that we are able to fully assess your situation. In the event of the employer refusing or their contribution being inadequate, we will provide an estimate of how many hours we will need to assess your case. We will give you a more accurate estimate about how much this will cost once we have received your papers.

Where negotiations break down, we may be able to offer a Damages Based Agreement. This is where we receive a percentage of any compensation you receive, as a result of taking further action. This may include bringing a formal grievance or issuing proceedings.

How we will help

Our experienced COT3 solicitors will advise on the fairness of the sums offered and the tax implications.

We will be able to advise you as to whether the compensation offered by your employer is fair. For example, if we believe you have a claim such as a workplace discrimination or unfair dismissal claim, we will assess its potential value.

We will also consider whether the terms in the COT3 are reasonable. We will also provide guidance on the tax implications of the figures put forward in the Agreement.

It is always your decision as to whether to enter into the COT3, ask for a Settlement Agreement, or make a claim at the Employment Tribunal. Our written advice will mean you are able to make an informed decision about how you wish to proceed.

If you are an employee and require advice and assistance on any Employment Law matter, we can help. Contact us to find out more on 01273 609911, or email info@ms-solicitors.co.uk to find out more.