Did a COT3 cover future claims?

A COT3 is the name given to a written agreement entered into via ACAS to settle actual or potential claims in the Employment Tribunal. They are an alternative to a settlement agreement, but generally will only be used if a settlement of a claim is reached during Early Conciliation, or after a claim has been issued. For more information about COT3s please see our previous FAQs article here.

In the recent case of Arvenescu v Quick Release (Automotive) Limited the Employment Appeal Tribunal had to decide whether a claim brought after a COT3 was signed was covered by its waiver of claims. The COT3 was widely drafted to include the following:

“the payment … is accepted in full and final settlement of all or any costs, claims, expenses or rights of action of any kind whatsoever, wheresoever and howsoever arising under common law, [statute] or otherwise (whether or not within the jurisdiction of the employment tribunal) which the claimant has or may have against the respondent…[and]  applies to a claim even though the claimant may be unaware at the date of this agreement of the circumstances which might give rise to it or the legal basis for such a claim.”

The COT3 was entered into in March 2018 in order to settle a claim of unfair dismissal and race discrimination brought by Mr Arvenescu in 2014.

In early 2018, before entering into the COT3, Mr Arvenescu applied for a job with a German subsidiary of Quick Release.  His application was rejected, and he alleged that it was because he had brought a claim of discrimination in 2014 and that the rejection amounted to victimisation under the Equality Act 2010. He brought a claim of victimisation in the Employment Tribunal and they held that they had no jurisdiction to hear the claim as it was covered by the scope of the COT3 waiver. He applied to the Employment Appeal Tribunal which upheld the Tribunal’s decision. They said that the victimisation claim was linked to Mr Arvenescu’s previous employment by Quick Release and was therefore covered. They said that their conclusion was based on the construction of the clause itself, and it was irrelevant whether or not the parties knew at the date of signing the COT3 that the claimant may have been considering bringing another claim.

The message for employers is clear – make sure the COT3 wording is wide enough to cover situations like this, and get professional help in drafting it.