IN THE SUPREME COURT OF JUDICATURE			EATRF 96/1612/B
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

								Royal Courts of Justice
								Strand
								London WC2

								Friday, 19 December 1997
	B e f o r e:

	LORD JUSTICE BELDAM
	LORD JUSTICE HUTCHISON
	LORD JUSTICE MUMMERY

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	MARKS & SPENCER PLC
	APPELLANT/RESPONDENTS
	- v -

	ADELL MARTINS
	RESPONDENT/APPELLANT

	- - - - - - 
	(Transcript of the handed down judgment of
	Smith Bernal Reporting Limited, 180 Fleet Street,
 	London EC4A 2HD
	Tel: 0171 421 4040
	Official Shorthand Writers to the Court)
	- - - - - - 

MR I MACDONALD QC with MR B WILTSHIRE (Instructed by Messrs Bindman & Partners, London WC1X 8QF) appeared on behalf of the Appellant

MR E TABACHNIK QC with MR C SHELDON (Instructed by Messrs F J Kiernan, London W1A 1DN) appeared on behalf of the Respondent

	- - - - - - 

	J U D G M E N T
	(As approved by the Court)

	- - - - - - 
	©Crown Copyright

	Friday, 19 December 1997

	J U D G M E N T
Judgment of the Court
LORD JUSTICE MUMMERY:  
	Introduction
	On 28 January 1992 the appellant, Adell Martins, was interviewed for a job as a Trainee Manager with the respondents, Marks & Spencer plc.Ms Martins is of Afro-Caribbean origin. On  29 January 1992 she was informed that her application was unsuccessful.  On 23 April 1992 she lodged an application with the Industrial Tribunal, stating her complaint on the IT1 in these words:
	
	"I have been discriminated against contrary to the Race Relations Act 1976."
	On a separate sheet she provided details of allegations about her treatment at the interview.
	Marks & Spencer contested the complaint, stating in their notice of appearance (IT 3) that they denied that
	"the Applicant was discriminated against contrary to the Race Relations Act 1976".
	This straightforward, simple, serious complaint was heard by the Industrial Tribunal sitting at London South over a period of 7 days spaced  out between 22 April 1994 and 6 April 1995.  Both sides were legally represented. It appears that only 1 day was originally set aside for the hearing and that the subsequent adjourned hearings were also of too short duration to allow the case to be completed without the need for yet further adjournments. In Extended Reasons sent to the parties on 31 May 1995 the Industrial Tribunal unanimously decided that the complaint of racial discrimination should succeed.  Compensation of £3,000 for injury to feelings was awarded and the case was adjourned generally, with leave to either side to apply upon the question of further compensation.
	By Notice of Appeal dated 28 June 1995 Marks & Spencer appealed to the Employment Appeal Tribunal, contending that the Industrial Tribunal had misdirected itself in law.  The appeal was heard by the Employment Appeal Tribunal on 26 March 1996.  Judgment was given on 14 May 1996.  The majority of the tribunal decided to allow the appeal, quash the decision and dismiss the complaint.
	It was now the turn of Ms Martins to appeal.  Pursuant to leave granted on 18 November 1996 she served a Notice of Appeal dated 19 November 1996, contending that the decision of the Industrial Tribunal should be upheld and that the majority of the Employment Appeal Tribunal reached wrong conclusions.
	This court is now faced, in December 1997, with a case about an act   committed almost 6 years ago; one side says the appeal should be allowed; the other says that the appeal should be dismissed; the only proper course may be to remit this matter for re-hearing by a different Industrial Tribunal (a course which both parties oppose for obvious reasons). This is indeed a sorry state of affairs.  The system, which provides a speedy, informal,inexpensive solution for most complaints of this kind, has failed these parties.  This is not the fault of any particular individual or institution. But there are certainly some lessons to be learned.
	The Law
	It is common ground that the relevant provisions of the Race Relations Act 1976 (the 1976 Act) pose two questions for decision in this case:
	(1)	Was Ms Martins treated less favourably than Marks & Spencer treated or would treat other persons in the same circumstances? (the treatment issue). If so, 
	(2)	Was that less favourable treatment "on racial grounds"?
(the causation issue).
    Although the Tribunal did not, in its decision, refer expressly to any provisions of the 1976 Act, it is necessary, for the purpose of disposing of the rival arguments on this appeal, to examine carefully the language of the following sections:
	"1 (1) A person discriminates against another in any circumstances relevant for the purposes of any provision of this Act if - 
	(a)	on racial grounds he treats that other less favourably than he treats or would treat other persons;

	3 (1) In this Act, unless the context otherwise requires - 
	"racial grounds" means any of the following grounds, namely colour, race nationality or ethnic or national origins;
	"racial group" means a group of persons defined by reference to colour, race, nationality or ethnic or national origins, and references to a person's racial group refer to any racial group into which he falls.
	(3) In this Act - 
	(a) references to discrimination refer to any discrimination falling within section 1 or 2......
	(4)  A comparison of the case of a person of a particular racial group with that of a person not of that group under section 1(1) must be such that the relevant circumstances in the one case are  the same, or not materially different, in the other.

	4(1) It is unlawful for a person, in relation to employment by him at an establishment in Great Britain, to discriminate against another - 
	(c) by refusing or deliberately omitting to offer him that  employment.

	32(1) Anything done by a person in the course of his employment shall be treated for the purposes of this Act (except as regards offences thereunder) as done by his employer as well as by him, whether or not it was done with the employer's knowledge or approval.

	(3) In proceedings brought under this Act against any person in respect of an act alleged to have been done by an employee of his it shall be a defence for that person to prove that he took such steps as were reasonably practicable to prevent the employee from doing that act, or from doing in the course of his employment acts of that description.

	54(1) A complaint by a person ("the complainant") that another person ("the respondent") -
		(a)	has committed an act of discrimination against the complainant which is unlawful by virtue of Part II; or
		(b)	is by virtue of section 32 or 33 to be treated as having committed such an act of discrimination against the complainant,
		may be presented to an industrial tribunal."
	The Decision of the Industrial Tribunal
	The overall conclusion of the Industrial Tribunal is stated in paragraph 22 of the Extended Reasons:
	"Our conclusion, therefore, is that the Applicant was denied an opportunity of employment as a Trainee Manager with the Respondent by reason of the effects of a discriminatory attitude prevailing in the organisation.  The Respondent totally failed adequately to inquire when this result was challenged.  In general, the Respondent's extensive efforts to pursue its equal opportunities policy, however unsuccessful they may be, would not permit us to say that the Respondent had failed to take reasonable steps to eliminate discrimination.  In this particular instance, however, the Respondent has failed to take reasonable steps to inquire into this allegation to ascertain whether it has a foundation and, if it appears to have a foundation, to rectify the position.  The Respondent is, therefore, vicariously liable for what happened in the interview with the Applicant on 28 January 1992."
	In order to understand how the tribunal arrived at this unanimous conclusion, an attempt must be made to ascertain the findings of fact by the tribunal on the two crucial issues of less favourable treatment and causation. The Employment Appeal Tribunal did not find this an easy task and made the following comment (p.3):
	"Having regard to the history of the hearing set out above, it may well be that drafting the Reasons posed problems: reviewing in April 1995 the issues and the evidence cannot have been forensically easy.  That said, the Reasons as drafted have posed problems for all concerned in this Appeal: the whole is long, ill-organised and often rhetorical rather than judgmental in style.  Crucial findings of fact have to be mined from separate not readily reconcilable passages and non sequiturs hinder comprehension."
	
	The tribunal commented that, in addition, there had been
	"failure to make findings specific to the relevant provisions of the Race Relations Act 1976, indeed the Reasons do not include any specific reference to the Act or its terms." 
	We regret to say that these strictures are justified. We are all aware, as former judges of the Employment Appeal Tribunal, of the difficulties faced by Industrial Tribunals in lengthy contested race discrimination cases. The difficulties of the tribunal in this case are unfortunately encountered in      some other race and sex discrimination cases.  The Industrial Tribunals have an enormous,ever-increasing case load.  If a case overruns the estimated length and cannot be finished within the time initially allotted to it, there are unavoidable problems in fixing the dates of the adjourned hearing to suit all three members of the tribunal, as well as the parties,their representatives and their witnesses.  There is an added difficulty in cases of race and sex discrimination, as explained by Lord Browne-Wilkinson in Strathclyde Regional Council v Zafar (House of Lords- 27 November 1997):
	"Claims brought under the Act of 1976 and the Sex Discrimination Act 1975 present special problems of proof for complainants since those who discriminate on grounds of race or gender do not in general advertise their prejudices: indeed they may not even be aware of them. Over the years since 1975 the courts have sought to give guidance to Industrial Tribunals as to how inferences of fact can properly be drawn in this context. The best guidance is that given by Neill LJ in King v Great Britain-China Centre [1991] IRLR 513 at 518." 
	Thus, an absence of direct evidence of race discrimination does not mean an absence of race discrimination. What it does mean is that the parties bring to the Tribunal a large amount of evidence in order to persuade the tribunal, on the applicant's side, to make an inference that the reason for less favourable treatment was racial and, on the respondent's side, to rebut any such inference that the tribunal is asked to make.  In practical terms this means that in race discrimination cases the tribunal often hears a large number of witnesses giving wide ranging evidence, only to find,at the end of the case, that much of it is of marginal relevance to the key question of causation. All this creates practical problems for the Chairman in his efforts  both to contain the issues canvassed within reasonable limits and to ensure that both sides are given a full and fair opportunity to present their case to the tribunal. If the hearing is spread out over a number of days, separated by long intervals, there are additional problems in dealing with the  witnesses, their oral evidence, the deliberations of the three members of the tribunal and the writing of the Extended Reasons by the Chairman.
	It should, however, be emphasised that in all cases,short or long drawn out, the function of the tribunal is clear. The duty of the tribunal, having heard the evidence and argument, is to give reasons for its decision, so that the party who has lost knows why he has lost. In practical terms, that means that it should state its findings of primary fact and any inferences it draws from  those facts as clearly and concisely as possible and it should then apply the relevant statutory provisions, as interpreted by the courts, to those facts in order to arrive at a conclusion. It is not normally necessary to set out in the decision or to discuss in detail the evidence given to the tribunal. The Extended Reasons in this case are too elaborate both in the detailed recitation and in the discursive treatment of the evidence. The unfortunate result is that, on key issues, clear findings of fact have not been stated and there are self-contradictory conclusions.
	The Salient Facts
	The tribunal's unanimous decision that there was racial discrimination was based on the following main facts:
	(1)	In 1991 Ms Martins applied to Marks & Spencer for appointment to a post as Trainee Manager.Over the previous three years she had made three unsuccessful applications for a similar appointment.   She was 27 years  old with previous experience as a part time employee of Marks & Spencer in one of its retail stores.She later held a number of permanent full-time posts in some way connected with fashion buying with the Richards Group and Woolworths.  She had done a course in merchandising and buying for distributive trades and secured the Higher National Diploma. 
	(2)	Unknown to Ms Martins and to the general public, Marks & Spencer had, in the spring of 1991, introduced a complete freeze on new recruitment for management posts.  All applicants received a standard letter regretting their non-employment and saying that the reason was a larger number of highly qualified people from whom Marks & Spencer could choose.
	(3)	Ms Martins concluded that the rejection of her application without interview must have been racial discrimination.  She brought a claim in the Industrial Tribunal.  It was settled at an Industrial Tribunal hearing in November 1991, on Marks & Spencer agreeing to pay Ms Martins £250 compensation and to give her an interview.
	(4)	The interview was arranged in January 1992.  Steps were taken by Mrs Sadler, the Recruitment Manager, in consultation with Mrs Tyzack, also a recruitment manager, to ensure that members of the interviewing panel were unaware that Ms Martins' interview was the result of the settlement of a claim for racial discrimination.  It was arranged through Mrs Freeman, one of the two Divisional Directors responsible for personnel management, that she would request a "special" interview for Ms Martins in order to "eliminate all suggestion of bias in the panel."  The tribunal considered the question whether either member of the interviewing panel could reasonably be supposed to have ascertained the reason for the interview before or during the interview.  The two members of the interviewing panel were Mr Walters, a Senior Selector (Buyer), who is Afro-Caribbean,and Mrs Susan Cherrie, who was Senior Group Personnel Manager. On this point the tribunal was satisfied that "neither Mrs Cherrie nor Mr Walters had any suspicion that this was other than a genuine response to a special request from Mrs Freeman."
	(5)	Before the interview on 28 January 1992 Ms Martins was required to take a half hour practical test designed to assess her ability to select colours, patterns and other aspects of a range of clothing with a view to its marketability.  Ms Martins did well in that test.  
	(6)	The interview then took  place before Mrs Cherrie and Mr Walters in Mrs Cherrie's office. The interview lasted about 40 minutes.About 15 minutes of the interview were devoted to discussion of Ms Martins' performance in the practical test.
	(7)	Ms Martins was subsequently informed that she had been unsuccessful in obtaining an appointment.  She wrote asking for further details of the reasons for her failure.  Unusually, she was granted an interview by Mrs Tyzak who produced for Ms Martins a blank interview report form, which disclosed the criteria on which the interview was based. The notes taken by Mrs Cherrie and Mr Walters  during the interview had apparently been destroyed immediately after the writing of the interview report by Mrs Cherrie and Mr Walters.
	(7)	The tribunal considered the evidence given by Mrs Cherrie and Mr Walters about the performance of Ms Martins in the interview.  It was satisfied that Mrs Cherrie adopted the same attitude to the "special" interview as she would to a normal interview. Mrs Cherrie's evidence was that Ms Martins' fundamental area of weakness was that she did not  "communicate  effectively. She was just not clear."  She was disappointed with her performance, because it was "not up to the standard she would have expected from the application form."  She took into account the fact that Ms Martins was aged 27  and not, as applicants usually would be, 21.  Like Mr Walters,she took particular note of an answer by Ms Martins suggesting that she allowed her work to be disorganised.  Mr Walters gave evidence that he was disappointed with Ms Martins' performance after the satisfactory test assessment.He gained the impression from Ms Martins' answers that they indicated lack of decisiveness and that she displayed no good points "except flair in putting together her range during the practical test."  The tribunal questioned the correctness of this assessment and regarded it as over-critical on the part of Mr Walters.
	(8) In noting the impression created by Ms Martins as a witness at the hearing, the tribunal said (paragraph 11):
	"We are aware, for all three of us have spent a lifetime interviewing, that it is perfectly obvious that people do behave differently on different occasions and there is absolutely no doubt that every individual can have a bad interview.  On the other hand, it is not our experience that people in interview can appear as something completely different than they do on other occasions.  We record the impression of the applicant as a witness before us as coherent, articulate, with well-presented evidence, well organised accounts of situations and with clear evidence of utter commitment in her chosen career.  She was a person who had formulated an excellent application form revealing a long period of training for work in the field of fashion.  She was able and intelligent.  We are not experts in her chosen field but we have little doubt that she would actually have been an excellent acquisition."
	(9)	The tribunal considered the report which Mr Walters and Mrs Cherrie together compiled on the interview. In doing so the tribunal drew on what is described as their "very extensive experience of interviewing."  The tribunal criticised statements in the report in relation to the various criteria applied to Ms Martins during her interview. For example, the report described Ms Martins as "inarticulate" and therefore unable to influence the decision making process.  The tribunal commented:
	"We can scarcely conceive of any situation in which the Applicant we saw, and for that matter the Applicant Mrs Tyzack saw, could properly be described  as inarticulate."
	The tribunal criticised other conclusions in relation to the incisiveness of the applicant and her disorganisation. On the criterion of analysis and self presentation, the tribunal said:
	"We find it difficult to believe that her powers of communication completely deserted her immediately she turned to other matters.  But even if she did, this comment does not, in our opinion, adequately reflect what we know of her performance."
	The tribunal added (paragraph 13):
	"We are well aware, of course, that it will be said that we were not at the interview and we are not in a position to make these judgments.  We wish to make it quite clear that what we are saying, perhaps best phrased in legal terms, is that these judgments are perverse on the face of the evidence."
	(9)	The tribunal concluded, in relation to the interview report, as follows:
	"In our view, on the evidence with which we have been presented,on the evidence of the application form, on the evidence of the Applicant's experience, on Mrs Tyzack's assessment of the Applicant's ability in an interview, on our own assessment of the Applicant's inherent ability in examination and cross-examination and on the evidence of a successful selection test which was obviously a significant part of the selection process, comments such as the applicant receives can only  demonstrate  a desire to make the worst possible judgment of each situation.  We have not the slightest doubt that to give the Applicant five of the six lowest possible marks is a clear indication of bias......... We are categorically saying that nothing but bias can explain their assessment and their marking in this instance." 
	(10) In response to Ms Martins' request for a more detailed explanation of the reasons for her lack of success, Mrs Tyzack decided that it would be appropriate to see Ms Martins and discuss the situation with her.  In preparation for that interview she spoke to Mrs Sadler.She appears to have assumed that Mrs Sadler had checked in detail with Mrs  Cherrie about the nature of the conclusions.  Mrs Sadler had received  Mrs Cherrie's report, but there was no evidence that she had discussed the basis  for its conclusions with her. All that Mrs Tyzack had upon which to base her interview with Ms Martins was no more than the summary form of report from the original interview. Mrs Tyzack approached her interview with Ms Martins with the "clear assumption that everything had been conducted satisfactorily.  That assumption is based on second hand and untested evidence.  No one seems ever to have thought of approaching Mr Walters for an account."
	(11)	At this stage Ms Martins had not yet alleged that the interview demonstrated racial discrimination; she simply indicated dissatisfaction with it.  Mrs Tyzack knew, however, that the whole situation arose out of an allegation of race discrimination. The tribunal found it surprising that "a highly competent and senior manager should not have conducted any sort of adequate inquiry into precisely the issue which the Applicant was asking her to delve.  The tribunal concluded that this failure was because "it was an unusual procedure to which Mrs Tyzack was not used." There was no system of appeal from the decision of an interviewing panel. In the tribunal's view the truth was that "she was going through a public relations exercise."  The "ill-prepared" interview with Mrs Tyzack took place. During the interview Ms Martins alleged that Marks & Spencer pursued racist policies. In response to that allegation Mrs Tyzack had a further consultation with Mrs Sadler and concluded that no further action was required.The tribunal said (paragraph 16):
	"... whatever steps the Respondent has taken, and there is no doubt they are extensive, to counter any suggestions of racial discrimination, what was done in this particular case fell short of reasonable steps to deal with the allegation that the Applicant was making.  Possibly unknown to her, those steps were down to Mrs Tyzack. What she did was plainly not a reasonable response to that allegation."
	The Respondents had failed "to take reasonable steps to eliminate any racial discrimination."
	(12)	The tribunal then considered (paragraph 17) whether the explanation "for the obvious bias which we find to have been displayed in the interview is an inference of racial discrimination."  On this aspect of the case the tribunal made a number of findings.  Although Marks & Spencer did not accept there had been racial discrimination in their policies, they did accept that there was "a widespread public perception that it is a white, middle class organisation."  The tribunal found that the steps taken by Marks & Spencer to counter this perception were "far in excess of those taken by most employers".  The tribunal added that Marks & Spencer "had done far more, generally speaking, than it could reasonably be expected to do", but added that, in the tribunal's view, the depressing conclusion was that it had "very little effect."  The tribunal referred to what it regarded as low percentages of employees from racial minorities in Head Office (2.6%) and in retail stores outlets (1.3%) whereas it had been accepted that the figure should have been somewhere between 3 and 3.5%.  The tribunal recorded that the witnesses for Marks & Spencer agreed that it was accepted among relevant members of management that they were perceived by the public as a white middle class organisation and added: "It has to be acknowledged that few large employers can have done more in an attempt to reverse an impression and eliminate racial discrimination."  The tribunal referred to what they describe as "extensive efforts" on the part of management and to efforts which were "very substantial", though they had produced "very little change in the ethnic mix among HQ staff and that even in stores there is a substantial imbalance."  The tribunal said:
	"Since we must draw inferences to explain what we have found to be the obvious bias of the interview in this instance it is appropriate to consider why such efforts have failed and what the failure reveals.  To put our conclusions simply, it is our view that there remains a climate of unrecognised discrimination among middle management.  So far as the witnesses we have heard are concerned there is no doubt that they accept that monitoring reveals very little improvement in disappointing proportions of employment of ethnic minorities but there is equally no doubt that none of the individuals concerned see it as any criticism of themselves personally."
	(13)  The tribunal considered the position of Mr Walters, who it said had been "deliberately selected to give the impression of lack of racial discrimination to the Applicant in this case."  While  it regarded this as a sensible policy and  did not criticise it,it added that "Mr Walters was  used  in this respect precisely as Mrs Cherrie was."
	(14)  The tribunal found that Mr Walters' part in the interviewing process had been ignored by Mrs Tyzack in relation to the Applicant's complaints. Though Mr Walters was extremely active among racial minorities attempting to improve their prospects on appointment, Mrs Richard, the Equal Opportunities Manager, had made no contact with Mr Walters for 18 months after her appointment.  The tribunal also referred to the evidence of Mrs Richard, which included the assertion that "members of ethnic minorities were probably not chosen because the Respondent had high standards" and that she was not the only witness "to suggest that ethnic minorities were not coming through to the standard required."
	(15)  In paragraph 20 of the decision the tribunal stated, in reference to what  it described as "attitudes of mind", that
	"In our view it is very difficult to suggest,either in the present case or generally, that any individual is especially to blame, and certainly not that any individual is racist.  But we believe that most of the individuals we have seen  are infected by a corporate mentality, which, to put it simply, prefers the majority."
	(16)  In an important paragraph in the decision (paragraph 21) the tribunal said that it was faced "with the result of an interview which we are convinced can only be said to be  biased.  We have, not surprisingly, no direct evidence as to why that bias should have occurred.  If that bias did occur then it seems that it existed both in Mrs Cherrie and in Mr Walters, himself a member of an ethnic minority."
	The tribunal considered, but rejected, the possibility that Mr Walters was dominated by Mrs Cherrie. It found Mrs Cherrie to be an impressive witness.  It found Mr Walters equally impressive and had "difficulty in imagining him kow-towing to anyone." It referred to the evidence that Mr Walters played a "very active part among racial minorities encouraging them to pursue career prospects and assisting them to be in the right position to do so."  The tribunal added:
	"It is inconceivable that Mr Walters would actively discriminate against the Applicant.  We believe, however, that Mr Walters, like Mrs Cherrie, was infected by the somewhat generalised discriminatory attitude which we have just outlined.  It seems to us not only reasonable but correct to infer that that infection produced the reaction that gave rise to the destructively negative interview report that we have revealed earlier in this decision."
	The tribunal concluded in paragraph 22, already  quoted, and rejected Marks & Spencer's reliance on the statutory defence in section 32(3) of the 1976 Act.
	The Appellant's Submissions
	Mr Ian Macdonald QC, on behalf of Ms Martins, contended that the decision of the  majority of the Employment Appeal Tribunal was wrong in allowing the appeal and that the decision of the Industrial Tribunal should be upheld.  His submissions may be summarised as follows:-
	(1)	The Industrial Tribunal had made three essential findings of fact: first, that the interview panel's judgments about Ms Martins were perverse and their assessment in the marking of her could only be explained by bias on their part; secondly, that the reason for the bias was that the interviewers were infected by a discriminatory corporate mentality or attitude "which prefers the majority"; in other words, it was a case of "institutional racism rather than individual racism"; and, thirdly, despite their general efforts to pursue an equal opportunities policy, Marks & Spencer had failed in this particular instance to take reasonably practicable steps to deal with the act of discrimination alleged by Ms Martins and to eliminate discrimination by enquiring whether it had a proper foundation and, if so, to rectify the position.
	(2)	Those findings of fact were a matter for the Industrial Tribunal acting  as an industrial jury. Neither the Employment Appeal Tribunal nor this court could overturn such findings as perverse, unless they found that there was no evidence on  which to base those findings or that it was a case where a court could say "My goodness, that certainly was wrong": see Hereford and Worcester County Council -v- Neale  [1986] IRLR 168 at 173, 174.
	(4)	This was not such a case. Nor was it a case where there was any error on the part of the Industrial Tribunal in interpreting or applying the law.
	(5)	It has to be borne in mind that cases of racial discrimination present special difficulties, since there is seldom direct evidence of such discrimination.  It was for the Industrial Tribunal to establish the primary facts and then draw such inferences as were legitimate from those facts, failing an adequate  or satisfactory explanation from the employer: King -v- Great Britain-China Centre [1991] IRLR 513 at 518 (now approved by the House of Lords in Strathclyde Regional Council v Zafar(supra))  If a tribunal made such inferences, an appeal tribunal or court should be slow to interfere with them, unless they were plainly wrong or were such that no reasonable tribunal could make those inferences.
	(6)	An Industrial Tribunal should not simply accept the employer's denial of racial discrimination.  It should be astute to see whether "behind what is said", there has been, in truth, discrimination of the kind which the Act now makes unlawful: British Gas PLC -v- Sharma [1980] IRLR 101 at 106.
	(7)	The 1976 Act was directed at conduct rather than attitudes or prejudices.  It was possible for a person to commit unlawful acts of discrimination, even though that person was not at all prejudiced or conscious of discriminating.  There were various forms of discrimination on the ground of race. Among them was unconscious or institutional  discrimination.  It was submitted that "institutional discrimination" is recognised by necessary implication in the provisions of section 1 of the 1976 Act. It is certainly recognised in those cases of indirect discrimination, which are outlawed by section 1(1)(b) by reference to disproportionate and discriminatory effect on an ethnic group; that may occur whether discrimination was  intended or not.  The Act itself, in provisions relating to compensation in section 57(3), draws a distinction between conscious and unconscious indirect institutional discrimination: an employer is exempted from paying compensation if he can prove that he has applied a discriminatory requirement without intending to discriminate on racial grounds.  Institutional discrimination is also recognised under section 1(1)(a). The cases showed, in particular King -v- Great Britain China Centre (supra), that an individual could discriminate without intending to do so or even being conscious of the fact that he or she was acting in that way.
	(9)	It was accepted that Section 32 (3) of the 1976 Act was directed at those steps which an employer takes  in advance of a discriminatory act to prevent it from happening.  The adequacy, reasonableness or practicability of those steps was a matter of fact for the Industrial Tribunal. It was submitted that the relevant act in question was not the act of the interviewers on the panel, but of the employer, Marks & Spencer,in deliberately refusing or omitting to offer Ms Martins a job.
	(10)	The Industrial Tribunal's findings, summarised above, were ones which the tribunal was entitled to come to on the evidence.  The tribunal had correctly applied the relevant law, had established the primary facts and drawn legitimate inferences from them.
	(11)	There had been no substitution by the Industrial Tribunal of its own view for that of the employer. The tribunal had made a specific disavowal of that in paragraph 13 of its decision.
	(12) A finding of bias on the part of the interviewers had been made only after very careful and detailed consideration of the oral and documentary evidence relating to the scoring of Ms Martins' responses to questions during the interview.  The tribunal was entitled, as an industrial  jury, to reject the explanations that had been given for the dissimilarity in treatment of Ms Martins compared with other candidates scoring in an oral interview on the basis of their performance in the practical test. There were no grounds for submitting that the tribunal's conclusion on the finding of bias was perverse or plainly wrong.
	(13)	The tribunal was entitled to reject as an explanation for the poor assessment of Ms Martins by the interviewing panel that she was "having a bad day".  The position was that the finding of bias about the interview called for an explanation; the tribunal did not consider that any explanation  advanced  by Marks & Spencer was adequate or satisfactory. It was entitled to  come to that conclusion.In those circumstances it was legitimate  to  draw the inference that the reason for the biased  assessment was the existence of a corporate mentality "which favoured the majority." The tribunal was entitled to find that this was a case of "institutional discrimination" without establishing that any individual had a racist motive or was prejudiced to discriminate on racial grounds.
	(14)	As for the defence under section 32(3) under the 1976 Act, reasonableness of the steps taken by the employer to prevent discrimination from occurring was essentially a matter of fact for the tribunal to decide.  The tribunal was entitled to decide that, in order to prevent employees from discriminating against job applicants in interviews, the employer must provide, inter alia, for the appropriate review of the interviewing panel's decision.  The tribunal had not made any error of law or acted perversely in its findings of fact in relation to the statutory defence in section 32(3). The tribunal was entitled to find that what was done in this particular instance fell short of reasonable steps to rectify the situation and to conclude that Marks & Spencer had not made out the defence provided in section 32(3).
	Conclusion
	In our judgment, the decision of the Industrial Tribunal is legally flawed.  The majority in the Employment Appeal tribunal correctly allowed the appeal from the Industrial Tribunal and dismissed Ms Martins' complaint.  This appeal will be dismissed for the following reasons:-
	(1)	The Industrial Tribunal made a fundamental error of law in asking itself and in answering the wrong question,a different question from that required by the 1976 Act.  In Strathclyde Regional Council -v- Zafar (supra) Lord Browne-Wilkinson (with whose speech the other four members of the Appellate Committee concurred) said that although, at the end of the day, section 1(1) of the Act of 1976 requires an answer to be given to a single question (Viz.  Has the complainant been treated less favourably than others on racial grounds?),
	"it is convenient for the purposes of analysis to split that question into 2 parts -(a) less favourable treatment and (b) racial grounds...."
	The first part of the question is: was Ms Martins treated by Marks & Spencer less favourably than they treated or would treat another person of a different racial group in the same or relevantly similar circumstances?  The answer to this question requires a comparison to be made between the treatment of Ms Martins and the treatment of a 27 year old applicant of a different racial group with similar experience and qualifications applying for the same job.  The tribunal did not attempt to make the compulsory comparison.  Instead, it simply asked itself whether there was "bias" on the part of Mrs Cherrie and Mr Walters against Ms Martins and concluded that there was.  This approach is defective.  In a complaint under the 1976 Act the focus is not on whether the conduct of the employer or putative employer towards the complainant is biased or unreasonable or unfair: as Lord Browne-Wilkinson said in Strathclyde Regional Council -v- Zafar (supra), the fact that an employer has acted unreasonably (eg in the sense relevant to a claim for unfair dismissal) casts no light whatsoever on the question whether he has treated the employee "less favourably" for the purposes of the 1976 Act.  Adapting the words of Lord Morison in the Court of Session in that case, it cannot be inferred only from the fact that the interviewers acted in a biased way towards Ms Martins, that the same interviewers would have acted in an unbiased way in dealing with another applicant in the same circumstances.  The tribunal wholly failed to address itself to the issue, which Ms Martins had to establish in order to make out a claim for racial discrimination, whether she had been treated less favourably than the interviewers would have treated another applicant in the same circumstances.  The finding that Marks & Spencer interviewers were guilty of "bias" against Ms Martins is not a relevant or meaningful finding for the purpose of the 1976 Act.
	(2)	The tribunal made a second and equally serious error in its approach to the assessment of the evidence concerning the all-important interview of Ms Martins by Mrs Cherrie and Mr Walters on 28 January 1992. What the members of the tribunal did, despite protestations to the contrary, was to substitute themselves,  claiming to be experienced and unbiased interviewers, for Mrs Cherrie and Mr Walters.  On the basis of their own experience as interviewers (which they asserted, but of which they gave no details) and on the basis of the impressions that they formed of Ms Martins as a witness and of Mrs Cherrie and Mr Walters as witnesses, they substituted their own views of the impression that Ms Martins would have made on them, had they conducted the interview over 2 years previously.  In the Extended Reasons they protested that they were not doing this.  They may not have intended to do this or have even appreciated that they were doing it but, on a fair reading of the whole of the Extended Reasons, that is the effect of what they in fact did.  They went further than drawing on their own general experience of human life and their specialised industrial experience to determine whose evidence they accepted on a point on which there was a conflict of fact.  Indeed, the tribunal did not simply substitute its overall impression of Ms Martins as a candidate in the hypothetical interview conducted by them: it combed through each of the criteria applied in the interview and explained the reasons why it disagreed with the assessments made by the  actual interviewers  of Ms Martins applying those criteria.In London Underground Ltd v Nagarajan  (Court of Appeal-7 November 1997) Peter Gibson LJ said:
	"In considering whether the interviewers in a selection process discriminated against an applicant the Industrial Tribunal should not usurp the function of the interviewers by substituting their own criteria or assessments for those of the interviewers when their own assessments are based on material not available to the interviewers, such as the impression given by the applicant on a subsequent occasion. It must further be recognised that a selection process inevitably involves a comparison between candidates and matters of impression and judgment on which views may honestly and legitimately differ." 
He added a timely reminder that;
	"A difference in the treatment of candidates is irrelevant unless it amounts to less favourable treatment of the complainant."
	This tribunal adopted a legally incorrect approach to the complaint about the interview, by substituting its own favourable assessment of Ms Martins, based on its own observations of seeing and hearing her at the tribunal, for that of the interviewers, and on its own application of the criteria to her performance in the tribunal. That is an unsound basis for a finding of less favourable treatment or for a legitimate inference of discrimination on the ground of race,   
	(3)	These errors of approach were carried across into the second part of the question,if there was less favourable treatment of Ms Martins,  whether the reason for it was racial.  In concluding that the treatment of Ms Martins by the interviewers was on racial grounds, the tribunal unfortunately made contradictory findings of fact which make it impossible to affirm the finding of racial discrimination.  In one part of the Extended Reasons  (paragraph 13)  it concluded that the explanation for the interviewers' assessment of Ms Martins was "a desire to make the worst possible judgment of each situation".
	The tribunal added:
	"We have not the slightest doubt that to give the applicant five of the lowest possible marks is a clear indication of bias."
	This is a clear finding that, if there was less favourable treatment of Ms Martins, it was the result of a deliberate "bias" on the part of the two interviewers.  In another part of the Extended Reasons (paragraph 21) the tribunal repeated its finding that it was faced "with a result of an interview which we are convinced can only be said to be biased."  And added that,if bias did occur, it existed both in Mrs Cherrie and in Mr Walters "himself a member of an ethnic minority". The tribunal rejected the possibility that Mr Walters was dominated by Mrs Cherrie and the possibility that Mr Walters would "actively discriminate against Ms Martins".  This language would appear to acquit both Mr Walters and Mrs Cherrie of the earlier charge  of a desire to make "the worst possible judgment of each situation" affecting Ms Martins.  The tribunal was only able to reach the conclusion that there was a racial ground for the less favourable treatment by reference to the "somewhat generalised discriminatory attitude" which it found existed in the "corporate mentality" infecting "most of the individuals we have seen".  In our judgment, no reasonable tribunal could reach a conclusion of less favourable treatment on the ground of race on the basis of these  contradictory conclusions in different parts of the Extended Reasons about the conduct by Mrs Cherrie and Mr Walters of their interview and assessment of Ms Martins. 
	(4)	As the Employment Appeal Tribunal indicated in  its judgment, an appellate body faced with this situation would usually remit the case for re-hearing by a different industrial tribunal taking a correct legal approach to the issues for its determination and to the assessment of the evidence.  Although there are serious difficulties in adopting this course after the lapse of nearly 6 years since the events complained of, it is in most cases the only way in which the matter can be brought to a satisfactory conclusion.  It is not usually open to an appellate tribunal to substitute a different decision for the decision of the industrial tribunal which contains the errors of law;
	"If the conclusion was wrong or might have been wrong, then it is for an appellate tribunal to remit the case to the only tribunal which is charged with making findings of fact". 

	See Dobie -v- Burns International Security Services (UK) Ltd [1984] ICR 812 at 818 per Sir John Donaldson MR. In this case,however, we are satisfied that the conclusion reached by the tribunal, as a result of a self misdirection under section 32(3), is "plainly and unarguably wrong upon the facts found by the Industrial Tribunal and those facts do not require any further amplification or reinvestigation."  See Hellyer Brothers Ltd -v- McLeod [1986] ICR 122 at 130 and [1987] ICR 526 at 547 D to E.  In those circumstances this court is entitled to substitute its own conclusion as to what those  factual findings require in law. In our judgment, the Industrial Tribunal misinterpreted Section 32(3) of the 1976 Act.  On the application of the correct interpretation to the facts found by the tribunal Marks & Spencer are entitled to rely on the defence.  Both Mr Macdonald, for Ms Martins, and Mr Tabachnik, for Marks & Spencer, agreed that section 32(3) is directed to providing a defence for an employer who has taken,in advance of the alleged discriminatory treatment, all reasonable and practicable steps to prevent discrimination from occurring. The  essential issue is as to what is the relevant "act" referred to in section 32(3).  Mr Macdonald argued that the relevant act is the act complained of under section 4(1)(c), namely the refusal to offer employment to Ms Martins.  If that is the correct approach then, he submitted, the tribunal was entitled to take into account acts done by employees of Mark & Spencer after the interview and to reach the decision that Marks & Spencer are not entitled to rely on the defence, because of the  deficiencies in dealing with Ms Martins' ad hoc complaint about the interview.
	We reject this construction of the subsection.  In our view, the act referred to in section 32(3) is the act of the employee alleged to constitute the less favourable treatment on racial grounds.  That act is the interview and the way it was conducted by Mrs Cherrie and Mr Walters, as employees of Marks & Spencer, on 28 January 1992.The refusal to offer Ms Martins employment  following on the alleged discriminatory treatment of Ms Martins in the interview was an act of the putative employer, not the act of an employee within the meaning of section 32(3). It is relevant for the purposes of section 32(3) to have regard to what was done by Marks & Spencer in advance of and prior to the interview to determine whether they had taken reasonably practicable steps to prevent discrimination by the employees in the interview, which inevitably led to the decision of Marks & Spencer not to offer employment to Ms Martins.It was not alleged in the proceedings that the treatment of Ms Martins' complaint by Mrs Tyzack (e.g.failure to conduct a thorough investigation of her complaint about the interview), after the refusal of a job offer,was an act of racial discrimination. In those circumstances there can be no doubt that Marks & Spencer made out the defence on the findings of fact about the effective arrangements made for the "special interview "to ensure that the members of the panel of trained interviewers had no knowledge of the reason for the interview; their equal opportunities policy; their compliance with the Code of Practice issued by the Commission for Racial Equality in relation to selection procedures,criteria and interviewing; and their selection of the interviewing panel to include Mr Walters as a person with an interest in recruiting from ethnic minorities.
	For all those reasons, we would dismiss this appeal and uphold the Employment Appeal Tribunal's decision to dismiss Ms Martins' complaint.
	Finally, we wish to add a few words of support to Regional Chairmen and Chairmen of Industrial Tribunals in handling cases of race discrimination and victimisation. 
	Our view coincides with that of the Employment Appeal Tribunal in two recent judgments given by the President, Mr Justice Morison.  We refer to Eke -v- Commissioners of Customs and Excise (EAT\1394\96- 21 November 1997) and Eurobell Holdings PLC -v- Barker (EAT\1293\96 -3 November 1997.)  In both cases the Employment Appeal Tribunal made the point that good judicial case management of proceedings by an Industrial tribunal is critical to a fair, orderly, just and efficient hearing. This court appreciates that this is easier said than done in situations where there are  pressing demands on the time of the chairmen for full hearings, where neither party is inclined to be co-operative and where more and more parties are unrepresented and inexperienced in preparing a case for hearing.
	In most cases of race discrimination it would be good practice to hold a meeting for preliminary directions, so as to ensure,as far as possible, that the parties and the tribunal identify the issues before the hearing of the case begins.  The Chairman can consider making directions, such as agreement on the issues falling for determination at the hearing and, if appropriate, the exchange of witness statements in advance of the hearing. It would also be important to obtain from the parties at that stage a reliable estimate of the likely length of the hearing.  The parties should be asked to justify that estimate by reference to the number of documents which the tribunal is likely to be asked to examine and the number of witnesses likely to be called to give evidence on the relevant issues.
	If that course is taken, it should be possible for the Regional Office to allot a realistic slot in the list to ensure an uninterrupted hearing of the whole case, without the damaging disruptions which have occurred in this and other cases. 

ORDER:	Appeal dismissed with costs, not to be enforced without the leave of the Court; leave to appeal to the House of Lords refused; legal aid taxation of the appellant's costs.