Costco Wholesale UK Ltd v Nash: EAT upholds refusal to extend time after manager deliberately deleted tribunal emails

The Employment Appeal Tribunal has upheld a decision by Employment Judge S Knight refusing Costco Wholesale UK Limited an extension of time in which to submit its response to race discrimination and harassment complaints brought by a former employee, Jaiden Nash. The ruling, handed down by His Honour Judge James Tayler, confirms that a tribunal is not required to make a binary determination on the balance of prejudice and may instead weigh all relevant factors as components of an overall assessment.

Nash was employed by Costco at its Chingford warehouse as a Members Services Assistant from July to September 2022, when he was dismissed for failing his probation. He presented his claim on 27 December 2022. Costco's response was not submitted until 22 December 2023, some ten months out of time.

The Employment Tribunal found that four items of correspondence posted to the warehouse without a named recipient had been received and ignored, and that a further six emails copied to the warehouse's General Manager had been actively deleted by her. The Employment Tribunal concluded, without hesitation, that the emails were seen and deliberately deleted rather than having arrived in a spam folder. These findings were not challenged on appeal.

Employment Judge Knight refused the extension, finding that there was no good reason for the delay, that the claimant would suffer prejudice from further delay that an award of costs could not remedy, and that the defence was not sufficiently strong to countervail the seriousness of the default.

Costco appealed on three overlapping grounds, contending that the Employment Tribunal had erred in its assessment of the balance of prejudice, in its application of the merits test, and in the overall conclusion not to grant the extension.

HHJ Tayler rejected each ground. On the balance of prejudice, he confirmed that the tribunal was not required to decide which party would suffer greater prejudice and feed that binary outcome into its reasoning. To do so, he observed, would risk ignoring the prejudice suffered by the other party entirely. The tribunal was entitled to assess the prejudice to each side and treat both as components of its final determination.

On the merits, HHJ Tayler rejected the argument that the tribunal had wrongly imposed a threshold requiring a "knockout" defence. Applying the well-known guidance in Kwik Save Stores Ltd v Swain [1997] ICR 49, he noted that Mummery J's formulation that an arguable defence "will often" favour an extension does not create a binary threshold. A tribunal is entitled to consider the relative strength of a defence as part of the broader exercise. On a fair reading of the judgement, the tribunal had accepted the defence had some merit, but did not consider it sufficiently strong to offset the very serious default that had occurred.

HHJ Tayler also took the opportunity to offer useful clarification on the Kwik Save framework more generally. He observed that the three discretionary factors identified by Mummery J need not be considered in any fixed order, and that the framework should not be treated as a statute. Where one or more factors weighs heavily against granting an extension, countervailing factors must weigh correspondingly more strongly in the respondent's favour. The tribunal's time is itself a resource, and the knock-on effect of delay on other litigants is a legitimate consideration when applying the overriding objective.

The appeal was dismissed.

Paras Gorasia and Amritpal Bachu (instructed by Mills & Reeve) appeared for the Appellant. Anthony Johnston (instructed by Irwin Mitchell LLP) appeared for the Respondent.