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ARTICLE · 29 SEPTEMBER 2023

COT3 Or Settlement Agreement? Spot The Differences.

Lewis Silkin
Lewis Silkin
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Lewis Silkin

Lewis Silkin

Joint managing partners: Jo Farmer, Richard Miskella International offices: Dublin, Hong Kong...

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An agreement to waive claims – whether theoretical or about to aired in an employment tribunal – is commonly recorded in either a settlement agreement or a COT3.

United KingdomEmployment and HR

An agreement to waive claims – whether theoretical or about to aired in an employment tribunal – is commonly recorded in either a settlement agreement or a COT3. Although circumstances often dictate which is used, there are in fact differences between the two types of agreement which are important for employers to be aware of.

When seeking to settle an existing or potential employment dispute, employers must ensure that they opt for a mechanism that can effectively waive the threatened or potential claims. Although the waiver of contractual claims – such as damages for breach of contract – requires only the basic building block of "valuable consideration", the rules governing the settlement of statutory claims are far more prescriptive.

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