Under the auspices of Acas, employment disputes can be formally compromised by way of so-called ‘COT3’ agreements, thus obviating the need for litigation. However, as a guideline ruling showed, such agreements are unlikely to be worth the paper they are written on if they are entered into under duress.
The case concerned a stable lass who lived in tied accommodation. When faced with disciplinary proceedings, she entered into a COT3 agreement with her employer. She subsequently lodged Employment Tribunal (ET) complaints of unfair dismissal and pregnancy/maternity discrimination. The employer asserted that, in light of the COT3 agreement, the ET had no jurisdiction to hear her case.
In addressing that matter as a preliminary issue, the ET found that the disciplinary allegations against her were unsubstantiated. Pregnant at the time, she was highly dependent on her employment and, in particular, her tied accommodation. She believed that she was homeless and would be sacked.
The employer had indicated its intention to dismiss her and had restricted her access to her tied home. It had induced her to enter into the COT3 agreement by telling her that it was for her benefit in that she would receive notice pay and be provided with an eviction letter, which she urgently needed in order to establish an entitlement to local authority housing as an unintentionally homeless person.
In ruling that she had entered into the COT3 agreement under duress, the ET found that she had acted in haste and under illegitimate pressure. She had no access to legal advice, whilst the employer was represented by a solicitor. The only financial benefit to her was two weeks’ notice pay, to which she would have been entitled in any event. The COT3 agreement was clearly to the employer’s advantage in that it terminated her employment with immediate effect, together with her right to occupy her tied home and any other associated liabilities.
In rescinding the COT3 agreement, which was neither valid nor enforceable, the ET accepted jurisdiction to consider her complaints.