As a quick reminder, COT3 agreements are used to settle employment claims. They are similar to settlement agreements, but are usually shorter, more simply drafted and follow conciliation from ACAS (either during the early conciliation process or following commencement of tribunal proceedings).
In Arvunescu v Quick Release (Automotive) Limited , Mr Arvunescu had only been employed for a month (in 2014) when his employment was terminated. He alleged that he was discriminated on grounds of race and, eventually in May 2018, entered into a COT3 agreement, settling the claims he had against the Respondent. The COT3 included broadly-drafted wording to settle all claims that Mr Arvunescu “has or may have” against the Respondent “arising directly or indirectly out of or in connection with” his employment.
In May 2018 the Claimant brought new proceedings against the Respondent, alleging victimisation. The Claimant had applied for a job with a company based in Germany (which was a wholly-owned subsidiary of the Respondent) but was rejected in February 2018 (before he signed the COT3 agreement with the Respondent). He alleged that this rejection amounted to victimisation, because he had previously brought a discrimination claim against the Respondent, and he believed he was being subjected to a detriment (not being given the job) for making a protected act against the Respondent.
The Court of Appeal held that the victimisation claim did fall within the scope of the COT3. The COT3 intended to settle all claims that existed at the date of the agreement (March 2018) whether or not they were known about at that date. The victimisation claim related to events in February 2018, so it existed at the date of the agreement. Mr Arvunescu’s claim for victimisation was therefore dismissed.
This case is a good reminder of how important it is to carefully consider the drafting of COT3 agreements. Potential employment claims, based on facts in existence at the time, can be settled under the terms of a COT3 provided the drafting is sufficiently wide to cover it. In our experience, COT3 agreements can be drafted narrowly. However, like a settlement agreement, the purpose of these types of agreements is to achieve a “clean break” between the parties, and it is important that this is reflected in the drafting. However, do remember that any settlement agreement (including COT3 agreements) will only cover existing claims and not future claims unknown to the employee at the time that the agreement was concluded.
This is only intended to be a summary and not specific legal advice. If you would like further information or advice, please do contact a member of our team.