Yes, maybe. Schools should be aware that an unclear COT3 settlement agreement could allow an employee to bring future employment tribunal claims.
COT3 agreements
An ACAS COT3 agreement is used to settle existing employment
tribunal claims. The COT3 will only successfully bar those claims
which are specifically set out in the agreement. Schools which
enter into a COT3 or, indeed, any settlement agreement should aim
to ensure that the wording is clear enough to bar any future claims
which could be brought by the employee.
The facts of the case
Mrs Brindley works for the Department of Work and Pensions (DWP).
She brought a disability discrimination claim (Claim 1) in the
Employment Tribunal relating to a final written warning under the
attendance management policy (AMP) issued in April 2014. Claim 1
was settled through a COT3 in December 2014. The COT3 specifically
settled Claim 1 and all other "Relevant Claims [that is claims
relating to Mrs Brindley's employment with the DWP] arising
from the facts of the Proceedings up to and including the date of
this Agreement".
Mrs Brindley brought a further disability discrimination claim (Claim 2) in June 2015. Claim 2 related to another final written warning under the AMP issued to Mrs Brindley in December 2014.
The decision
An employment tribunal found that Claim 2 could be brought by Mrs
Brindley as the COT3 specified Claim 1 and all other Relevant
Claims "arising from the facts of the Proceedings". The
employment judge determined that this phrase referred to any claims
arising from the first final written warning and that it could not
reasonably be taken to include the second final written warning.
The EAT agreed.
Comment
Schools may decide to enter into a COT3 or settlement agreement in
an attempt to draw a line under an employee's complaint or
claim. The advantage of this course of action will usually be the
supposed certainty that the employee cannot bring
employment-related claims in future. However, this case highlights
the potential for continued uncertainty where future claims are not
properly specified. Particular care will be needed where, as in
this case, schools are dealing with the claims of an on-going
employee.
We recommend that legal advice is taken on the wording of both ACAS COT3 agreements and settlement agreements.
EAT case report: Department for Work and Pensions v Brindley (Practice and Procedure: Compromise) [2016] UKEAT 0123_16_1711 (17 November 2016)
Additional matters
All schools must note that:
- Settlement payments exceeding £50,000 must be cleared with EFA. Settlement payments of any amount must be approved by the directors of the academy trust as being in the trust's interests.
- Following new rules expected to come into effect early this year, the Secretary of State will have power to cap settlement payments at £95,000.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.