A2/05/0746 
Neutral Citation Number: [2005] EWCA Civ 991
IN THE SUPREME COURT OF JUDICATURE 
IN THE COURT OF APPEAL (CIVIL DIVISION) 
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL 
Royal Courts of Justice 
Strand 
London, WC2 

Date: Thursday, 14th July 2005
 
B E F O R E:

LORD JUSTICE WALLER
 
LORD JUSTICE LAWS 

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DRESDNER KLEINWORT WASSERSTEIN LIMITED
Applicants 
-v-
 
ABI ADEBAYO 
Respondent 
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(Computer-Aided Transcript of the Palantype Notes of
Smith Bernal Wordwave Limited
190 Fleet Street, London EC4A 2AG
Tel No:  020 7404 1400  Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
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MR T LINDEN (instructed by (Messrs McDermott Will & Emery UK LLP, London, EC2) appeared on behalf of the Appellant
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Judgment

1.	LORD JUSTICE LAWS: This is a renewed application for permission to appeal against the decision of the Employment Appeal Tribunal ("the EAT") given on 22nd March 2005, by which it dismissed the applicants' appeal against the determination of the London Central Employment Tribunal promulgated on 19th May 2004.  The ET had upheld the complaints of the potential respondent, Mr Adebayo, of direct race discrimination, unfair dismissal and wrongful dismissal in breach of contract.  Sedley LJ refused permission to appeal to this court on consideration of the papers on 7th June 2005.   There is no application in relation to the finding of wrongful dismissal in breach of contract.  
2.	The ET made extremely detailed findings of primary fact, none of which, as I understand it, is as such sought to be challenged.  For the purposes of this application I may replicate the useful bird's eye view given by the EAT:
"4. The Applicant, Abi Adebayo, is of black African origin.  After graduating in 1994 he worked as an interest rates derivatives trader in a Japanese bank and was regarded as a high achiever.   He rose to the rank of Assistant Vice-President in 1998 and then worked in New York trading interest rate options.   He joined the Appellants in July 2000 as a senior trader, working in UK Single Stock Options.   From January 2002 he worked alongside the appellants' existing UK Single Stock Options trader as a co-book runner.  He then took it over as the sole book runner in April 2002, at which time it was making a loss.   By the end of that year, however, the Tribunal found that he had turned a loss of 3.5 million pounds into a profit of 7.5 million pounds.  In February 2003 he received a substantial bonus and he was then promoted to director.
5.  The applicant's trading floor consisted of about 20 books run by traders, working in pairs and by country.  The one exception to that rule was the UK Single Stock Option book, of which the applicant was the sole trader.   Of the appellant's eight Equity Derivative traders on the Single Stock desk, seven were white European.  The applicant was the only black trader.   Save for the other director, Mr de Angelis, who was Italian, all the other traders and managers were French nationals.   Until the end of March 2003 the applicant's line manager was Franck Lacour, who, as the tribunal found, held the applicant in high regard describing him as 'a calm, rational and knowledgeable trader' who managed his book skilfully.   After Mr Lacour resigned his new line manager from April 2003 onwards was Areski Iberrakene, who reported to Christopher Chazot, the Head of Equity Derivates.
Events then took a very different turn and the Tribunal's findings of fact as to what occurred between April and September 2003 lie at the heart of this appeal.  In summary at this stage, as the Tribunal found, on 16th April the applicant was given a formal warning about a breach of the trading guidelines.  On 28th April he was suspended from his employment pending an investigation, Mr Chazot informing the applicant that he had concluded that he was deliberately mis-marking his book and understating his profit and loss.   The investigation was carried out by Paul Henderson, Director of Compliance, Global Equities.  In his report, produced on 4th June, Mr Henderson concluded that the applicant had deliberately marked positions in the book in a way that effectively disguised trading losses;  that the marking of the book did not conform to the required standards of marking;  and that the matter should be dealt with under the bank's performance and conduct procedure, because the applicant was potentially guilty of gross misconduct.  The disciplinary hearing took place on 10th June.  The panel was chaired by Martin Korbmacher, Deputy Global Head of Markets, who sat with Andrew Pullman, Human Resources Director, and Bharat Samani from Compliance.   On 12th June the applicant was notified in writing that the panel had concluded that he had failed to ensure that the UK Single Stock book was correctly marked and that he had done this deliberately.  They therefore decided to dismiss him summarily for gross misconduct."
3.	The disciplinary hearing of 10th June 2003 is important.  I pick out these details.  The respondent, Mr Adebayo, expressed serious concern to the effect that he was being singled out for disciplinary treatment, although he was not aware that he had managed his business any differently from his colleagues who were all white.  He raised for the first time the question whether he was being discriminated against on grounds of race and he asked for his concerns to be investigated.  Mr Pullman, the Human Resources Director, said that they would have to think about it, but in the dismissal letter of 12th June Mr Pullman said that these concerns were to be investigated separately.  I take up the narrative from the EAT's summary:  
"8.  The Applicant wrote at length on 19th June, setting out grounds of appeal against the decision to dismiss him and criticising the fact that the decision had been taken without his complaint of race discrimination even being investigated.   After some delay the applicant was sent notice of an appeal hearing to be held on 15th August.  The appeal was heard by Stephen Sidebottom, head of Human Resources for the corporate finance business stream, and David Wenman, head of Equities.   The Tribunal found this to have been a 'brief meeting', which did not amount to a rehearing.  Amongst the documents sent to the applicant in advance of the appeal was a two-page document said to be the 'Findings of Further Investigation' into the applicant's concerns about race discrimination.  The Tribunal found this to have been compiled solely from a consideration of some documents by a junior member of the Human Resources Department, Jo Sumner, at the request of Mr Sidebottom.   There had been no interview with the applicant to discuss his concerns.  On 18th September Mr Sidebottom wrote to the applicant dismissing his appeal.   The only issues considered in the appeal process was the evidence of mis-marking by the applicant from February 2003 onwards;  and at no point in his letter did Mr Sidebottom address the applicant's concerns about race discrimination." 
It is of some importance to note that the applicants called three witnesses before the ET, Mr Henderson, Mr Pullman and Mr Sidebottom.  They did not call Mr Iberrakene or Mr Chazot or any other decision-makers on the disciplinary panel or the appeal.  
4.	In his submissions after the close of the evidence, counsel for the respondent identified five discrete claims of direct discrimination recorded by the ET as follows:
"11(a) singling out the applicant [that is the respondent, Mr Adebayo] for disciplinary procedure;  
 (b) the dismissal; 
 (c) the failure to investigate the race discrimination claim before dismissal; 
 (d) the delay in dealing with the appeal; 
 (e) the delay in dealing with the race discrimination claim."  
In order to understand the ET's conclusions and the applicant's criticisms, it is convenient to set out section 54A of the Race Relations Act 1976, which was added to the statute so as to implement Council Directive 2000/43/EC:  
"(1) This section applies where a complaint is presented under section 54 and the complaint is that the respondent - 
 (a) has committed an act of discrimination, on grounds of race or ethnic or national origins, which is unlawful by virtue of any provision referred to in section 1(1B)(a) - 
 (2) 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 or harassment against the complainant, or 
 (b) is by virtue of section 32 or 33 to be treated as having committed such an act of discrimination or harassment against the complainant 
the tribunal shall uphold the complaint unless the respondent proves that he did not commit or, as the case may be, is not to be treated as having committed that act."
5.	Parallel amending legislation in the sex discrimination field was the subject of guidance given by the EAT in Barton v Investec Henderson Crossthwaite Security Ltd [2003] ICR 1205.  Part of the guidance is the focus of criticism or comment by Mr Linden in this case.  I set out paragraphs 8 to 12 of the guidance:  
"(8) Where the applicant has proved facts from which inferences could be drawn that the respondents have treated the applicant less favourably on the grounds of sex, then the burden of proof moves to the respondent.
 (9) It is then for the respondent to prove that he did not commit, or as the case may be, is not to be treated as having committed that act.
 (10) To discharge that burden it is necessary for the respondent to prove, on the balance of probabilities, that the treatment was in no sense whatsoever on the grounds of sex, since 'no discrimination whatsoever' is compatible with the Burden of Proof Directive.
 (11) That requires a tribunal to assess not merely whether the respondent has proved an explanation for the facts from which such inferences can be drawn, but further that it is adequate to discharge the burden of proof on the balance of probabilities that sex was not any part of the reasons for the treatment in question.
 (12) Since the facts necessary to prove an explanation would normally be in the possession of the respondent, a tribunal would normally expect cogent evidence to discharge that burden of proof.  In particular, the tribunal will need to examine carefully explanations for failure to deal with the questionnaire procedure and/or code of practice."
The ET's conclusions on all issues are set out in paragraph 19 which contains no less than 26 subparagraphs.  I should refer briefly to some of these, though I should emphasise that the whole of the ET's conclusions, as well as their detailed conspectus of the facts, repay careful study: 
"(2) The Respondent had no written Policy as to the marking of books by the traders.  The evidence of the Applicant, which the Tribunal accepted, showed that other traders marked their books in the same way that the Applicant did.   It was substantiated by the fact that the Applicant worked as a co-book runner from 1 January to April 2002 where he learned that practice and was under the supervision of Mr Lacour.  It was consistently maintained by the Applicant's statements at the disciplinary hearing and in the investigation leading to it as well as at the appeal.  It was confirmed by Mr Maccallini's evidence to the same effect.   It was confirmed also by the fact that whilst the applicant was away from work for any reason, his book was managed by Mr Lacour and Mr Maccallini.  It is apparent that Mr Lacour made no complaint about the way in which the applicant's book was marked.
 (3) The reliance by the respondent on the IPV process and the LIFFE comparison did not dispel the indication that the traders mark their books in the same way as the Applicant.   That part of the Applicant's case was not specifically investigated by the respondent at any stage.   The information to the contrary effect came from Mr Chazot.   The Tribunal postulated, as to Mr Chazot himself, bearing in mind of the enormous losses, flowing from the collapse of the Vodafone market which he had been managing in the sense that he managed the Applicant, might not have persuaded him to take more drastic action than the warning that was given in April 2003 once the losses were realised.   However, the respondent did not call Mr Chazot nor anybody else familiar with dealing on the Applicant's trading floor at the material time to produce evidence to the contrary.
 (5) The Respondent decided to dismiss the Applicant who complained that race discrimination might have played a part in the decision to single him out for a disciplinary procedure without ever investigating that complaint before the dismissal decision was reached.
 (6) The investigation into the allegation of race discrimination was inadequate.   The Respondent called no evidence from Miss Sumner who made the report.   There was no documentary evidence that it complied with the Respondent's Equality Opportunities Policy.   Ms Sumner conducted no interviews.   She did not discuss it with the Applicant.   She does not appear to have looked at the marking approach of the other London traders or taken that into consideration in reaching her conclusion.
 (7) Mr Sidebottom wholly failed to investigate the Applicant's complaint that the allegations of race discrimination were not considered before his dismissal.  It is clear from the notes of the appeal hearing that it did not figure in his consideration of the appeal.
 (9) The answers by the Respondent to the specific questions in the Race Relations Questionnaire that we have identified can at best be described as evasive.   But for Mr Dalgarno's frankness, the Tribunal could have reached the conclusion that there was a deliberate decision not to answer those questions properly.   Clearly, to say that the information requested had already been provided, when it has not been so provided is evasive.
 (10) In the light of those conclusions the Tribunal found that the Applicant had established the first stages of the Barton v Investec Securities guidelines.  The Applicant had, on those conclusions, proved on the balance of probabilities facts from which the Tribunal could conclude, in the absence of an adequate explanation, that the employer had committed an act of discrimination.   Accordingly, the burden of proof moved to the employer.
 (12) We asked ourselves whether there was evidence or facts from which the Tribunal could infer that race was in no sense whatsoever the basis for this decision.   The Tribunal at once recognised a very real difficulty.  That is that we did not hear evidence from Mr Kobmacher, Mr Samani or Mr Wenman.
 (13) The evidence of both Mr Pullman and Mr Sidebottom, the Human Resources officers, whom one would presume to be the more skilled and experienced in equal opportunities issues, was unsatisfactory in a number of respects.   Each one failed to consider and presumably to advise the other members of the disciplinary and appeal panels as to the way in which claims of race discrimination or allegations of race discrimination should properly be considered.   That Mr Sidebottom should have considered that Miss Sumner's document was an appropriate response to an allegation of race discrimination was astounding.
 (15) We considered that three particular factors were relevant here:
 (a) the absence of evidence from those involved in the decision-making process;
 (b) the unsatisfactory evidence of Mr Pullman and Mr Sidebottom;
 (c) the evasive answers to the questionnaire.
The respondent failed to provide the cogent evidence for which we looked.   The unsatisfactory and inadequate process for dealing with the allegations of discrimination once raised and the answers to the questionnaire led us, on the balance of probabilities, to find that the respondent failed to prove that race was in no sense whatsoever part of the reason for the decision to discipline and dismiss the applicant.   The further allegations concerning delay in the process, it seemed to us were subordinated into the substantive allegations."
The reference to the evasive answers to the questionnaire recalls facts found at paragraph 10(57) relating to a statutory questionnaire which had been administered on behalf of the respondent and to whose detailed questions the applicants' solicitors simply replied that the documents setting out the process of the investigation, the disciplinary process and its outcome had been disclosed and that those documents contained the relevant information.  
6.	The applicants' criticisms of the race discrimination decision are articulated in Mr Linden's skeleton argument in five propositions, though he has somewhat refined his submissions this morning.  The five propositions are:  (1) The ET followed the Barton guidelines so slavishly as to lose sight of what they actually had to decide:   that is, whether the applicant had been treated less favourably and if so whether that was on racial grounds. (2) They failed to confront the plain answer to the respondent's main complaint: that is, the uncontroverted fact that the applicants honestly believed that the respondent was guilty of gross misconduct.  The fact that the ET held (paragraph 19(25)), in the context of the wrongful dismissal claim, that it was not shown that any mis-marking had been deliberate is irrelevant.  It appears (see paragraph 19(16)) that the ET only had regard to the applicants' honest belief in the context of the unfair  dismissal claim.  (3) The ET failed to analyse each of the respondent's five complaints separately.  (4) They failed therefore to consider whether there had been race discrimination, properly so called, in respect of each of the acts complained of.  (5) The ET did not supply legally adequate reasons for its decision.  
7.	There follows in the skeleton detailed argument as to the law of race discrimination, and not least the Barton guidelines, the last two of which are said to be over- elaborate (see paragraph 14 of Mr Linden's skeleton).  As I have said, Mr Linden somewhat recast his submissions this morning.  He put the matter under three heads:  first, that the ET failed to address the applicants' central argument.  That related to their honest belief in the respondent's gross misconduct;  second, that the ET failed to adopt an analytic approach, dealing separately with the five complaints that had been put forward by the respondent's counsel and, third, though I understood this largely to be adjectival to the other two complaints, they took into account irrelevant or erroneous considerations.  I will refer to some of these matters as Mr Linden developed them, though I find it useful to approach the case by reference to the more detailed elaboration of arguments in his skeleton.  
8.	There is a further document put in by Mr Linden responding to the reasons given by Sedley LJ for refusing permission.  I hope I may be forgiven, in what is I fear a long judgment on a permission application, if I do not set them out.  
9.	I wish to emphasise, by way of preliminary, that it seems to me to be striking that counsel's detailed and careful skeleton does not at all address the reasoning of the EAT before which, essentially at least, the same points were sought to be taken as are sought to be taken now.  I should next say, though really it is not necessary to do so more than in passing, that for my part I see nothing in Mr Linden's potential criticisms of the Barton guidelines.  They may have to be considered on another occasion.  It is enough for present purposes if I indicate that I see no fault in the reasoning of the EAT upon the matter, which is to be found at paragraph 53 of their decision.  
10.	Before the EAT counsel developed a submission encapsulated in propositions 1, 3 and 4 of the five points set out in the skeleton, to the effect that the ET failed to indicate whether a prima facie case was made out in relation to any of the five heads of complaint advanced by the respondent.  This marries with Mr Linden's submission this morning that the ET failed to adopt an analytical approach.  At this stage the argument is directed to the first exercise that the ET has to undertake under 54A, the ascertainment of a prima facie case.  As to this, the EAT said this at page 58:
"The Tribunal's finding at paragraph 19(1) was that the Applicant had, on the balance of probabilities, proved facts from which they could conclude, in the absence of an adequate explanation, that the employer had committed an act of racial discrimination;  and it is important to recognise that their detailed findings of fact played a significant role in the Tribunal's conclusions at paragraphs 19(1) to (9).   In addition, whilst five discrete claims were identified and referred to in the decision, these claims clearly represented a course of conduct towards this applicant by the appellants, which commenced with his being singled out and suspended with a view to commencement of disciplinary proceedings, and ended with the delay in responding to his complaint of direct racial discrimination and in hearing his appeal.  We consider the Tribunal's consideration of and findings on all these matters to be unimpeachable for the following reasons.
There follows a summary of the ET's principal conclusions.  Then this is said: 
"64.  In paragraphs 19(1) to (9) the Tribunal's findings therefore included the following:  this Applicant was the only black trader;  the other, white traders marked their books in the same way as the Applicant;  the Appellants failed to investigate the Applicant's case advanced in the disciplinary hearing that the other white traders marked their books in the same way that he did;  the Applicant was dismissed before any investigation of his race discrimination complaint was carried out;  the subsequent investigation into his race complaint was inadequate and there was a failure to comply with the Appellant's own equal opportunities policy;  the appeal panel failed to consider the applicant's complaint about the way in which his disciplinary hearing was conducted, namely that the disciplinary hearing itself did not consider his complaint of discrimination;  and the appellants had provided replies to the questionnaire which could 'at best' be described as evasive.
65.  In conclusion, therefore, we can see no legitimate basis for the suggestion that the tribunal erred in concluding at paragraph 19(10) that this applicant had on the evidence proved facts from which they could conclude, in the absence of an adequate explanation, that the appellants had committed an act of discrimination, that is that they had treated this applicant less favourably on racial grounds, and that the burden of proof therefore transferred to the appellants.   We also consider that they provided entirely adequate reasoning in relation to their finding that a prima facie case had been established."
I have to say that I see no reason whatever to disagree with this reasoning.  Mr Linden's complaint that the five points taken should have been separately analysed amounts in the circumstances of this case to an unnecessarily overanalytic approach.  
11.	The EAT then considered the second stage which by section 54A the ET is required to undertake: have the employers proved that they did not commit the acts of discrimination which under the first stage might be inferred against them?  This is what the EAT had to say:
"67.  In considering these submissions and the Tribunal's conclusions on these matters it seems clear to us, first, that they found that the appellants had failed to discharge the burden of proof upon them in relation to each of the discrete claims advanced by the applicant, namely the decision to discipline him in the first place and then to dismiss him; the failure to investigate his allegation of discrimination before dismissal, the inadequate process for dealing with it once raised and the failure to rectify this on appeal;  they held further that the claims in respect of delay in dealing with his race discrimination claim and with the appeal itself were 'subordinated into the substantive allegations'.   We therefore reject the suggestion that the Tribunal erred in failing to recognise and to deal with each of the claims made by this applicant, referred to at paragraph 11.
68.  In considering Mr Linden's other submissions under this heading the starting point, in our judgment, is to examine the explanations which the appellants in fact put forward for the less favourable treatment of the applicant, found by the tribunal to have occurred, the burden of proof being upon them at this stage to establish a non-discriminatory explanation on the balance of probabilities.   In this respect it seems clear to us that, in relation to a number of the discrete claims being advanced  by the applicant, no explanation was advanced in evidence at all.   We have referred already to the appellants' closing written submissions, which consisted of little more than the bold assertion that 'there is in reality no element of race discrimination in this case'.    The Tribunal referred to this fact specifically at paragraphs 15 and 19(4) of their decision."   
12.	The EAT then proceeded to consider the question whether any and if so what explanation was advanced by the applicants in relation to the five specific claims made by the respondent, which I have recited from the ET's decision.  The EAT's treatment of the question is at paragraphs 69 to 71.  I need not read out those passages.  Thereafter they stated: 
"72.  Thus, in relation to four of the five discrete claims of discrimination advanced by the applicant either no explanation was being put forward in evidence by the appellants at all or, in relation to claim (d) an explanation originally advanced in respect of delay was not in the event pursued.   Against this background the evasive answers to the applicant's questionnaire were identified by the tribunal as a third relevant factor in relation to the question whether the appellants had discharged the burden of proof upon them pursuant to section 54A.
In our judgment this tribunal did not adhere inappropriately to the Barton guidelines or lose sight of the fundamental question to be determined, namely whether the appellants directly discriminated against the applicant on racial grounds.   On the contrary we find that they directed themselves correctly as to the relevant statutory provisions and focused, entirely properly, on how that fundamental question was now to be determined, having regard to the guidance given by this Appeal Tribunal in the Barton case.  Having found, as we find they were entitled to, that the applicant had made out a prima facie case on the facts they then directed themselves in accordance with that guidance."  
The applicants' major point that the ET failed to address in the race discrimination context the accepted fact that the applicants honestly believed that the respondent was guilty of misconduct by, if I may use the phrase, cooking the books, is dealt with by the EAT at paragraph 74 and following.  This is an important passage:  
"74.  It is important properly to understand the task being undertaken by the tribunal at this second stage.   In the context of an adversarial system all the evidence has been adduced and tested in cross-examination;  the facts have been found, all of which are relevant to their decision on the question whether the employers have discharged the burden of proof upon them;  and a prima facie case of race discrimination has been established.   Where, as here, three complaints, namely wrongful dismissal, unfair dismissal and racial discrimination arise out of the same factual matrix, the facts and the evidence will inevitably overlap and the tribunal will have to apply the relevant legal principles to the same facts.  It is wholly unrealistic to suggest, as Mr Linden does, that the Tribunal compartmentalised the question of the decision-makers' genuine belief as to the applicant's misconduct and did not have it in mind when considering the race discrimination claim.
75.  We note that the appellants did not advance before the tribunal the argument now advanced in this appeal that the decision-makers' genuine belief in the applicant's misconduct meant that they had discharged the burden of proof upon them to show that the applicant's dismissal was not an act of discrimination on racial grounds.  However, leaving that issue aside, there are more substantive grounds for rejecting Mr Linden's submissions on this issue.  Firstly, dismissal for gross misconduct, to which the genuine belief attached, was only one of the acts alleged by this applicant to constitute racial discrimination.   As we have already indicated, no explanations at all were advanced in evidence in relation to the other claims.   The dismissal complaint was therefore only one of a number of complaints being made by the applicant about his treatment;  and in any event the beliefs held by others who were materially involved in the decision-making but not called as witnesses was not capable of assessment.
76. Secondly the fact that, as was accepted by the applicant himself below, there was a genuine belief that the applicant was guilty of misconduct, is not a finding that meant that the only conclusion open to the Tribunal, as Mr Linden submits, was that the appellants had discharged the burden of proving that they were not to be treated as having committed an act of discrimination.   This submission fails to appreciate the insidious nature of discrimination, often referred to in the authorities.   Whilst it is correct that tribunals are focusing at this stage on the reason for the particular treatment complained of by the applicant, it is equally correct that discriminatory assumptions will frequently underpin the stated reason, even where the reason is given in good faith and genuinely believed, and the discriminator is unaware that such assumptions are operating.   These difficulties in exposing discriminatory treatment are well known, have been the subject of comment in a number of authorities and are no doubt responsible, at least in part, for the legislative changes affecting the burden of proof.   Employment Tribunals cannot look inside the mind of an alleged discriminator and expose stereotypical assumptions about, for example, the attitudes, values or behaviour of black African people.   The discriminator may himself be unaware that such assumptions have led him genuinely to believe that the black complainant is guilty of misconduct and that this is thereby discriminating against him.   The solution, at least in part, to such problems, in deciding cases involving allegations of direct discrimination is now to be found in the provisions of section 54A;  and the requirement now placed upon employers, where a prima facie case has been shown, to adduce evidence and prove on the balance of probabilities that they have not discriminated.   Thus, the fact that it was accepted below that those who decided to dismiss the applicant, or at any rate Mr Pullman, who was the only witness called, genuinely believed him guilty of gross misconduct, does not mean that the tribunal were bound to find that the appellants had discharged the burden of proof.   Whether or not that burden had been discharged depended on all the evidence and the facts found by the tribunal."  
I may say that there is nothing in my judgment in any complaint as to the ET's reasons, if that is put forward as a free-standing head of challenge.  In my judgment it is with respect the applicants, by Mr Linden, and not the ET nor the EAT who have adopted an over-technical approach to the case.  Certainly the meaning accorded by statute to discrimination on grounds of race has not been changed by section 54A, but the nature of the adversarial contest undertaken to decide whether a case has been made out or not has been changed.  Barton, one of whose guidelines has been modified in the later case of Chamberlain, seems to me, on the face of it at least, to be perfectly sensible guidance to the operation of section 54A.  In this case the ET undertook the twofold process which the statute required, and for reasons given by the EAT their execution of it was not legally flawed.  
13.	I have not forgotten Mr Linden's reference, urged this morning, to Lord Nicholls' reasoning in Nagarajan v London Regional Transport [1999] ICR 877,884, to the effect that it is always necessary to enquire why the complainant received less favourable treatment.  Nor do I ignore his reliance upon the reasoning of Elias J in Bahl [2001] ICR 1065,1072, to the effect that there may be a non-discriminatory reason for treatment, even though the reason itself is not justified or perhaps not even very honourable.  But the ET's decision is not at variance at all with these approaches.  The position is that the ET set out solid grounds for showing that the respondent had demonstrated a prima facie case and then concluded, justifiably, that the applicants had failed to prove that the reason or reasons for the relevant treatment of the respondent was or were exclusively non-discriminatory.  I accept that the ET for its part accepted that the applicants genuinely believed that the respondent had misconducted himself.  That circumstance is in no way inconsistent with a finding that they had nevertheless failed to prove that there was no racially discriminatory reason for the acts which they found could be inferred against the applicant under section 54A.  Nor do I accept Mr Linden's submission, also advanced this morning, that the ET went on their own finding that the respondent was acting just as other traders were acting rather than considering the state of mind of the applicants' decision-makers.  Here paragraph 59 of the EAT decision is important:  
"59. In relation to paragraphs 19(2) and (3) the tribunal accepted the applicant's evidence that the other white traders were marking their books in the same way that he did.   There were also clear findings that the applicant had initially worked alongside another runner, where he learned and applied the methodology.   Subsequently he was a single runner, but the point was that he had previously been a co-runner and in that capacity had learned to do what he subsequently did when working on his own.   It was found that he was working under the supervision of his line manager, Mr Lacour, and that the problems only began to arise when Mr Iberrakene and Mr Chazot arrived on the scene.   Further, whilst he was away his book was managed by other traders and Mr Lacour made no complaints about his methodology.   We agree with Mr Epstein that it is clear from the tribunal's findings as a whole that the appellants were well aware that the applicant was using the same methodology as the other traders.   It is also clear that the applicant was explaining this to the members of the disciplinary tribunal, as the tribunal set out at paragraph 10(43).     The applicant was expressly comparing his treatment with that of the other white traders, who were using the same methodology as himself."  
The reasoning there seems to me to be correct.  I think it significant that it was the respondent's particular case,  expressly put to the panel, that he was behaving in the same way as were others.  
14.	In all these circumstances, in my judgment Sedley LJ was right to refuse permission in relation to the race discrimination outcome.  
15.	On unfair dismissal it is said that the ET substituted its own view of the question whether the respondent was guilty of misconduct, whereas the question in truth was whether the applicants' view, formed on the evidence available in the disciplinary process, was "within the range of reasonable responses".  It is said that the applicants' view was on the evidence entirely reasonable and that the ET arrived at a perverse conclusion in rejecting it.  In my judgment the ET did not apply the wrong test.  At paragraph 19(17) they posed the question: Was the applicants' belief as to the respondent's misconduct based on reasonable grounds?  That was an appropriate question.  They held that it was not so based and gave detailed reasons (see paragraph 19(17)-(23)), where at paragraph 19(21) they also raised procedural concerns.  I may be forgiven if I do not read out the whole passage, nor the EAT's commentary which is to be found at paragraphs 79 to 86 of their decision.  I will set out paragraphs 84 to 86:
"Given the Tribunal's criticisms of the investigation process, of Mr Henderson's report and the disciplinary panel's approach they were entitled, in our judgment, to conclude that there were no reasonable grounds for the belief held by the appellants that the applicant was guilty of gross misconduct.   We do not consider that, in so concluding, they were erroneously substituting their own view for that of the reasonable employer.   Further, in our view, Mr Linden's criticisms appeared at times to be an attempt to reargue before us the facts of the case.  Certainly his criticisms came nowhere near the high threshold that he accepted he must cross, in order to succeed in an allegation of perversity.
85.  In relation to the submissions as to the finding on the applicant's lack of motive to mis-mark, we agree with Mr Epstein's submission that this was a clear finding of fact in the applicant's favour by the Tribunal, which they made having heard the evidence and considered the submissions (supplementary bundle page 39).   The evidence before the tribunal was that it was irrational for the applicant to mark outside the market;  that it made neither his nor anybody else's job any easier;  that the IPV at the end of the month would always show the true position; and that his managers were aware of the position throughout because he kept them informed, particularly after the 16th April re-mark (see, for example, paragraphs 10(15), (19) and (32)).   This finding cannot in our view be categorised as perverse.   Further, whilst Mr Linden made submissions before us about the effect on the applicant's bonus and the motive this would provide, we note that this suggestion was not made by the appellants below, where it was accepted by the appellants that the IPV would always have shown what the true position was at the end of each month.  
86.  Nor are we persuaded that there is validity in Mr Linden's challenge to the findings on procedural matters.   The tribunal found that the disciplinary panel had concluded that the applicant was guilty of mis-marking only during the period from 16th to 28th April 2003;  that the mis-marking found was only in relation to certain options;  and that the applicant was not found to have been dishonest.   However, in the dismissal letter, these matters were not made clear to the applicant and Mr Sidebottom was unaware that this was the finding of the disciplinary panel.   Thus the appeal, which was in any event found not to have been a rehearing, was unable to cure any defect in the original hearing so as to render an otherwise unfair dismissal a fair one.   It seems to us that this was a finding open to the tribunal on the evidence and we do not regard it as involving any application of 'elysian standards', as Mr Linden described them or any failure to apply the range of responses test."
I agree with this reasoning.  I would not grant permission in relation to the unfair dismissal finding any more than in relation to the race discrimination finding.  
16.	I emphasize the fact that this case has been gone into with great care and in very great detail by two successive specialist tribunals.  In those cases, as Waller LJ suggested to Mr Linden this morning, this court's approach to an application for permission to appeal will be relatively cautious (see Cook V Secretary of State [2002] 3 All ER 279, the White Book, volume 1, 2005 edition, paragraph 52.3.10).  For the reasons I have given I would refuse permission.  
17.	LORD JUSTICE WALLER: I agree. 
ORDER:  Application refused.