Home > FAQ > Employment Law FAQ's > Are there different types of a settlement agreement?

Yes, there are two – the settlement (compromise) agreement explained above, and the COT3 agreement.

A COT3 is when both parties settle on terms of an employee’s contract termination through Acas (the Advisory, Conciliation and Arbitration Service) conciliation. This happens where the worker at first thinks they want to begin an Employment Tribunal case, but after conciliation through Acas, the parties decide to settle out of court.

This type of agreement ensures that neither party can instigate a claim in future. Going through Acas also means that the claim can be resolved without legal advice, which means less of an expense for both parties, although you are free to obtain it if you wish.

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