United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR JAMES BODDY (of Counsel) Instructed by: Messrs Travers Smith LLP Solicitors 10 Snow Hill, EC1A 2AL
For the Respondent	MR ALEX GOUBATCHEV (The Respondent in Person)


 


SUMMARY

RACE DISCRIMINATION: Direct / Inferring discrimination

PRACTICE AND PROCEDURE: Appellate jurisdiction/reasons/Burns-Barke

Issues- what steps an Employment Tribunal should take before drawing inferences of racial discrimination and how it should regard explanations given by the employer for its action

Claim for discrimination on grounds of nationality and ethnic origin by Claimant against his erstwhile employers, the Respondent. It succeeded before the Employment Tribunal. The alleged discrimination related to the failure of the Respondent to appoint the Claimant to a post he applied for

The Respondent appealed.

Appeal allowed and remitted because the Employment Tribunal erred when it:-

1. Drew inference of racial discrimination from the respondent's failure to comply with a Code of Practice without considering whether there was another reason unconnected with the claimant's race or ethnic origin for its failure to comply with the Code. Alternatively no reason given for inference of racial discrimination from the respondent's failure to comply with a Code of Practice;

2. Inferred that there was a prima facie case of racial discrimination without explaining why it did not regard as decisive or of substantial significance that the successful candidate obtained higher scores than the claimant;

3. Assumed that an "inadequate or unsatisfactory " explanation for prima facie discriminatory conduct could entitle the Employment Tribunal to conclude that there was discrimination with out considering whether any explanation for the conduct which was not indicative of racial discrimination;

4. Concluded that there had been stereotyping of the claimant without considering the context in which the successful candidate referred to "nationalism" and "multicultural issues".


 


THE HONOURABLE MR JUSTICE SILBER

I Introduction

2. The issues raised on this appeal are first whether the Employment Tribunal in this case applied properly the principles applicable for a claim for unlawful direct discrimination on racial grounds under section 1(1)(a) of the Race Relations Act 1976 ("the RRA") and/or second whether it explained its reasons adequately.
3. By a decision dated 1 September 2008, the Employment Tribunal sitting in Brighton found that Teva (UK) Ltd ("the respondent") had unlawfully directly discriminated against its erstwhile employee Mr Alex Goubatchov ("the claimant") on racial grounds. The discrimination concerned a single act of less favourable treatment of the claimant by the respondent on account of its failure to promote the claimant to the position of Product Analysis Group Deputy Team Leader on or about 13 July 2007. The Employment Tribunal had accepted the claimant's allegation that the reason for his less favourable treatment by the respondent was his Russian nationality and/or his "mixed other" ethnic origin.
4. The Employment Tribunal also dismissed a complaint by the claimant against the respondent of indirect race discrimination and there has been no cross-appeal against this finding. We will refer to the parties by the roles they had in the Employment Tribunal.

II The Facts

5. The claimant commenced his employment with the respondent on 25 April 2005 as a Senior Analyst in the respondent's Quality Control Department based at the Eastbourne site. The claimant worked with the Product Analysis Group, which comprised of 15 Analysts each of whom was involved in the analysis of finished pharmaceutical products.
6. The respondent is the United Kingdom subsidiary of its Israeli-parent, which is a global pharmaceutical company. The respondent employs approximately 780 staff in the United Kingdom across three sites with about 190 staff being employed at Eastbourne.
7. In June 2007, the claimant applied for the position of European Product Testing Group Team Leader. On 26 June 2007, the claimant applied for the position of Product Analysis Group ("PAG) Deputy Team Leader. He was interviewed for both positions on 4 July 2007. On 13 July 2007, Mr. Neville Harris the Quality Control Manager of the respondent announced that Mr. Shaun Farley was the successful candidate for the PAG Deputy Team Leader Post. On 17 July 2007, Mr. Harris held an informal meeting with the claimant to give him feedback as to why his application had not been successful. On the following day, the claimant raised a formal grievance with Mr. Nicholas Thornton, the Head of Quality of the respondent, and on 23 July 2007 he met with the claimant to discuss his grievance.
8. On 25 July 2007, the claimant wrote to Mr. Carl Belk, who is the Operations and Supply Chain Director of the claimant, making a second grievance in which he alleged that the reason why he had not been successful in his application was because he was the victim of discrimination on the grounds of his race and his nationality. On 30 July 2007, Mr. Belk met with the claimant to discuss his grievance and he then spoke with others as part of his investigation into the grievance.
9. On 30 July 2007, Mr Thornton wrote to the claimant a short letter stating that he could find no evidence to suggest that the decision to appoint Mr Farley rather than the claimant was racially motivated. Mr Belk said in evidence that there were three non-English employees of the respondent in supervisory positions in the Eastbourne site and they were a Scot, a Pole and a Turk.
10. On 2 August 2007, Mr Belk wrote to the claimant a letter setting out his findings following his investigations into the claimant's grievance which were that he had concluded that the allegation of racial discrimination was unfounded. He informed the claimant that if he was dissatisfied with the decision, he could then appeal to Mr. John Beighton, the Managing Director of the respondent. The only criticism made by Mr Belk of the respondent's selection process and procedure as applied to the claimant related to the feedback given to the claimant by Mr Harris and Mr Thornton; this included comments relating to the role model in the post and the claimant's past tendency to break rules such as a failure to wear safety glasses, crossing safety barriers and making personal calls. Mr Belk stated in his letter to the claimant that both the phone call and the safety barrier issues had already been dealt with at the time and were therefore of no relevance in the selection process.
11. On 2 August 2007, one of the claimant's colleagues in the laboratory had organised a petition signed by twelve of the claimant's colleagues stating that they did not agree with the claim that the claimant was not a team player as the claimant was a key member of the team and highly approachable.
12. On 3 August 2007, Mr Harris sent an email informing his team that in order to accommodate Mr Farley's current LIMS activity and those of the deputy post, Mr Farley would thereafter only be working on deputy post activities during the morning and that he would be continuing on his LIMS activities in the afternoon. A new post of Lead Analyst would be filled by Mr Dav Yadav with Mr Farley only performing one half of the duties of the Deputy. That was the position which was still prevailing as at the time of the Employment Tribunal's hearing which took place 11 months after the interview.
13. On 5 August 2007, the claimant wrote to Mr John Beighton appealing against Mr Belk's decision regarding his grievance. The letter referred to the claimant being unfairly treated by the selection process and it referred to discrimination on the grounds of race and nationality. The letter also stated that the claimant had not been given any plausible explanation for his unsuccessful application. The letter also states that Mr Belk had asked the claimant whether he had ever been discriminated against before to which the claimant responded in the negative.
14. On 6 September 2007, the claimant met with Mr Beighton and Mrs. Lynda Wilebore, the respondent's Human Relations Director. At the meeting, the issues raised by the claimant in his grievance letters of 18 and 25 July 2007 and his appeal letter of 5 August 2007 were discussed. The notes of the meeting are brief but they recorded that the claimant was very hurt by Mr Thornton's comment that the claimant was not seen as a team player. After the meeting, Mr Beighton and Mrs Wilebore reviewed the selection documentation, although in her evidence Mrs Wilebore said that she had not seen the annual Performance Review documents. Mrs Wilebore was also unaware that the claimant had become ill following the receipt by him of the rejection of his grievance by Mr Belk.
15. On 21 September 2007, Mr Beighton wrote to the claimant confirming the claimant's grievance was not upheld and giving his reasons. The letter referred to the claimant being one of the top two candidates but it said first that Mr Farley had better relevant experience and skills than the claimant and second that the Deputy post required proven supervisory skills with Mr Farley having the better skills and wider experience in this area than the claimant. Mr Beighton however made no reference to the four years of supervisory experience which the claimant had whilst employed by another employer. Mr Beighton also stated that he had spoken with Mr Harris and Mr Thornton, who had confirmed that one of the reasons the claimant had not been successful was because he was not perceived as a team player.
16. In the competence scores in the interviews of the claimant and Mr Farley, there was no competency criterion of "Team player" or "Supervisory skills". In her evidence, Mrs Wilebore told the Employment Tribunal that the competency criterion that most matched "Team player" was "People skills and leadership" in respect to which the claimant had scored two marks and Mr Farley had scored three marks, which was a difference of one mark. In relation to supervisory skills, Mrs Wilebore's evidence was that the nearest criterion was "People skills and leadership" and "Knowledge and experience" in respect of which the claimant scored three marks and Mr Farley scored four marks, which was again a difference of one mark. Thus in relation to those two criteria, the overall difference in the marking of these two candidates was a score of two marks which was the same difference in the overall interview scores of the claimant and Mr Farley. Mr Farley however scored three more marks in the test scores, although Mr Harris and Mr Thornton had been told by Ms. Hazel Johnson that these test scores should not be read in isolation.
17. The claimant then brought his present application. He has acted in person before us and has presented his case in an impressive and courteous manner. The respondent has been represented by Mr. James Boddy, who has also assisted us with his able submissions.

III The Decision of the Employment Tribunal

18. In upholding the allegation of direct discrimination, the reasoning of the Employment Tribunal was that:-

(a) the claimant had satisfied the first stage of the burden of proof provisions under section 54A of the RRA by proving on the balance of probabilities facts from which the Tribunal could conclude in the absence of an adequate explanation that the respondent had on racial grounds treated the claimant less favourably than his comparator Mr Farley. In other words the claimant had raised a prima facie case of unlawful discrimination based on the facts that:-

(i) the respondents had failed to comply with paragraphs 4.61, 4.62, 4.17, 4.29, 4.33 and 3.27 of the Code of Practice on Racial Equality in Employment;

(ii) there was a lack of transparency especially by Mr Harris in his feedback to the claimant as to why he had not been successful in his application for the Deputy Post;

(iii) the feedback given by Mr Thornton when he informed the claimant that he was not a team player and did not have proven supervisory responsibilities was not directly related to the competencies against which the claimant and Mr. Farley scored in his application for the Deputy Post;

(iv) Mr Farley was only able to perform 50 per cent of the Deputy post because of his ongoing involvement in the LIMS project; and

(v) The respondent has admitted that the claimant was the second best candidate behind Mr Farley and it was a close run result;

(b) The respondent had failed to provide an adequate explanation sufficient to prove that it had not unlawfully discriminated against the claimant because of the following factors which are that:

(i) Mr Harris had not adequately explained why he did not inform the claimant that he did not think the claimant was a team player and Mr Thornton had not adequately explained why he did not pass this information on to Mr Belk;

(ii) Mr Harris did not have a valid reason for criticising or marking down the claimant in his scores because he was not a good team player or because he did not see the bigger picture;

(iii) The respondent did not have a valid reason for concluding that Mr Farley was the better candidate for the Deputy post as Mr Farley continued to work on the LIMS project after his appointment and could only fulfil approximately 50 per cent of his duties of the role;

(iv) The interview scoring was unreliable because the issues of team player and supervisory skills had no direct competency criterion in the scoring ;

(v) The question of "nationalities" and "multi cultural issues" was discussed in Mr Farley's interview but not in the claimant's interview to the Employment Tribunal; this, along with Mr Harris's comment that the claimant lacked appreciation of the bigger picture, reflected "either a conscious, or unconscious stereotyping by Mr Harris and Mr Thornton of the claimant on the ground of his nationality and ethnic origin" (paragraph 78 of the judgment).

IV The Issues

19. The respondent puts forward four main grounds of appeal against the judgment and they are that the Employment Tribunal:-

(1) misdirected itself and/or failed to give adequate reasons as to why it was entitled to draw an inference of unlawful discrimination as a consequence of the respondent's failure to comply with relevant provisions of the Code of Practice on Racial Equality in Employment ("the Code of Practice") ("The Code of Practice Inference Issue");

(2) erred in failing to apply the appropriate test as to the weight of evidence required in order to show a prima facie case of discrimination or failed to give adequate reasons for its conclusions on this issue ("The Prima Facie Discrimination Issue");

(3) misdirected itself as to what constitutes an adequate explanation sufficient to prove that the respondent did not commit an act of discrimination or failed to give any or any adequate reasons for rejecting the respondent's explanations for its treatment of the claimant (" The justification issue"); and

(4) erred in that there was no evidence to support its finding (at paragraph 78 of the judgment) that there was conscious or unconscious stereotyping of the claimant by Mr Harris and Mr Thornton ("The stereotyping issue").

20. The respondent also sought to contend that aspects of the decision of the Employment Tribunal were perverse but we are unable to understand how the respondent could succeed on this point if it was unsuccessful on the other issues set out in paragraph 18, especially as the respondent is successful on these issues for the reasons which we will now set out. So in those circumstances we will not deal with that issue or the further ground of appeal of the respondent, which was that the Employment Tribunal acted in breach of natural justice in failing to give the respondent an opportunity to comment on the significance of the omission of reference to "nationalities" and "multicultural issues" in the claimant's interview.

V Issue (1) The Code of Practice Inference Issue

21. The basis of this complaint of the respondent is that the Employment Tribunal either misdirected itself as to the circumstances in which it could draw inferences of unlawful discrimination from the respondent's failure to follow the Code of Practice or alternatively it failed to give reasons explaining why it was entitled to draw such inferences. These grounds are alternative and according to the respondent they arise because it is not possible to ascertain why or how the Employment Tribunal drew the inferences of unlawful discrimination from the respondent's failure to follow the Code.
22. The basis of this submission is that in paragraph 61 of its reasons the Employment Tribunal explained that it had to decide whether it "may draw inferences from any failure to comply with the Code". It then sets out the relevant provisions in the Code and it then explains that the respondent was in breach of them. The Employment Tribunal then immediately proceeds to say in the following paragraph "in addition to the respondent's failure to comply with the Code of Practice there are further factors that show the claimant has discharged the burden of proof at the first stage of either test". We stress the use of the words "in addition".
23. Mr James Boddy, Counsel for the respondent, submits that the use of those words "in addition" shows that the Employment Tribunal has inferred unlawful discrimination from failure to follow a Code of Practice without giving any reasons for so doing. He submits that there are various steps that the Employment Tribunal should have taken (but did not take) before drawing these inferences.
24. Our starting point is that it has long been recognised that proving discrimination claims may pose great difficulties for claimants because it is unusual to find direct evidence of discrimination. Indeed few employers would be prepared to admit such discrimination perhaps even to themselves. Therefore in some cases the discrimination would not have been intentional but merely instead it has to be based on the assumption that the particular person would not have fitted in.
25. Guidance on how an Employment Tribunal should decide whether or not it was entitled to draw inferences in discrimination cases was given in respect of sex discrimination allegations in Barton v Investec Securities Ltd [2003] IRLR 332 and those guidelines, which have become known as "the Barton guidelines", have subsequently been revised and have been applied to race and disability discrimination cases (see for example Igen Ltd v Wong [2005] IRLR 258 [15].
26. In that case, Peter Gibson LJ delivering the judgment of the Court of Appeal gave guidance in three appeals which concerned the application of statutory provisions in cases of sex, race and disability discrimination. The guidance which he gave, insofar as is relevant to this appeal, concerns the important issue of whether the claimant has proved on the balance of probabilities facts from which the Tribunal can infer from proven breaches of codes of practice and in the absence of adequate explanation that the respondent has committed an act of discrimination. He explained (with our emphasis added) at pages 279 to 280 that:

"(4) In deciding whether the claimant has proved such facts, it is important to remember that the outcome at this stage of the analysis by the Tribunal will therefore usually depend on what inference is proper to draw from the primary facts found by the Tribunal. …

(8) Likewise, the Tribunal must decide whether any provision of any relevant Code of Practice is relevant and if so, take into account in determining, such facts... This means that inferences may also be drawn from any failure to comply with the relevant Code of Practice."

27. The effect of those guidelines is that an Employment Tribunal must embark on a careful analysis starting with making findings on the relevant facts and then proceeding to consider what inferences (if any) can be drawn from them but it must always bear in mind that:

"The function of the tribunal is to find the primary facts from which they will be asked to draw inferences and then for the tribunal to look at the totality of the facts (including the respondent's explanations) in order to see whether it is legitimate to infer that the acts or decisions complained of in the originating application were on "racial" grounds.... The process of inference is itself a matter of applying common sense and judgment to the facts, and assessing the probabilities on the issue whether racial grounds were an effective cause of the acts complained of or were not." per Mummery J (as he then was) in Qureshi v The University of Manchester [2001] ICR 863, 875 and cited with apparent approval by Sedley LJ in Anya v University of Oxford [2001] ICR 847 [9].

28. There may, of course, be circumstances in which it is permissible to draw an inference of unlawful discrimination from a failure to comply with the relevant Code of Practice as was accepted in Igen in the passage set out in paragraph 25 above. This Appeal Tribunal has given helpful guidance about the circumstances in which it may be done because in D'Silva v NAFHE [2008] IRLR 412 Underhill J explained that "38…inferences can be drawn, that is only in 'appropriate cases', and the drawing of inferences from such failures – as indeed from anything else - is not a tick box exercise". The Employment Tribunal must not forget that there might be many reasons for a failure to comply with a Code of Practice and many of those reasons although unjustified may preclude an inference being drawn that the failure was for a prohibited discriminatory ground. We stress how important it is for the Employment Tribunal to focus on the "whole picture", which include looking at the respondent's explanation for those breaches of the code before drawing any inferences that a prima facie case of discrimination has been shown. It may well be the reason for the breach of the code of practice might be a genuinely held incorrect interpretation of the code and that would in many circumstances preclude an inference that there was racial discrimination.
29. The importance of carrying out such an exercise was demonstrated when Underhill J returned to this issue in Commissioner of the Police of the Metropolis v Virdi [2008] UKEAT/0598/07, BAILII: ([2008] UKEAT 0598_07_0407, when he said that:

"45. ...an inference is a factual finding albeit one based on indirect evidence… Inferences are not drawn as a sanction for bad behaviour".

30. The case for the respondent is that it does not follow automatically that a breach of the Code of Practice enables an inference to be drawn because the Employment Tribunal is obliged to give reasons explaining why that inference is permissible and appropriate. As we have explained in this case, the Employment Tribunal appeared to infer from the failure to comply with the Code of Practice that this was a factor which showed that the claimant has discharged the burden of proof. The claimant contends that there was adequate material to justify drawing the inferences which the Employment Tribunal did.
31. We are unable to agree with the claimant as nothing was stated by the Employment Tribunal in its reasons explaining how it reached the conclusion that the respondent's reasons for failing to comply with the Code of Practice or other reasons were connected with racial matters. Indeed, even if the Employment Tribunal had reasons for reaching those conclusions it was at fault by failing to give reasons for drawing those inferences of unlawful discrimination from a failure to follow the Code of Practice.
32. The obligation for an Employment Tribunal to give reasons for its decision is set out in Rule 30(6) of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 which states that:

"Written reasons for a judgment shall include the following information... (e) how the relevant findings of fact and applicable law have been applied in order to determine the issues".

33. As is well known at common law, there is a clear duty to provide reasons because as was explained famously by Lord Phillips MR in English v Emery Reinbold & Strick Limited [2003] IRLR 710 "[19]... the issues the resolution of which were vital to the Judge's conclusion should be identified and the manner in which he resolved them explained". In our view, there is an additional powerful reason as to why reasons have to be given in discrimination cases and that is the fact that inferences are, as we have explained, so important and indeed very frequently crucial to the decision-making process in discrimination cases. Indeed, the reason for drawing inferences almost invariably requires greater explanation from an Employment Tribunal than when it relies on direct evidence, which is by its nature usually self-explanatory. That means that there is a stronger case than in many other areas for the decision makers in discrimination cases to explain fully and carefully the basis on which inferences have been drawn. As was explained by Elias J in Bahl v Law Society [2003] IRLR 640:

"118. However in discrimination cases, where the inferences from primary facts play such an important role, it is necessary for the Tribunal to set out the principal findings of primary fact and also the basis on which it has made any inference from those facts. In addition, the Tribunal should consider all relevant issues which may cast light on the decision of whether or not discrimination has occurred."

34. Similarly, Pill LJ giving the judgment of the Court of Appeal in Governors of Warwick Park School v Hazlehurst [2001] EWCA Civ 2056 explained that:

"24 ...In a situation in which it is expressly found that there was no deliberate or conscious racial discrimination, it is necessary, before drawing the inferences sought to be drawn, to set out the facts relied on and the process by which the inference is drawn. In some cases that process of reasoning need only be brief; in other case more detailed reasoning will be required".

35. Although there is an obligation for an Employment Tribunal to give reasons, there is ample authority that it need not be what Bingham LJ described as "an elaborate product of refined legal draftsmanship" (Meek v City of Birmingham District Council [1987] IRLR 250). In the present case, the claimant contends that the Employment Tribunal complied with this obligation but we were unable to discover the process or basis of the Employment Tribunal's reasoning which led to it drawing these inferences. In other words we have been unable to understand from the Employment Tribunal's conclusions on the breaches of the Code "how it got from its findings of fact to its conclusions" (per Sedley LJ in Tran v Greenwich Vietnam Community [2002] IRLR 735). We are therefore driven to the clear conclusion that the Employment Tribunal erred either because it failed to consider properly whether and how what inferences relating to racial discrimination could be drawn from the respondent's failure to comply with the Code of Practice or (if it did consider these matters properly) it then failed to give any or any adequate reasons for its decision that the respondent's failure to comply with the Code of Practice was a matter from which the Employment Tribunal could infer that the respondents had committed an act of discrimination without considering whether there was another reason unconnected with the claimant's race or ethnic origin for its failure to comply with the Code. On the latter matter, it is clear that if a judgment is silent on this point, the respondent cannot understand why or how the inferences were drawn and therefore it cannot challenge them. Notwithstanding the claimant's submissions to the contrary, we agree with Mr Boddy that either of these failures by the Employment Tribunal amounted to an error of law with the result that its decision cannot be allowed to stand.

VI Issue (2) The Prima Facie Discrimination Issue

36. The basis of this ground of appeal is that the Employment Tribunal either failed to apply the proper test as to the weight of evidence required for the claimant to show a prima facie case of discrimination or failed to give reasons as to why it was so satisfied. As we will explain, the Employment Tribunal has the obligation to take into account factors in the respondent's favour and then really look at the entire picture. In other words, the Employment Tribunal has to balance the factors indicating a prima facie case of discrimination and then those which could undermine that conclusion before reaching a conclusion as to whether a prima facie case of discrimination has been established. The respondent contends that the Employment Tribunal failed to comply with either or both of these obligations but the claimant submits to the contrary that the Employment Tribunal complied with its obligations.
37. To understand the submissions on this point, it is necessary to bear in mind that in Madarassy v Numera International PLC [2007] IRLR 246, the Court of Appeal explained that the burden of proof did not shift to the employer simply if the claimant established a difference in status and difference in treatment. In that case, a fundamental issue related to the interpretation of wording which is common to the Sex Discrimination Act and the RRA (section 54A(2)) in relation to the burden of proof. It provides (with our emphasis added) that in discrimination cases :

"Where, on the hearing of the complaint, the complainant proves facts from which the tribunal could, apart from this section, conclude in the absence of an adequate explanation that the respondent –

(a) has committed such an act of discrimination… against the complainant which is unlawful… the Tribunal should uphold the complaint unless the respondent proves that he does not commit or, as the case may be, is not to be treated as having committed, that act."

38. In the Madarassy case, the Court of Appeal's attention was focussed on the words which we have underlined ("could conclude") in the opening words of section 63A(2) and which apply equally to the RRA in section 54A(2). Mummery LJ stated (with our emphasis added) that:

"56 …The bare facts of a difference in status and a difference in treatment only indicate a possibility of discrimination. They are not, without more, sufficient material from which a Tribunal "could conclude" that, on the balance of probabilities, the respondent had committed an unlawful act of discrimination."

57 "Could conclude" in S63A(2) must mean that "a reasonable Tribunal could properly conclude" from all the evidence before it. This would include evidence adduced by the complainant in support of the allegations of sex discrimination, such as evidence of a difference in status, a difference in treatment and the reasons for the different treatment. It would also include evidence adduced by the respondent contesting the complaint."

39. The factors relied on by the Employment Tribunal are showing that why it could properly conclude discrimination are those set out in paragraphs 17 (a) above. The case for the respondent is that these factors either individually or cumulatively would not have enabled a reasonable Tribunal to be in a position where it "could properly conclude from all the evidence before it" discrimination because it failed to take into account evidence adduced by the defendant which Mummery LJ said that it ought to. That evidence was that Mr Farley had scored more highly than the claimant both in the objective testing and at interview and second that five British nationals were unsuccessful in their applications for the PAG Deputy Team Leader in addition to the claimant.
40. The Employment Tribunal dealt with the matter in this way:

"59. On behalf of the respondent it was submitted that the Claimant has not discharged the burden of proof at the first stage of either test under the "old law" guidelines in the King case or under the "new law" under Section 54A of the RRA, which does not apply to cases of direct discrimination on the grounds of nationality or colour. It was submitted that the Claimant had advanced no specific evidence pointing towards the reason for the differential treatment he received and the closest he came to this was that there were few other non-British nationals working in his department. It was submitted that Mr Dav Yadav, although a British national, was of African background and Cindy Lam was from a Chinese background. It was submitted that this case should be distinguished from the Griffiths-Henry case because, in that case, the employee was equally, or better, qualified than her comparator whilst here the claimant scored less than Mr Farley. Moreover, a number of British nationals also applied for the Deputy post but were unsuccessful.

60. We reject that submission on behalf of the Respondent because there are other factors in this case, that, in our judgement, we consider are sufficient for the claimant to discharge the burden of proof at the first stage of either test. Moreover, in the Griffiths-Henry case paragraph18, the President could see no justification for requiring positive evidence of discrimination at the first stage, provided Tribunals adopt a realistic and fair analysis of the employer's explanation at the second stage."

41. We doubt whether the Employment Tribunal had approached the matter correctly as it appeared not to have explained why the difference in scores for the claimant and Mr. Farley on the tests an the interviews and the test scores to which we referred in paragraph 15 above was not regarded as decisive against a finding of racial discrimination or at least of substantial significance. It is the absence of reasons showing how the Employment Tribunal had considered these factors when considered with its failure to give reasons on the code of practice inference issue, the justification issue and the stereotyping issue, which satisfies us that there was an error made by the Employment Tribunal, which requires this matter to be remitted.

VII Issue (3) The Justification Issue

42. This issue arises at the second stage if and when the claimant has satisfied the first stage by proving on a balance of probabilities facts from which the Employment Tribunal could conclude in the absence of an adequate explanation that the respondent had on racial grounds treated the claimant less favourably than his comparator who was Mr. Farley. In other words, the first stage requires the claimant to show a prima facie case of unlawful racial discrimination.
43. At the second stage, the employer does not need to justify the treatment of the complainant or establish that he acted reasonably or fairly because all he needs to do is to show that the true reason for the less favourable treatment was not discriminatory for racial reasons (see, for example, Khan and Another v Home Office [2008] EWCA Civ 578 [26]). Indeed the Employment Tribunal should not at this stage of the inquiry be considering whether the employer acted unfairly or in breach of its policies because the sole focus of the Employment Tribunal must be solely on the question of whether the true reason for the less favourable treatment was discriminatory.
44. The point was made particularly clearly by Elias J in Bahl v Law Society [2003] IRLR 614 [97] where he said in a passage (which was approved by the Court of Appeal in [2004] IRLR 799 [101]) that "employers will often have unjustified albeit genuine reasons for acting as they have. If these are accepted and show no discrimination, there is generally no basis for the inference of unlawful discrimination to be made".
45. The approach of the Employment Tribunal was correct when it stated that "[70] unfairness in itself is not sufficient to establish discrimination on grounds of race". The criticism of the respondent is that the Employment Tribunal went on to explain (with our emphasis added) that it was required "to seek an explanation from [the respondent] for the disparity and treatment and, if that explanation is inadequate or unsatisfactory, we are entitled but not obliged to draw an inference of less favourable treatment on the prohibited ground".
46. We agree with the respondent's submission that the Employment Tribunal erred because it appeared to work on the assumption that an "inadequate or unsatisfactory" explanation for disparity meant that there was or might be a presumption of racial discrimination. This meant that the Employment Tribunal could conclude that there was a case of unlawful racial discrimination merely because its true explanation for such alleged discriminatory conduct was unsatisfactory or inadequate even though such true explanation was not in any way racially discriminatory. In our view this shows that the Employment Tribunal erred in its approach.
47. There is a second reason why we cannot agree with the approach of the Employment Tribunal at the second stage, which is now under consideration, the Tribunals are obliged to adopt "a realistic and fair analysis of the employer's explanation" (per Elias P in Network Rail Infrastructure Limited v Griffiths/Henry [2006] IRLR 865 [18]). This means that the Employment Tribunal has to look at the whole picture in the sense of considering all the evidence relevant to appraising the respondent's explanation.
48. Mr Boddy points out that although the Employment Tribunal referred to this principle at paragraph 60 of its reasons, it failed to apply it because it failed to take into account the fact first that Mr Farley had obtained higher scores than the claimant both in objective testing and at interview and second that five British nationals were like the claimant unsuccessful. We regard the second factor as not being of any significance while the first factor was a very important and cogent factor which the Employment Tribunal erred in disregarding.
49. We have come to the conclusion that the Employment Tribunal erred on this point. But even if we are wrong on that we consider that the Employment Tribunal failed to give any adequate reasons for rejecting the matters or its failure to take account of the higher scoring given to Mr Farley as compared with the claimant. In reaching this conclusion, we have not overlooked the contrary submission of the claimant. In his submissions, he also relied on some evidence which he contended showed that Mr. Farley had been or might have been demoted at some stage but this evidence was not before the Employment Tribunal and no application had been made to rely on it. Indeed if such an application had been made, it is unlikely that it would have altered the result as it was not relied on by the Employment Tribunal.

VIII Issue D The Stereotyping Issue

50. Mr. Boddy submits that there was no evidence to support the Employment Tribunal's finding that there was conscious or unconscious stereotyping of the claimant by Mr Harris and Mr Thornton. In paragraph 78 of its reasons, the Employment Tribunal stated:

"The Respondent failed to comply with its own Hiring, Promotion and Termination policy under paragraph 2.7 because no second interview was conducted and there was a selection process for more than one candidate. The Respondent also failed to adequately train Mr Harris and Mr Thornton with Equal Opportunities training and this is particularly relevant to paragraph 4.29 of the Code which refers to training and interviewing techniques to include training to enable staff involved in the selection process to recognise when they are making stereotyped assumptions about people and applying scoring methods objectively. In Mr Harris' manuscript notes of interview, he uses the expression of the Claimant that he is "Not typically a team player…". In the manuscript notes of Mr Thornton's and Mr Harris' interview with Mr Farley the question of "Nationalities" and "Multicultural issues" were discussed, but there was no such similar discussion in the interview with the Claimant. In Mr Harris' summary document setting out the scores he also uses the expression that the Claimant "Lacks appreciation of bigger picture". We find that these comments, and the omission of the discussion relating to nationalities and multicultural issues in the interview with the Claimant, reflect either a conscious, or unconscious, stereotyping by Mr Harris and Mr Thornton of the Claimant on the ground of his nationality and ethnic origin"

51. The case for the respondent is that the Employment Tribunal in those comments failed to comply with the specific guidance given by the Court of Appeal in Bahl v Law Society (supra) on the issue of making a finding of unconscious discrimination when it stated that:-

"104. … in an area where the drawing of inferences is central, it is essential that the Employment Tribunal sets out with the utmost clarity the primary facts from which an inference of discrimination is drawn… It is particularly important that the Employment Tribunal takes care to explain how it made a finding of unconscious discrimination."

52. Mr Boddy contends that the Employment Tribunal failed to comply with those requirements because first there was no evidence to support this finding that there was unconscious or conscious stereotyping of the claimant by Mr Harris or by Mr Thornton and second that the Employment Tribunal failed to explain how it reached its conclusion. The claimant disputes that the Employment Tribunal erred on this matter.
53. It appears that the Employment Tribunal sought to rely on the fact that "nationalities" and "multicultural issues" were discussed at the interview of Mr Farley but not that of the claimant. In our view, this reasoning is flawed because it ignores the context of the conversation with Mr Farley which was that at the time of the interview he had been performing an important role in a European context. It also appears from the handwritten notes of the interview taken by Mr Harris and by Mr Thornton that the reference to multiculturalism was first made by Mr Farley in response to a question asking him how his experience on the LIMS project had benefited him.
54. We must stress how important it is for an Employment Tribunal to consider the context in which matters arose in an interview which might show unfair discrimination. There is a world of difference between on the one hand the case where the selecting party raises an issue of this sort and on the other hand the case where it is merely raised in passing by the interviewee. What is important is that Mr Harris and Mr Thornton did not specifically raise themselves the issues of "nationalities" and "multi cultural issues". In our view, there is a missing link in the reasoning of the Employment Tribunal because neither Mr Harris nor Mr Thornton made a conscious decision to bring up the issues of "nationalities" and "multicultural issues" with Mr Farley but not with the claimant. The Employment Tribunal should have considered and explained how the unsolicited references by Mr. Farley to "nationalities" and "multi cultural issues" assisted them in deciding if there was racial discrimination against the claimant. In addition, the Employment Tribunal should have appreciated this point and explained its reasoning but unfortunately, it did not do so especially as it is difficult to infer from the questioning that there was any discrimination in favour of Mr Farley or against the claimant on the basis of the issues of "nationalities" and "multi cultural issues".

IX Disposal

55. For the reasons which we have set out the decision of the Employment Tribunal was flawed. Mr Boddy submits that in those circumstances we should actually overturn the decision of the Employment Tribunal and hold that there had been no discrimination on racial or nationality grounds against the claimant. The circumstances in which we can do that are very limited because the Employment Tribunal and not this Appeal Tribunal is the designated fact-finder. Indeed as was explained by Lord Donaldson MR in O'Kelly v Trust House Forte [1983] 3 All ER 605, 634 B:

"The appeal tribunal can correct errors of law and substitute its own decision in so far as the [employment] tribunal must, but for the error of law, have reached such a decision. But if it is an open question how the [Employment] tribunal would have decided the matter if it had directed itself correctly, the appeal tribunal can only remit the case for further consideration..."

56. The limited power of the Appeal Tribunal to reverse a decision of the Employment Tribunal and not to remit was recently explained in Wilson v Post Office [2000] IRLR 834, by Buxton LJ, who reminded us that:

"36 ... the [Employment] Tribunal is not merely a fact-finding body, it is an industrial jury that is not merely a phrase but a concept which has to be taken seriously. It is only going to be in an extreme case one that is very clear, that it is going to be possible for an appellate body properly to say that a jury would have inevitably reached the conclusion that the EAT reached, when in the original case, albeit preceding on an incorrect basis, the [Employment] Tribunal had come to a contrary conclusion".

57. In our view, the present case is not what Buxton LJ described as "an extreme case" because there was material which could have led the Employment Tribunal to reach the conclusion which it did. It must not be forgotten that our major (but not sole) criticism of the Employment Tribunal is that it failed to give proper reasons for drawing inferences and reaching some of its conclusions. It might well be that it could have reached precisely the same conclusions if it had set out its reasons correctly. For those reasons we do not think that it would be appropriate for us to substitute our own decision and so this case has to be remitted to an Employment Tribunal
58. When we raised the matter with the parties at the hearing of whether we should remit this case to the same or a different Employment Tribunal if we were to allow the appeal, the claimant contended that it should go back to the same Employment Tribunal while Mr Boddy said it should go to a different Employment Tribunal. In our view there are three reasons which individually and cumulatively lead us to the conclusion that this case should be remitted to a different Employment Tribunal.
59. First, the Employment Tribunal heard the evidence in this case at the start of June 2008 and it is unlikely that the same Tribunal could reconvene before the first anniversary of that decision. In those circumstances, by then this Employment Tribunal is likely to have a very limited recollection of the detailed facts of this case especially as its members are likely to have heard many cases since them
60. Second, it is in our view very important and only fair to the claimant that this case should be heard as speedily as possible by the Employment Tribunal especially as it relates to matters which arose almost two years ago. We know from experience that it is always much quicker to get a case heard by a differently constituted Tribunal than to wait for an occasion when it is convenient for a hearing by the same members who heard the original claim.
61. Third, we are troubled by the fact that although the Employment Tribunal spent time on this case, there is what Burton P said in Sinclair Roche & Temperley v Heard [2004] IRLR 763 was "a very real risk of an appearance of pre-judgment or bias" if an Employment Tribunal is really being asked to have "a second bite at the cherry" as "there must be a very real and very human desire to attempt to reach the same result if only on the basis of the natural wish to say 'I told you so'" .
62. For all those reasons we have come to the conclusion that this case has to be remitted to a different Employment Tribunal but we should stress that we have no idea what decision will be arrived at by the Employment Tribunal, which hears this case.