The Employment Appeal Tribunal (EAT) has handed down its decision in Allma Construction v Bonner, which confirms that, in deciding whether a settlement has been concluded through ACAS, it is irrelevant whether the ACAS officer believes that a settlement has been reached or whether there are terms which have not been agreed that would normally be included in a COT3 agreement. A COT3 Agreement is signed by both parties to bring proceedings to an end. Under the agreement, one party will usually be paid a settlement in return for waiving his/her rights to bring any (and continue its) employment claim against the other.
The consultant of the respondent communicated an offer directly to the solicitor of the claimant to settle the case for £1,000. The solicitor of the claimant indicated acceptance of the offer through an ACAS officer but did not say that the contract was subject to agreement of the wording of a COT3. On the facts, it was held that a binding settlement had been reached. It is only necessary for the essentials of a contract to be agreed and this may consist of no more than an agreement that a sum of money be paid to bring litigation to an end. The ACAS officer had done enough to have “taken action” for the purposes of s.203 of the Employment Rights Act and, therefore, there was no need for the parties to enter into a written compromise agreement.
This is a helpful decision for employers who are negotiating settlements during Tribunal proceedings. If an employee tells the ACAS officer that they accept a settlement offer from their employer, this should be good enough and, if they subsequently refuse to sign the COT3 agreement, the employer (assuming the ACAS officer is in agreement with them that the settlement was accepted) should still be able to rely on the settlement to dismiss any employment-related claims by the employee.
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