Settlement before tribunal

[GeraldineFangedVagine]

I was wondering if anyone can help me with this. I was engaged in tribunal proceedings with my previous employer and we agreed to settle before the hearing. We signed a contract where they agreed to pay me x amount within 28 days. They have paid me 2/3 of the amount and 2 days late. What recourse can I take now?

I presume you used a solicitor to negotiate and create the legally binding settlement agreement? If so they should be ensuring the company pays what was agreed.in the SA.

Was it settled through acas or via a settlement agreement signed off by solicitors?

Are you sure that some of it wasn’t subject to tax and NI? It seems odd that they would only send you two thirds?

although that ought to have been reflected in the COT3/settlement agreement

Thanks for the replies. A solicitor organised everything for me. It was a COT3 agreement and stated that the figure was a round one and to be paid by 28 days from signing. Say it was 7500, they have paid 4588.22 for example. Solicitor is on holiday now, I just wondered if this was usual or like a pop suggested taxed or suchlike. It’s weird it was late and a strange figure.

what was the clam for. If it was unlawful deductions from wages for example it will have been taxable.

A third is usually equates to tax, NI and possibly pension deductions.

What was the breakdown of payment? How much was ex gratia and how much was payment in lieu of notice and holidays etc?

So the claim was for constructive dismissal and disability discrimination. There was no breakdown of figures on the COT3. The payment was to drop the case and settle before the tribunal date.

If it was to be taxed should it not have said that on the agreement, rather than x employer will pay you x amount within 28 days. Please excuse my ignorance, I’ve never had to understand something like this before. Thank you for the replies.

When I resigned, they paid me my notice and holidays. Could they have deducted this?

Income from employment is always taxed other than some redundancy payments. Why on earth would this need to be stated!

It’s not wages it’s compensation. This shouldn’t be taxed by the company (www.financial-ombudsman.org.uk/publications/guidance/comp_tax.htm)

I’m not a lawyer but I’m pretty sure that’s how it stands. To be honest you need to speak to your lawyer about this. It sounds to me like they’re trying to short-change you. I hope your payment was good, because disability discrimination is uncapped.

HMRC have recently changed this. There is now what is called Post Employment Notice Pay and some compensation payments are subject to this.

I would contact the solicitor's firm and see if someone else can help. If they definitely owe you the money the solicitor can chase. It's unlikely you an take much action, beyond getting them to pay the money.

With COT3/settlement agreement the blanace is always in favour of the employer.

The rules have changed on this but generally when we pay a settlement if it is under £30,000 there is no statutory deductions to be made. I would call the payroll office to ask.

www.masonbullock.co.uk/tax-on-settlement-agreements/

Read this, it follows my train of thought

Thanks everyone for taking time out to answer me, much appreciated. I looked at the COT3 and it does say that as far as the respondent knows it’s a tax free payment and if it should be subject to tax at a later date they will tell me. So I think they have messed up. Again. Had I known I would lose a third to tax I would have gone through with the bloody tribunal. Oh well, guess I will wait for my solicitor to get back from hols. Thanks again all.

If its discrim and UD it is likely to be tax free but your solicitor needs to look at this.

Essentially they can only ever say "they believe it to be tax free" or intend it to be. HMRC are the ones who decide. It is wise to get them to be as specific as possible in the agreement as to when your notice was issued, what your notice period was and any amount of the money that is tax free and what would be taxed. It can be a portion of it that is taxed.

OP your post is confusing. COT3 is different to a settlement agreement. If what you have is genuinely a COT3 it has to be organised via ACAS, and they will enforce all terms and conditions direct with your former employer. You don't have to wait for your solicitor to get from holiday, you should contact ACAS. Their helpline will be open tomorrow Monday and all next week.

This, on the ACAS website

m.acas.org.uk/index.aspx?articleid=1342#/index.aspx?articleid=2635

What should I do if the payment due under the settlement is not made?

You can phone the conciliator who can contact the Respondent to remind them of their obligations under the settlement and that the settlement can be enforced through the courts. Alternatively you can contact the Respondent yourself, or ask your representative if you have one to do so.

When you call ACAS have the document in front of you so you can give them any information they need including the name of the ACAS conciliator who acted on your behalf.

The Acas helpline number is 0300 123 1100. It is available Monday to Friday 8am-6pm.

Thanks daisy chain. It’s definitely COT3 but was organised completely through my union appointed solicitor. He is back today and is chasing it up for me. I was a bit stressed last week as this whole thing has been horrific. Thanks for all the advice