Acas early conciliation gives SME employers the chance to settle a workplace dispute before it reaches an employment tribunal. It is free, confidential and voluntary. But an invitation to discuss a claim is not something to ignore, particularly if the allegations concern dismissal, discrimination or unpaid wages.
If Acas contacts your business, it doesn’t mean a tribunal has decided the employee is right or even that proceedings have been issued. It means the person is considering a claim and is willing for Acas to explore whether an agreement can be reached.
This guide explains how Acas early conciliation works for employers, how to assess the risk, what to consider before making an offer and when instructing a solicitor can make a material difference.
What is Acas early conciliation?
Acas early conciliation is a free service provided by the Advisory, Conciliation and Arbitration Service. An independent conciliator communicates separately with the worker and employer, looking for a mutually acceptable resolution without needing an employment tribunal hearing. Acas does not take sides, determine the facts or impose a settlement.
For most employment tribunal claims, a prospective claimant must notify Acas before submitting an ET1 claim, unless an exemption applies. Once Acas has the necessary information, the worker can choose whether they want the conciliator to approach the business. The employer can then decide whether to participate.
Under Acas’s current guidance, early conciliation may last up to 12 weeks. A case may end sooner if the parties settle, either side chooses not to continue, or a resolution appears unlikely. Unlike a formal hearing, there is no obligation to attend or accept an offer.
| Early conciliation | Employment tribunal |
|---|---|
| Independent Acas conciliator facilitates discussions | A judge determines disputed legal claims |
| Voluntary participation and settlement | Formal claim, response and procedural obligations |
| Can address remedies and practical terms flexibly | Tribunal remedies depend on the claims and law |
| Usually remains private between those involved | Hearings and judgments are generally public |
The process is different from an internal grievance, disciplinary appeal or a separate settlement agreement. Businesses can and often should address concerns internally before matters escalate, but the employee’s tribunal time limits continue to run during ordinary workplace procedures. Acas explains the time-limit rules.
How does early conciliation work for an employer?
- Acas receives a notification. An employee or former worker tells Acas they are considering a tribunal claim.
- Acas may contact your business. If the claimant agrees, a conciliator explains the dispute and asks whether you wish to take part.
- You discuss the case separately. The conciliator normally speaks to the parties individually, rather than requiring them to confront one another.
- Proposals may be exchanged. These can involve payment, a reference, corrections to records, an agreed departure or other lawful and workable terms.
- The process ends. If agreement is reached Acas records it in a COT3. Otherwise, the claimant may receive an early conciliation certificate and decide whether to bring proceedings.
Acas may ask for a basic summary of the employer’s position, but the conciliator is not your legal adviser. They cannot tell you what a judge is likely to award or whether a particular settlement figure is commercially sensible. Their role is to facilitate discussions.
If the employee notifies Acas within the applicable tribunal limitation period, their time limit is normally paused while the early conciliation process operates, subject to statutory calculation rules. For many claims the ordinary period is three months less one day, but individual claims can differ. For an SME, the safe assumption is to check dates rather than relying on an informal approximation.
An employer can also approach Acas to request early conciliation where it expects a dispute could lead to a claim. However, an employer-initiated notification does not pause the employee’s tribunal time limit.
A conciliator is not a decision-maker
Our perspective
Employers sometimes respond to an initial Acas call as though they have already lost a case. That is not what the contact means. The relevant question is whether there is a credible claim, what evidence supports your position and whether a sensible resolution is available.
You can explore settlement without admitting that the business acted unlawfully. But agreeing too quickly, before checking documents and exposure, can create unnecessary cost or restrictive obligations.
How should an SME respond to Acas?
Treat the initial contact as an opportunity for a controlled, informed review. There is rarely any benefit in being defensive with the conciliator or giving an unprepared account of events. A proportionate approach is particularly important where the business has no internal HR department.
- Identify the issues. Ask what claims are being suggested, the relevant dates, the parties involved and the outcome sought. Do not assume a general complaint of unfair treatment equates to a legally viable claim.
- Preserve the documents. Secure the contract, policies, correspondence, investigation notes, payroll data and any relevant messages. Avoid changing records retrospectively.
- Check internal steps. Identify any grievance, disciplinary hearing or appeal, and whether the Acas Code of Practice was followed where it applies.
- Assess legal and commercial risk separately. Consider potential liability, management time, legal cost, reputational consequences, insurer notification requirements and business disruption.
- Set negotiating authority. Decide who can speak for the organisation and what terms require director or board approval.
- Keep discussions professional. Provide accurate information, avoid threatening the worker, and route proposals through the conciliator where appropriate.
An early legal risk assessment does not necessarily mean full representation. A short, focused review of the key papers can help an SME understand the claims, realistic outcomes and negotiation limits.
Example: an employee threatens an unfair dismissal claim
A 15-person business dismisses an employee after repeated attendance concerns. The employee says the company failed to consider an underlying disability and notifies Acas. The business has a basic absence policy but incomplete notes of earlier meetings.
Instead of offering a sum immediately, the director gathers the absence records, checks whether medical evidence or reasonable adjustments were considered and obtains advice on the potential disability discrimination claim. The parties then use early conciliation to discuss a settlement that reflects the legal and commercial risks.
The example is hypothetical. The amount worth offering would depend on the evidence, potential compensation, any defence and the terms needed to resolve the dispute.
What happens if you agree a COT3 settlement?
Where both parties agree terms, Acas can record them in a COT3 conciliation agreement. It is legally binding and can resolve the claims covered by its wording, normally preventing the claimant from pursuing those same matters at tribunal.
A COT3 is not simply a casual promise to pay. Acas warns that an agreement may become binding as soon as the parties agree its terms, even before signatures are added. This is why the wording and the authority of anyone negotiating on the employer’s behalf matter.
| Point to agree | Why employers should check it |
|---|---|
| Payment | Sum, gross/net treatment where relevant, instalments, date and payee |
| Claims covered | Whether the terms adequately settle the disputes being discussed |
| Reference or announcement | Exact agreed wording and who may use it |
| Confidentiality and non-disparagement | Whether appropriate terms are expressly included and legally workable |
| Future practical arrangements | Return of property, documents, handover and contact arrangements |
| Breach and enforcement | What happens if a deadline or other obligation is missed |
Not every agreement needs every item. Settlement should be tailored to the dispute. Confidentiality is not automatic merely because a COT3 is used; any restrictions should be drafted carefully and must not purport to suppress legally protected disclosures or reports.
Where a claim is already underway, Acas conciliation can continue during the tribunal process. If settlement fails before an ET1 claim is presented, the claimant may obtain the certificate needed to issue proceedings, subject to the relevant time limits.
Negotiate the terms, not just the figure
Our perspective
For a small business, it can be tempting to focus on the payment alone. Yet an uncertain reference clause, vague confidentiality wording or an unrealistic deadline can produce another disagreement after the original dispute seems resolved.
Before authorising a COT3, check the exact claims being settled and whether the business can actually comply with every obligation. A carefully defined agreement is often more valuable than a slightly lower headline figure.
When should an SME involve a solicitor?
There is no rule requiring every employer to instruct a solicitor during early conciliation. Straightforward disagreements may be manageable internally, particularly where the facts are agreed and the sums involved are modest. But some warning signs warrant legal advice before any offer is made.
- Discrimination, harassment or whistleblowing. These can carry complex liability and compensation risks, including claims that do not depend on the usual unfair dismissal qualifying service.
- An unclear dismissal process. Missing investigations, inconsistent treatment or disputed notice and termination dates can change the risk analysis.
- Senior employees or business-sensitive issues. Restrictive covenants, confidential information, reputational exposure and complex contractual terms require care.
- A significant or unusual COT3. Proposed non-financial restrictions, tax issues, instalments or multiple claims should be checked before agreement.
- Conciliation appears to be breaking down. A solicitor can advise whether to make a final offer, defend a claim or prepare an ET3 response.
- An ET1 has already arrived. The employer ordinarily has 28 days from the tribunal sending the claim to submit an ET3 response. See GOV.UK’s respondent guidance.
Legal advice is also useful when an employer wants to resolve a dispute promptly but is unsure whether the employee’s proposed claim has any legal foundation. The aim should be a proportionate decision, not automatically litigating or settling every complaint.
Example: when early legal advice changes the strategy
An SME receives a request for £18,000 relating to alleged unpaid commission and unfair dismissal. Its director believes only £2,000 is owed, but the commission clause is ambiguous and the employee has a long service record.
A solicitor reviews the contract, the calculations, the dismissal documents and the likely tribunal issues. The employer can then decide whether a negotiated payment is proportionate, what wording a COT3 needs and which parts of the claim it should defend.
An adviser cannot guarantee an outcome. The value of early involvement is that the employer negotiates with an informed view of the contractual and tribunal risks.
Acas early conciliation FAQs
Is Acas early conciliation compulsory for employers?
No. Although most prospective claimants must notify Acas before lodging an employment tribunal claim, participation in settlement discussions is voluntary for both sides. Declining to conciliate does not, by itself, establish liability.
Does early conciliation mean I have been taken to tribunal?
No. Early conciliation ordinarily happens before a tribunal claim. If settlement is not reached, the claimant may still choose whether to issue proceedings, subject to the relevant rules and time limits.
Can a company start early conciliation?
Yes. An employer can ask Acas to arrange talks where a workplace dispute may result in a tribunal claim. Unlike a timely notification from the prospective claimant, an employer’s request does not pause the worker’s limitation period.
Can a COT3 be binding before it is signed?
Yes. Acas explains that once terms have been agreed, they can be legally binding even if the document has not yet been signed. Get advice about the final wording and authority to settle before communicating unconditional agreement.
How Britton and Time can help
If your organisation has received an early conciliation approach, our employment solicitors for employers can assess the potential claims, review the relevant documents and advise on the most sensible response.
We assist SMEs with grievances and disciplinary procedures, COT3 settlement negotiations and employment tribunal defence. The extent of our involvement can be tailored to the seriousness and complexity of the dispute.
Contact Britton and Time to arrange an initial consultation about the circumstances facing your business.
We’re here to help.
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