EAT upholds refusal to allow employer to defend claim after 10-month delay

Background

In Costco Wholesale UK Ltd v Nash, the claimant brought claims of race discrimination and harassment following the termination of his employment during probation. The tribunal claim was presented in December 2022.

Costco did not submit a response until December 2023, approximately 10 months out of time, and applied for an extension. It argued that it had been unaware of the proceedings until shortly before the response was filed when it received a record of a preliminary hearing.

The employment tribunal rejected that explanation. It found that multiple tribunal documents had been sent to the claimant's previous workplace and that several emails relating to the proceedings had been received by the warehouse's General Manager. The tribunal concluded that the correspondence had been received and ignored, and that the General Manager had actively deleted relevant emails. It refused the application for an extension of time.

EAT decision

The EAT dismissed Costco's appeal.

The EAT reviewed the well-established principles governing applications to extend time for presenting a response. The relevant considerations include the explanation for the delay, the prejudice to each party, and the apparent merits of the proposed defence. In reviewing these factors, the EAT confirmed that they are all a component of an overall evaluative exercise and no one factor acts as a threshold test.

The tribunal had been entitled to conclude that there was no satisfactory explanation for the delay. The response was submitted around 10 months late, and the tribunal had found that the employer's explanation was untrue.

The EAT also rejected arguments that the tribunal had failed properly to assess prejudice or the merits of the defence. The tribunal had recognised that the respondent would suffer significant prejudice if unable to defend discrimination allegations but was also entitled to consider the prejudice caused to the claimant by the substantial delay and the wider impact on the administration of justice.

Although the proposed defence was not hopeless, the tribunal was entitled to conclude that it was not sufficiently strong to outweigh the seriousness of the employer's default.

Taking all factors into account, the refusal to grant an extension of time was a permissible exercise of the tribunal's discretion.

Learning points

This decision highlights the importance of having robust procedures for identifying and escalating tribunal correspondence. Employers should ensure that both postal and electronic communications relating to legal proceedings are promptly forwarded to the appropriate internal contacts.

The case also demonstrates that tribunals will take a dim view of significant procedural failures, particularly where correspondence has been ignored or there is no credible explanation for the delay. While tribunals will usually wish to determine claims on their merits, employers should not assume that an extension of time will be granted simply because they have an arguable defence. Where delays are lengthy and unexplained, the consequences can be severe, including being prevented from defending the claim altogether.

For more information or advice, please get in touch with Sofia Efstathiou in our Employment team.