A COT3 is a form of settlement agreement that records the terms of settlement of an employment tribunal claim (or potential claim, if settled before an ET1 form is filed). The terms will reflex what has been agreed between you and your employer with the assistance of a conciliation officer employed by ACAS. A COT3 agreement will end the tribunal claim as a full and final resolution to your dispute.
This agreement does not need to be recorded on a COT3 form. It can be agreed between you and your employer in writing or orally with the help of a conciliation officer and it will still be valid and binding. It is advisable to obtain a COT3 agreement in writing so the terms are clear to both you and your employer.
You should ensure that you are happy with the terms reached before you communicate them to the conciliation officer. If a COT3 has been drafted check the final version and ensure you are happy with all the terms. Once you communicate the terms of your agreement to the conciliation officer, the agreement cannot be changed. A verbal agreement will be binding. Before you make a verbal agreement, it is a good idea to ask to be provided with a draft COT3.
When the COT3 has been agreed, the tribunal will no longer be able to hear your claim. If you have issued a tribunal claim, your conciliation officer will notify the tribunal that the claim has been settled.
When the COT3 has been agreed, the tribunal will no longer be able to hear your claim. If you agree to a COT3 during early conciliation, your conciliation officer will notify the tribunal that the potential claim has been settled. If you have already submitted an ET1 form, you may be required to contact the tribunal to inform them that your dispute has been settled and you are therefore withdrawing your claim.
Unlike Settlement Agreements, there is no requirement for you to obtain independent legal advice for the COT3 to be binding. Your conciliation officer should explain the terms of the COT3 and their effect.
Considerations when negotiating a COT3
A COT3 is a type of settlement agreement. When settling a dispute, you want to be comfortable with the outcome. There is always a bit of give and take required in any type of settlement negotiation. However, some additional points, specific to COT3 are set out below:
- The conciliation officer will work to a standard COT3 template. This does not mean that you have to agree to every clause. You can negotiate for clauses to be changed, added or removed.
Negotiating a reference
- If, as part of your settlement, you want a reference, this should be stated in the COT3. An example of the reference wording should be included as an Appendix to the COT3 agreement.
- An example clause with regard to a reference could read: ‘On receipt of a reference request for the Claimant on behalf of a prospective employer, the Respondent shall provide a reference in the form attached at Appendix 1 and shall provide no further information.’
- The conciliation officer cannot write the reference for you. It is for you to agree the wording with your employer. The conciliation officer can facilitate these communications, for example, by emailing the draft reference to your employer on your behalf. It is sometimes helpful for you to initiate the first draft and allow the employer to add and amend as they see fit. When you receive their amendments, you can suggest further changes if you are not satisfied.
Negotiating the settlement figure
- When negotiating a sum of money, it is helpful to be realistic. If your claim proceeds to hearing, the tribunal will apply specific thresholds to the amount you can be awarded. It may be useful to read our ‘Calculating Damages’ page to better understand the tribunal’s approach to compensation.
- The main benefit to the employer of settling instead of proceeding to the tribunal is typically saving time and money. Asking for what you could realistically be awarded at tribunal is a good starting point. Your employer may also be paying for legal representation. Therefore, there is another cost incentive for them to resolve the dispute quickly.
- Showing how you reached your requested settlement figure is also a great negotiating tool. Always approach negotiation in a well thought-out, diplomatic manner. Avoid plucking figures out of thin air.
- Do not take offense if your employer’s counter-offer is low. If you would not be comfortable with that outcome, simply decline the offer. Do not be intimidated. It is quite normal to go back and forth in order to reach an agreeable figure.
- Timing of the payment will be an issue for both parties. Your employer will want to ensure that the proceedings have been withdrawn before payment is made whereas you will want to continue proceedings in the event that payment is not made in accordance with the settlement terms. You should push for payment to be made within 14 days of the COT3 being signed. Timing of payment should be clearly stated in the COT3 agreement.
Full and final settlements
- A COT3 settlement will, unless expressly stated otherwise, only operate to settle the proceedings specified in the agreement. Any references to payments made in full and final settlement will need to be expressly given and will be limited to claims which you and your employer were aware of at the time.
- Your employer may seek to settle future claims – you should resist this.
Failure to Pay
There are various options available to you to enforce payment. If the employer does not pay the agreed sum within the time frame specified in the COT3 agreement, you can:
Inform Acas that you have not been paid
Acas cannot enforce payment, however, than can contact the employer and remind them of the terms of the agreement
Use the free penalty enforcement scheme:
- The government provides a free service called the ’employment tribunal penalty enforcement and naming scheme’. It’s not just for employment tribunal awards – you can use it for your COT3 agreement.
- You can download the form from GOV.UK
- Forms can be filled in electronically and emailed to ETPenalties@beis.gov.uk. You must also attach a copy of your COT3 agreement to the email. Forms can also be printed and mailed to the address provided.
- The employer will be issued a Warning Notice that they will incur a Government penalty if they do not pay you within 28 days
- The Government penalty is up to £5,000.
Get a court to force them to pay
You can use the services of a High Court Enforcement Officer (HCEO) operating through Acas and Employmemt Tribunal Fast Track.
- You can download the EX728 Enforcement form here
- You must send the completed form, together with a copy of the COT3 and payment for the court fee to issue the writ of control. The court will add this fee to the amount the employer already owes you. You can access further information on court fees here.
- The employer will receive a warning notice giving them 28 days to pay you.
- If all goes well, you will receive the amount of your judgment with interest at 8% and costs which will cover your initial court fee.
This advice applies in England, Wales, Scotland and Northern Ireland. If you live in another part of the UK, the law may differ. Please call our helpline for more details.
If you have further questions and would like to contact our advice team please use our advice contact form below or call us.