COT3 agreement

Most employment disputes never reach a hearing — and a large share of them end on a one-or-two-page form recorded by an ACAS conciliator.

Do I need a solicitor to sign a COT3?

No. Unlike a settlement agreement under section 203 of the Employment Rights Act 1996, which is only valid if the employee has taken advice from a relevant independent adviser, a COT3 is binding because the agreement was reached through an ACAS conciliation officer. That is one of its main attractions for employers — and a reason for claimants to think carefully before agreeing, because no adviser has to check the deal first.

When does a COT3 become binding?

When both sides communicate their agreement to the terms through the conciliator — which can happen verbally, before anything is signed. The COT3 form itself is the written record of an agreement that already exists. Backing out after telling ACAS you accept, but before signing, is generally too late.

What happens if the employer does not pay the COT3 money?

A COT3 is enforceable. Sums payable under an ACAS-conciliated settlement can be recovered through the civil courts under the Employment Tribunals Act 1996 framework without starting a fresh claim from scratch, broadly as if the sum were owed under a court judgment. In practice a warning letter referring to enforcement is often enough.

Can a COT3 settle all my claims, including ones I have not thought of?

A COT3 settles the claims described in its wording, and employers usually draft that wording widely — often covering all claims arising from the employment or its termination. Tribunals and courts give effect to clear wording, so read the scope carefully before agreeing: unlike a section 203 settlement agreement, no independent adviser is required to walk you through it.

Is COT3 money taxable?

It depends on what the payment is for. Payments of wages or notice pay are generally taxed as earnings, while genuine compensation for loss of employment may benefit from different treatment up to statutory limits. The tax treatment follows the nature of each element of the payment, not the COT3 label — check current HMRC guidance for your situation.

Does a COT3 stop the tribunal claim?

Yes. If a claim has already been presented, the settlement leads to it being dismissed or withdrawn on agreed terms. If no claim has been presented yet — for example, settlement during ACAS Early Conciliation — the COT3 prevents the settled claims being brought at all.

Employment Tribunal · Glossary

Most employment disputes never reach a hearing — and a large share of them end on a one-or-two-page form recorded by an ACAS conciliator.

Last reviewed: August 2026

Employment Tribunal track

is the record of a settlement reached through an ACAS conciliation officer — a legally binding agreement that resolves the employment dispute on the recorded terms, without the employee needing independent legal sign-off.

Where this comes from

Employment Tribunals Act 1996

— the conciliation framework under which ACAS officers act, and the enforcement route for conciliated settlement sums.

Employment Rights Act 1996, s.203

— why ACAS-conciliated agreements can validly waive tribunal claims.

ACAS — Early Conciliation

— how conciliation and COT3 settlements work in practice.

Employment law is unusually protective about settlement: section 203 of the Employment Rights Act 1996 makes most attempts to contract out of tribunal claims void. Only two doors exist. One is the

, which requires the employee to receive advice from a relevant independent adviser before signing. The other is settlement

— and the COT3 is what that looks like on paper.

The form takes its name from an old ACAS case-numbering convention, and its content is usually short: who pays what, by when, which claims are settled, and any extras such as an agreed reference or confidentiality wording. Its power comes not from its length but from how it was reached — through a conciliation officer acting under the Employment Tribunals Act 1996.

Choosing between the two routes is a real decision. A settlement agreement usually comes with the employer contributing to the cost of the independent adviser, longer and more detailed terms, and time to reflect. A COT3 is quicker and cheaper, the conciliator is neutral rather than on either side, and there is no adviser requirement to slow things down — which cuts both ways. Employers often prefer the COT3 route for speed; claimants should treat that speed as a reason to slow themselves down, value the claim properly, and only then say yes.

How a COT3 settlement happens

• Every prospective claimant contacts ACAS for
• before presenting a claim; conciliation can also continue after a claim is issued, right up to the hearing.
• Offers pass through the conciliator.
• The ACAS officer relays positions and offers between the parties. These discussions are protected, so neither side can use them as evidence later.
• Agreement is reached — and binds.
• Once both sides communicate acceptance of the terms through the conciliator, the settlement is binding, even before anyone signs the form. The COT3 document records what has already been agreed.
• A presented claim is dismissed or withdrawn on the agreed terms; a prospective claim can no longer be brought for the matters settled. Payment follows on the timetable the COT3 sets.

How it works in practice

A warehouse worker dismissed without proper procedure notifies ACAS and begins Early Conciliation. His schedule of loss puts the claim's realistic value around £8,000–£10,000, but a hearing is many months away and the outcome uncertain. Through the conciliator, the employer offers £6,500 and an agreed reference.

Offer accepted via conciliator

Agreed neutral reference

Payment deadline in COT3

as listed in the COT3

He accepts by phone; the deal binds at that moment. The COT3 arrives for signature days later, recording the terms. When payment is late, a letter noting that COT3 sums are enforceable through the courts produces a bank transfer within the week — no fresh claim needed.

• Agreeing verbally, then having second thoughts.
• Acceptance through the conciliator binds. Treat every figure you approve on the phone as final, not as an opening position you can revisit at signature.
• Not reading the waiver wording.
• COT3 wording often settles all claims arising from the employment, sometimes including future claims connected to it. No independent adviser is required, so the reading is on you.
• Ignoring tax structure.
• How the payment is split — wages, notice, compensation — drives its tax treatment. Clarify the breakdown before agreeing, not after.
• Letting the time limit drift during talks.
• Conciliation pauses the
• only in the specific way the Early Conciliation rules provide. If talks fail, the remaining time can be short — know your deadline before you negotiate.

Frequently asked questions

Sources & further reading

• Employment Tribunals Act 1996
• (legislation.gov.uk)
• Employment Rights Act 1996, section 203
• Employment tribunals

Talking to ACAS about your dispute?

Start My Claim helps you value your claim and prepare for conciliation with a clear schedule of loss.

Last reviewed: August 2026.

References checked against the Employment Tribunals Act 1996 and ACAS guidance as at 3 August 2026.

This page is explanatory only and is not legal advice. Start My Claim is self-service software, not a law firm — its tools help you build and run your own case.