{"id":706,"date":"2022-02-16T11:57:13","date_gmt":"2022-02-16T11:57:13","guid":{"rendered":"https:\/\/www.abhrsolutions.co.uk\/?p=706"},"modified":"2022-02-16T11:57:13","modified_gmt":"2022-02-16T11:57:13","slug":"out-of-court-settlements","status":"publish","type":"post","link":"https:\/\/www.abhrsolutions.co.uk\/out-of-court-settlements\/","title":{"rendered":"Out of Court Settlements"},"content":{"rendered":"

In the world of HR Support, we spend much of our time sorting and settling cases before they get anywhere near an Employment Tribunals saving legal costs and the risk of reputational damage because Tribunal proceedings are open to the public.<\/p>\n

So, let\u2019s answer a few questions?<\/p>\n

What are \u00a0Settlement agreements and ACAS COT3s?<\/h2>\n

These are both forms of agreement between an employer and an employee where the employer agrees to pay the employee a sum of money \u2013 often on the basis of \u201cno admission of liability\u201d and in return the employee waives any rights that they may have to pursue any actions against the employer arising out of the termination of employment.<\/p>\n

Both are legally binding but there are slight differences.<\/p>\n

A settlement (previously called compromise) agreement is invariably used for middle\/senior level terminations and the employer is required to give the employee a sum of money \u2013 often about \u00a3500 \u2013 to take legal advice on the proposed settlement. A settlement agreement is only binding where there is a certificate signed by a solicitor to confirm that the employee took legal advice prior to signing the agreement.<\/p>\n

A COT3 is facilitated by ACAS and is commonly used as an alternative to a settlement agreement. An agreement is drawn up to set out the basis of the agreement and ACAS then manage the conciliation process between the parties and reach a legally binding agreement. A form \u2013 called a COT 3 \u2013 is then signed by the parties and is legally binding.<\/p>\n

When might you use either a settlement agreement or an ACAS COT3?<\/h2>\n

They are used where there is a potential dispute between employer and employee often arising out of a termination and there is a risk that the employee will pursue a Tribunal action and the preferred course of action is to settle out of court to prevent a long and protracted process.<\/p>\n

You might use them in situations where an employee<\/p>\n