Key Takeaways
- ACAS early conciliation is a free and mandatory process giving employees a chance to resolve workplace disputes, including redundancy and unfair dismissal, before an employment tribunal claim.
- Starting ACAS early conciliation pauses tribunal time limits, preserving your rights and giving time to negotiate or seek a settlement agreement.
- If you reach a settlement during early conciliation, our solicitors can advise on your agreement at no cost to you, as employers usually pay the legal fees.
- Only an independent SRA-regulated solicitor can provide the legal advice and sign the certificate required to make a settlement agreement legally binding.
- Settling at the conciliation stage can help you negotiate a better ex gratia or tax-free element, protect your reputation, and avoid the uncertainty of a tribunal.
- Our solicitors can review your offer, clarify rights around redundancy pay, and negotiate for increased compensation or improved terms on your behalf.
- Failing to review the agreement or understand terms could mean permanently waiving claims and missing out on a better financial outcome.
- Settlement Agreement Lawyers are rated Excellent with over 1,400 five-star reviews of our lawyers on Trustpilot, Google, and similar platforms, with fast, remote appointment options UK-wide.
ACAS Early Conciliation: How It Works for Settlement Agreements and Redundancy Disputes
If you are considering an employment tribunal claim or have been told your role is at risk of redundancy, acas early conciliation is the mandatory first step to try and resolve your workplace dispute without going to court. The process is free, confidential, and pauses your tribunal time limits—giving you valuable time to explore a fair settlement or even secure a formal settlement agreement. If you receive a settlement agreement offer during these discussions, the law requires that you obtain independent legal advice before the agreement is valid, and your employer almost always pays for our solicitor’s advice and certification.
Signing a settlement agreement usually means permanently giving up your right to bring claims, so it’s essential to ensure any offer is fair, tax-efficient, and genuinely in your best interest. Our solicitors can explain your rights around redundancy pay and compensation, check for key legal risks, and help negotiate better terms—all at no cost to you.
In this detailed guide, you’ll learn how acas early conciliation works step by step, what timelines apply, how the process impacts tribunal deadlines and redundancy cases, and practical tips to protect your future. For expert advice today, call our solicitors on 0800 054 1144 or book your settlement agreement advice online.
What is ACAS early conciliation and why is it required before an employment tribunal claim?
ACAS early conciliation is a process in which the Advisory, Conciliation and Arbitration Service (ACAS) helps employees and employers resolve workplace disputes without proceeding straight to an employment tribunal. Since 2014, it has been a statutory requirement for almost all employment claims in England and Wales that individuals must notify ACAS and consider conciliation before submitting a tribunal claim. This covers issues such as redundancy, unfair dismissal, discrimination, unpaid wages, and more.
The process offers a swift, cost-free, and confidential way for both sides to try to resolve matters early. ACAS conciliation officers act as neutral mediators, clarifying the legal position and relaying settlement offers, but they do not represent either party. Any agreement reached is legally valid and enforceable.
Employees must start ACAS early conciliation before progressing a claim, except in certain rare situations, such as specific collective disputes or limited exemptions. Once complete—whether agreement is reached or not—ACAS issues a certificate you need to submit a tribunal form.
Step-by-step ACAS early conciliation process: what employees need to know
The ACAS early conciliation process gives both employees and employers the opportunity to resolve their dispute in a fair and timely way. Here’s how it typically works:
- Notification: Submit an early conciliation notification form online or phone ACAS with your details and those of your employer.
- ACAS Contact: A conciliator phones you—usually within two working days—to discuss your case and whether you want to proceed.
- Conciliation Period: If you proceed, ACAS contacts your employer and manages negotiations, remaining neutral and not offering legal advice.
- Conclusion: If you reach agreement, terms are put in writing (COT3 or settlement agreement). If not, ACAS provides a certificate so you can submit a tribunal claim.
Keep detailed records of all communications. In redundancy cases, employers might offer enhanced payments via a settlement agreement alongside, or instead of, statutory redundancy pay.
How to start ACAS early conciliation
To start acas early conciliation:
- Visit the official ACAS early conciliation page and complete the online notification form.
- Alternatively, call ACAS directly.
You’ll need your contact details, your employer’s legal name and address, and a short description of your dispute. This initiates “Day A” and pauses your tribunal deadlines.
Before you begin, gather evidence like redundancy consultation notes, selection criteria, contract documents, and all relevant correspondence.
What to expect during the conciliation period
An ACAS conciliator will speak with you to clarify your goals. They then contact your employer to explore settlement options. All communication is off the record and confidential. Conciliation can result in:
- Improved redundancy or exit terms
- Adjusted leaving dates
- Removal of negative references
- Other creative solutions (e.g., retraining support or garden leave)
The process typically lasts up to six weeks but ends earlier if agreement is reached or either party opts out.
Early conciliation outcomes: agreement or certificate
Outcomes are either:
- COT3 agreement: An ACAS-drafted agreement confirming settlement terms.
- Settlement agreement: A tailored agreement (usually during redundancy/mutual exit), requiring your own solicitor’s advice and signature to be legally binding.
- No agreement: If you don’t settle, ACAS issues a certificate allowing you to proceed to tribunal.
If you intend to claim, keep your certificate reference safe as it is required for tribunal submissions.
How does ACAS early conciliation affect tribunal claims and time limits?
Engaging in ACAS early conciliation stops the clock on strict tribunal claim deadlines—usually three months less one day after your employment ends or the issue happened. The period from your notification (“Day A”) to receiving the certificate (“Day B”) is excluded from your deadline.
After the certificate is issued, you will have at least one calendar month, or the remainder of your original deadline if longer, to lodge your tribunal claim.
If in doubt about your deadline, our solicitors can check your paperwork and ensure you stay within time limits. For urgent advice or a same-day remote appointment, call 0800 054 1144 or book your settlement agreement advice online.
Settlement agreements during ACAS early conciliation: how does it work?
Settlement agreements are frequently used to resolve disputes during or after ACAS early conciliation. In many redundancy cases and mutual exits, employers offer a formal settlement agreement to secure finality and ensure all claims are waived. These agreements must be reviewed and signed off by an independent solicitor for you to receive full legal protection, as set out in s.203 Employment Rights Act 1996.
Employers normally pay for your legal advice. Once signed, you waive all claims set out in the agreement, such as redundancy, unfair dismissal, or discrimination.
Reaching a settlement agreement through ACAS
A settlement agreement can be proposed during early conciliation in addition to, or instead of, a COT3. Settlement agreements are more detailed and allow for tailored clauses such as positive references, confidentiality, future restrictions, and specific tax arrangements.
You and your adviser can negotiate the terms directly with your employer or through ACAS. The agreement will outline the financial sum, post-employment restrictions, confidentiality terms, and any other agreed points.
Why independent legal advice is mandatory (s.203 ERA 1996)
The law requires that every employee signing a settlement agreement must receive independent legal advice from a qualified adviser. This protects you from waiving legal rights unknowingly and ensures the agreement is enforceable.
Our solicitors explain:
- Which claims you are waiving
- Future tax liabilities and payment breakdowns
- Any ongoing restrictions (e.g., non-compete clauses)
- Your right to challenge terms if required
This advice is paid for by your employer, and you should not sign until you fully understand every clause.
Employer-funded legal advice: what does it cover?
Almost all employers pay for employee legal advice on a settlement agreement. This ensures you receive a full review, explanation of each term, advice on negotiations, and confirmation of tax and redundancy entitlements—all at no cost to you.
Our solicitors commonly negotiate higher employer contributions if the case is complex or the draft agreement requires significant changes.
Is the financial offer in an ACAS settlement agreement fair?
Determining fairness depends on your claim’s value and the circumstances. ACAS early conciliation settlements often match (or beat) what a tribunal might award, especially once legal risks and costs are considered. Use a Settlement Agreement Calculator or Redundancy Calculator to check your entitlement.
Fair offers typically include:
- Statutory redundancy pay
- Notice pay
- Holiday pay
- Ex gratia payment (often tax-free up to £30,000)
- Employer contribution to legal fees
Enhanced packages may be achieved through effective negotiation if there are weaknesses in the employer’s process.
Typical compensation via ACAS early conciliation
ACAS settlements usually cover statutory (or contractual) redundancy, notice, accrued holiday, and an ex gratia payment. The financial split depends on claim strength, length of service, and the risks both parties face at tribunal. Employers may pay a premium to resolve claims early.
Breakdown details can be found using our Employment Tribunal Compensation Estimator.
Redundancy pay, notice periods, and negotiating for more
Statutory redundancy pay applies if you have at least two years’ service. It’s based on age, length of service, and weekly pay (up to the statutory cap). Notice must be worked or paid in lieu, and all accrued holiday should be paid on exit.
You may negotiate more if:
- Your redundancy process was poorly handled
- You have evidence of discrimination or unfair selection
- The employer wants a swift or confidential resolution
Our solicitors can help you understand redundancy rights and negotiations.
Ex gratia payments: how to check what’s reasonable
Ex gratia sums are discretionary, usually offered for waiving legal claims. Payments are typically tax-free up to £30,000, provided they are not owed under contract or for work done. A fair figure is based on the strength of your case, expected tribunal awards, and negotiation leverage.
Refer to ACAS guidance on settlement agreements to learn more about reasonable ex gratia payments.
| Payment Type | Contractual/Statutory | Tax-Free Up to £30,000? | Negotiable? |
|---|---|---|---|
| Redundancy Pay | Statutory or Contractual | Yes (usually) | Sometimes |
| Notice Pay (PENP) | Contractual | No | Rarely |
| Holiday Pay | Statutory | No | Sometimes |
| Ex Gratia | Voluntary | Yes (up to £30,000) | Yes |
Tax on settlement agreements: what is tax-free, and what is not?
Settlement agreement payments are split for tax purposes. Statutory redundancy pay, voluntary redundancy, and ex gratia sums can be tax-free up to £30,000 if they meet HMRC criteria (government guidance on termination payments). Notice pay, holiday pay, and unpaid salary are always taxable.
The agreement should clearly set out each element—errors can result in underpaid tax and future HMRC challenges.
The £30,000 tax-free rule and ex gratia elements
HMRC allows qualifying ex gratia payments and statutory redundancy pay to be tax-free up to £30,000. Over that threshold, or for contractual sums like notice pay, normal income tax applies. Proper wording in your agreement determines tax treatment.
Payment in lieu of notice (PENP) and tax treatment
Any payment in lieu of notice (PENP) is fully taxable, under HMRC’s post-2018 rules, regardless of your contract’s provisions. Ensure your agreement clarifies how much is being paid for unworked notice and that this is fully taxed.
Common tax risks and liabilities to check
Settlement agreements usually require you to indemnify your employer for future tax liabilities. This means you could be responsible if HMRC later disagrees with the allocation of taxable and tax-free sums. Your solicitor should help clarify and minimise exposure.
Refer to HMRC’s termination payment guidance for the latest official rules.
For advice on tax, redundancy, or payments in your settlement agreement, call 0800 054 1144 or book your settlement agreement advice online. Our expertise is free for employees, as the employer covers our fees.
Key risks in a settlement agreement: clauses to review carefully
Settlement agreements are binding. Employees should pay close attention to:
- Restrictive covenants (non-compete, non-solicit)
- Confidentiality obligations
- References and reputation clauses
- Tax indemnities
- Waiver and warranty clauses
Our solicitors review these clauses to ensure you do not inadvertently give up future rights, become liable for tax, or restrict your career options.
Restrictive covenants and post-employment restrictions
Check whether any restrictive covenants are reasonable in length and geographic scope. Over-broad covenants can be unenforceable, but even unenforceable ones may deter future job opportunities. Always challenge any restrictions that go beyond legitimate business protection.
Confidentiality, references, and reputation clauses
Most agreements require confidentiality regarding terms and circumstances of settlement. Also, reference clauses should ideally include pre-agreed wording. Insist on positive reference provisions protecting your reputation and barring negative statements.
Tax indemnities and waiver of claims: what’s at stake
Tax indemnities can make you liable for any future HMRC reclassification. Waiver clauses set out the claims you are giving up; these need to be defined and limited appropriately, especially concerning future rights or issues you could not have known about.
How to sign and complete your ACAS settlement agreement: step by step
Settlement agreements can be completed fully remotely, often on the same day. The steps are:
- Receive the draft agreement from your employer.
- Book a remote call with our solicitors.
- Our solicitor explains each clause, proposes changes, and negotiates if required.
- Once final, sign electronically or on paper.
- Our solicitor certifies your legal advice (adviser certificate).
- Send the signed versions to the employer.
- Employer makes agreed payment(s) on the specified timeline.
Most employers pay our solicitor directly—there’s usually nothing for you to pay.
Remote and same-day signing process
Our firm provides same-day, fully remote settlement agreement advice and signing. Simply book online, send your draft, and arrange a phone or video appointment for comprehensive advice. This is ideal for urgent deadlines or tight payroll windows.
Legal certificate and employer payment for advice
Every valid settlement agreement needs a legal adviser’s certificate, signed by your solicitor. Our solicitors provide this immediately after review. The employer pays our fee direct (or via you), covering review and basic negotiation or amendments. Extra legal work is often funded by requesting an increased employer contribution.
What happens next after you sign
On signing, your employer processes settlement payments per the agreement—usually in the next payroll. Keep a copy of all paperwork (agreement, legal adviser certificate, P45, and reference). Chase HR immediately if there are any delays or discrepancies.
If an employer fails to pay or breaches the terms, you have a legally binding contract you can enforce through the courts.
Why Choose Settlement Agreement Lawyers?
Selecting the right legal experts during ACAS early conciliation and settlement agreement negotiations is crucial. Our solicitors are SRA-regulated employment law specialists, offering:
- Same-day, fully remote support and rapid legal certificates
- Strategic negotiation for better terms and maximised compensation
- Transparent advice on redundancy, tax, restrictions, and reference clauses
- No cost to employees—our fees are paid by your employer
- Proven experience, demonstrated in our client success stories
We also offer easy-to-use calculators for redundancy, settlement agreement, and employment tribunal compensation.
Frequently Asked Questions About ACAS early conciliation
Is ACAS early conciliation compulsory before a tribunal claim?
Yes. Nearly all tribunal claims require you to complete ACAS early conciliation first. If you don’t include the certificate with your tribunal form, your claim will be rejected unless a rare formal exemption applies. Start the process as soon as possible to protect your deadlines.
What happens if early conciliation is unsuccessful?
If settlement isn’t reached during conciliation, ACAS issues a certificate enabling you to proceed to a tribunal. You have at least a month or the rest of your original time limit (whichever is longer) to submit your claim. Save this certificate carefully to avoid unnecessary problems.
How long does ACAS early conciliation take?
The process can last up to six weeks but often resolves much sooner if both parties are engaged. If urgent, you can ask ACAS to issue a certificate immediately, particularly if tribunal deadlines are near.
Can I get a settlement agreement during ACAS early conciliation?
Yes. Settlement agreements are regularly used to resolve disputes early, often providing enhanced terms, certainty, and confidentiality for both sides compared to a tribunal.
Who pays for legal advice on a settlement agreement?
Your employer almost always pays for your independent legal advice as part of the settlement. Our solicitors review your agreement, explain every clause, and certify the deal, all usually at no cost to you.
How does early conciliation affect my redundancy case?
ACAS early conciliation lets you negotiate redundancy selection, pay, references, and terms confidentially—without tribunal stress or cost. It preserves your rights and often results in a better financial outcome than statutory minimums.
What should I prepare before starting early conciliation?
Prepare your contract, redundancy or dismissal letters, payslips, appraisals, grievances, and any evidence of unfair selection or discrimination. Well-organised evidence supports stronger negotiation and can speed resolution.
What should be included in an ACAS settlement agreement?
A good settlement agreement will specify financial payments (redundancy, notice, ex gratia), agreed reference wording, confidentiality requirements, restriction details, claim waivers, and tax treatment. Your solicitor should check every term for fairness and clarity.
Book a Same-Day ACAS Early Conciliation Advice Call
ACAS early conciliation is essential for resolving workplace disputes, protecting your legal rights, and securing a fair settlement before tribunal proceedings. As covered above, understanding each step, negotiating wisely, and checking settlement terms—including tax treatment and post-employment restrictions—all play a crucial role in achieving the best outcome for redundancy, unfair dismissal, or discrimination cases.
Our solicitors offer expert, independent legal advice—free to employees as the employer covers our fees. You benefit from rapid, same-day remote appointments with SRA-regulated specialists experienced in settlement agreement negotiations, tax and payment checks, and ensuring all your interests are protected.
For clear, practical support on your ACAS early conciliation or settlement agreement, call Settlement Agreement Lawyers now on 0800 054 1144, or book your settlement agreement advice online for a same-day remote appointment.
Karim Oualnan, Partner
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