What is settled under a COT3?

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When the parties enter a COT3 it is either to settle an existing ET case via ACAS or a dispute before proceedings are issued and can include termination of employment.  Sometimes there is an attempt to widen the settlement of claims to include future claims which claimant solicitors often resist. COT3 agreements differ from settlement agreements as they are brokered by ACAS.

It is quite rare for a case involving a COT3 settlement to appear before the Courts and even rarer to have a Court of Appeal authority on the issue.  The Court of Appeal in Arvunescu v Quick Release Ltd at the end of last year have found that a COT3, in circumstances where it is sufficiently widely drafted, can prevent a further claim by the same claimant against the respondent subsequently.

In this case the claimant had a short employment with the respondent which terminated in 2014.  The claimant brought proceedings for race discrimination. In March 2018, the claimant settled his claims under a COT3.  It is not clear from the Court of Appeal judgment why the initial claim would have still been going for 4 years and took so long to settle.

In May 2018, the claimant issued a new claim for victimisation against the respondent. The claimant applied for a new role in January 2018 with a German company which was a subsidiary of the respondent.  In February 2018, he was rejected for the post and alleged that the rejection was because he brought proceedings for race discrimination previously thus an act of victimisation. The issue arose as to whether the COT3 signed in March 2018 in respect of the original claim prevented the claimant from bringing this new claim as the respondent argued.

At first instance in the ET, the Tribunal agreed with the respondent and found that the COT3 covered this claim and the case could therefore not proceed.  The claimant appealed to the EAT who agreed with the Tribunal.  The claimant further appealed to the Court of Appeal and his appeal was dismissed.

The Court of Appeal found that although the new victimisation claim did not arise directly or indirectly out of employment, the COT3 (which the parties did not want to reveal in its full form) was sufficiently widely drafted to include claims indirectly in connection with employment.  The Court of Appeal provided a detailed analysis of the claim and it considered the context of the COT3 to be highly pertinent.  The Claimant relied on the discrimination claim as the protected act for the victimisation claim and the intention of the COT3 was to settle all claims that were in existence at the time and connected to his employment.  With the dates of the application, rejection and COT3 the victimisation claim pre-dated the COT3 so that claim was in existence at the time of the COT3.  The Court of Appeal agreed with the decision of the ET and EAT on this point and the Claimant’s claim failed.

Written by
Astons Solicitors
10th January 2023