Why Submitting Your ET3 on Time Matters: Lessons from Costco Wholesale UK Ltd v Nash

Receiving an ET1 is never welcome news but how a business responds in the days and weeks that follow can matter just as much as the merits of the claim itself. A recent Employment Appeal Tribunal decision, Costco Wholesale UK Ltd v Nash [2026] EAT 85, is a stark reminder of just how seriously tribunals take the deadline for filing a response, and how badly things can go wrong when internal processes for handling tribunal correspondence break down.

What Happened in Costco v Nash

Jaiden Nash was employed by Costco at its Chingford warehouse for around two months in 2022 before being dismissed during his probationary period. He brought claims of direct race discrimination and harassment and his ET1 was presented to the tribunal on 27 December 2022.

Costco did not submit its ET3 response until 22 December 2023, almost ten months after the 28-day deadline had expired. When it applied for an extension of time, Costco argued it had been unaware of the claim until shortly before filing, when correspondence about a preliminary hearing reached its head office.

The tribunal didn't accept that explanation. It found that several items of correspondence about the claim had in fact been received at the warehouse, including documents received by the General Manager and that the correspondence had been received and ignored. It also found that the General Manager had actively deleted relevant emails. On that basis, the tribunal concluded Costco's explanation for the delay was untrue and refused to extend time. Without an extension, Costco was unable to defend the claim.

Why the EAT Upheld the Refusal to Extend Time

Costco appealed on three grounds, arguing the tribunal had got the balance of prejudice wrong, misapplied the merits test and reached the wrong overall conclusion. The EAT, in a judgment given by HHJ Tayler, rejected all three arguments.

On prejudice, the EAT confirmed that a tribunal isn't required to make a binary finding as to which side would suffer greater harm and treat that as decisive. Prejudice to each party is simply one factor weighed as part of an overall evaluative exercise, alongside the explanation for the delay and the merits of the proposed defence and no single factor operates as a threshold test.

Crucially, the EAT confirmed the tribunal was entitled to find no satisfactory explanation for a ten month delay, particularly once it had found that explanation to be untrue. A dishonest or unsustainable account of what went wrong will actively work against an employer's application, not just fail to help it.

What This Means for Employers

A missed ET3 deadline can end your ability to defend a claim. If a tribunal refuses to extend time, the employer generally cannot contest liability at all, a severe consequence, not a mere procedural inconvenience.

Honesty matters more than a clean narrative. Costco's case wasn't lost simply because the response was late. It was lost because the tribunal found the explanation for the lateness to be false. Employers facing a missed deadline are far better served by acknowledging what went wrong, even if it reflects poorly on internal processes, than by constructing an account that doesn't hold up to scrutiny.

Correspondence sent to any part of the business can count. Costco's difficulties stemmed largely from tribunal correspondence being received at a local site and not escalated properly. Businesses with multiple sites, branches or warehouses need robust systems to ensure tribunal correspondence is identified and passed to the right people immediately, regardless of where it lands.

Act Early: Take Advice as Soon as a claim Arrives

The clearest lesson from this case is one of timing. The 28-day window to submit an ET3 moves quickly and by the time a business realises there's a problem, options can already be narrowing. Taking legal advice as soon as an ET1 is received gives a business the best chance of responding properly, understanding the claim and avoiding the kind of situation Costco found itself in.

If a deadline has already been missed, advice is just as important and just as urgent. An application to extend time needs to be made promptly, supported by a genuine and evidenced explanation.

Frequently Asked Questions

How long do I have to submit an ET3 response? An employer has 28 days from the date the tribunal sends the ET1 claim form to submit its ET3 response.

What happens if an employer misses the ET3 deadline? The employer must apply for an extension of time. If the tribunal refuses the extension, the employer generally cannot defend the claim on its merits, meaning liability may be determined without them being heard.

What factors does a tribunal consider when deciding whether to extend time for an ET3? Relevant factors include the explanation for the delay, the prejudice to each party and the apparent merits of the proposed defence. Following Costco Wholesale UK Ltd v Nash, these are treated as part of one overall evaluative exercise rather than a strict sequential test.

IMPACT

Costco v Nash is a cautionary tale about what happens when tribunal correspondence gets lost in an organisation and when an employer's explanation for a delay doesn't stand up. Businesses that receive an ET1 should treat the 28 day ET3 deadline as non-negotiable, put clear escalation processes in place for any tribunal correspondence and seek advice immediately rather than waiting to see how things unfold.

If you receive an Employment Tribunal Claim then contact Oliver Tasker today:

📞 Call: 01522 776270 ✉️ Email: oliver@impactemploymentlaw.co.uk

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