COT3 Advice For Employers

What is a COT3 Settlement?

When a resolution is reached, the Acas conciliator will record what has been agreed on an Acas settlement form, known as a COT3. Both parties 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, which means that a tribunal claim cannot be pursued regarding those issue, or, if a tribunal claim already has been lodged, it will be closed.

A COT3 is usually offered after a prospective claimant has contacted Acas, but it is possible for employers to initiate Acas involvement, if they consider that relevant proceedings may be issued against them.

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 to understand how the other side views the issues.
• Discuss any proposals either party has for a resolution.

What the Acas conciliator cannot do:

• Cannot know what the outcome of a tribunal hearing would be if it went ahead.
• Cannot advise you whether to accept or make any proposals for resolution.
• Cannot take sides, represent you or help prepare a defence to your employee or worker’s claim.

What are the benefits of using a COT3?

• Agreements are decided by the parties, not imposed by a tribunal. Agreements can cover claims that are outside the jurisdiction of Employment Tribunals such personal injury. Or potential claims in the future about events that have not occurred yet.
• Acas conciliation is free, and often is concluded by a few telephone calls. If you are able to settle your differences, this will avoid the time, expense, risk and stress of defending a tribunal claim.
• Acas doesn’t represent either you or your employee and they are not part of the tribunal system.
• It’s confidential. Settlement discussions cannot be used by you or your employee at a Tribunal Hearing.
• A properly worded COT3, drafted by an expert solicitor, will mean that you have complete peace of mind as your former employee will not be able to bring any claims against your company. It can also safeguard your reputation by including clauses covering confidentiality and the making of non-derogatory comments. Or protect your business by reiterating existing or even introducing new post-termination restrictions which prevent your employee soliciting or dealing with your clients for a period of up to one year from leaving.

What are the risks of using a COT3?

• If a COT3 is introduced, particularly in relation to a workplace discrimination claim, the contents of the Agreement and the way it is given to your employee may become admissible evidence as part of any Employment Tribunal proceedings.
• If you circumvent a fair process such as a capability, disciplinary or redundancy procedure without offering sufficient compensation for this, your employee may refuse to sign and may have strong grounds for negotiating a higher settlement or instigating formal workplace procedures, such as a grievance, in order to bring a claim in the Tribunal.
• The relationship of trust and confidence between you and your employee may be destroyed if the way in which the COT3 is offered is badly managed.
• If the compensation agreed is not paid, a COT3 can be enforced in the same way as an unpaid Tribunal award.

Best Practice Advice

Before involving Acas you should identify where the risk of any future claim may lie and assess your potential financial liability. It may also be wise to use a COT3 where an ex-gratia payment is being made, as in the case of redundancy. This is to ensure that no further claims for compensation can be made against you and/or your company.

In certain situations, it may be necessary to commence “best practice” procedures such as a formal capability, disciplinary or redundancy process before a COT3 offer is made. This ensures that the matter can be resolved, with minimal financial risk and ensures that if negotiations break down, you have an alternative process in place to complete a fair dismissal.

How we will help

We offer comprehensive advice service to ensure your business is protected. In the first instance, we will thoroughly explore the background issues. We will work with you to ensure there is no unintentional discrimination in any aspect of your process. We also review any outstanding contractual, redundancy, disciplinary, capability and grievance matters before advising on a suitable settlement sum.

How much will it cost?

If you have been contacted by Acas about a potential claim or are considering involving them please contact us. We are more than happy to have a free initial chat with you to point you in the right direction.

Our fees for a well-drafted COT3 Agreement are usually between £500 and £1,000 plus VAT, depending on the complexity and breadth of the issues. For example, whether you are reiterating existing or even introducing new post-termination restrictions to protect your business. In addition, you might be asked to pay a contribution to enable your employee obtain legal advice, usually between £350 and £500 plus VAT.

Where possible we will offer you a fixed price for a tailor-made Agreement advice package which will include drafting the COT3 and also negotiations with the employee’s legal representative.

We also offer a multiple redundancy Settlement Agreement sign-off service for employers and trade unions. The service offers a professional and efficient way to sign off multiple Settlement Agreements.

If you are an employer 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.