Settling Claims – Settlement Agreements and COT3 Agreements

Things do go wrong and Employment Tribunal claims can be made. If that happens, then it might be in your best interests to consider settling. This might be, for example, where it would be disproportionate to fight a claim all the way to a contested Employment Tribunal hearing.

Employment claims are settled by using either a Settlement Agreement or a COT3.

A Settlement Agreement is a contract between the employee and your business, setting out the terms upon which an employment dispute is resolved. The employee surrenders their right to sue in return for a payment. Very often employment terminates at the same time. In order for a Settlement Agreement to be binding, your employee must receive independent legal advice. It is usual (although not a requirement) for you to make a contribution towards that cost.

A COT3 agreements also settles employment claims. It is used when ACAS are involved in negotiating a settlement.

Care is needed to prepare an appropriate agreement, especially where there are post termination restrictions known as restrictive covenants.

We take the time to really get to know your business and if you decide to settle, what actually needs to be included within any agreement. We can also advise you upon the best approach to ensure the dispute is resolved with minimal worry and to protect your position moving forward.