EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
OPINION OF THE COURT
delivered by LORD HAMILTON
APPEAL TO COURT OF SESSION
under section 37(1) of the employment tribunals Act 1991
MR. KULDIP DHESI
GLASGOW CITY COUNCIL,
Act: Napier, Q.C.; Thompsons (Appellant)
Alt: Truscott, Q.C.; MacRoberts (Respondent)
1 December 2005
 The appellant is a United Kingdom citizen of Indian origin. From 1994 onwards he held various posts, first with the respondent's predecessor and later with the respondent. In August 2000 he applied for the post of Assistant Project Manager of an arrangement under which the respondent had undertaken to the Home Office to provide services, including accommodation, to asylum seekers. The appellant's application was unsuccessful, the successful candidate being a Ms. McDonald. Subsequently the appellant complained to an employment tribunal that, in a number of respects, he had been unlawfully discriminated against, contrary to the Race Relations Act 1976. The only complaint which is now in issue is whether the respondent had discriminated against the appellant within the meaning of section 1(1)(a) of the Act ("direct discrimination"). The employment tribunal, by a determination dated 2 and issued on 4 February 2004, sustained that complaint and awarded certain compensation to the appellant; but the Employment Appeal Tribunal reversed that determination. The appellant has now with leave appealed to this court.
 Of the candidates who were interviewed for the post of Assistant Project Manager, Ms. McDonald had an advantage over all the others: she had for some time been interim team leader of a project which the respondent had earlier set up to deal on an interim basis with the accommodation of asylum seekers in Glasgow. Before the employment tribunal the respondent contended, among other contentions, that Ms. McDonald was not, by reason of that experience as well as other factors, a valid comparator with the appellant for the purpose of determining whether the appellant had been less favourably treated. The employment tribunal, having addressed the evidence and made various findings in fact, concluded as the first stage of its decision-making process that "the treatment meted out to [the appellant] was not equal to that meted out to [Ms. McDonald]".
 It is apparent from that conclusion and from the reasoning which preceded it that the tribunal took the view that in the circumstances of this case a valid comparison could, for the purposes of determining whether or not there had been less favourable treatment, be made between the appellant and Ms. McDonald. In its grounds of appeal to the Employment Appeal Tribunal the respondent did not maintain that the employment tribunal had erred in law in treating Ms. McDonald as a valid comparator; rather, it acknowledged that that approach was legitimate, although contending that the tribunal had "at the 'reason why' stage, erred in failing to analyse the reasons for the difference in treatment given to Ms. McDonald and the appellant." That contention was advanced under a ground of appeal headed "Too high an evidential burden imposed on the appellant". The Employment Appeal Tribunal considered the issue before it to be "in narrow compass", namely, whether the employment tribunal was in the circumstances entitled to draw an inference of racial discrimination; having taken a certain view of an observation by Burton J. presiding in the Employment Appeal Tribunal in University of Huddersfield v Wolff  IRLR 534, the Employment Appeal Tribunal in the present case held that the employment tribunal was not entitled to draw that inference.
 In the course of the hearing of the appeal to this court Mr. Truscott sought to introduce grounds of appeal by the respondent, including grounds which raised the issue whether the employment tribunal had erred in law in its approach to the question of less favourable treatment, in particular in proceeding on the basis that Ms. McDonald was an appropriate comparator with the appellant. For reasons which it is unnecessary to go into, we refused to allow these grounds to be received. In these circumstances the issue for determination is whether, as the Employment Appeal Tribunal held, the employment tribunal was not entitled to draw an inference of racial discrimination; put more precisely, it is whether the employment tribunal, having found that the respondent had treated the appellant less favourably than it treated or would treat other persons, was entitled to find that that treatment was on racial grounds.
 As this is a case to which section 54A of the 1976 Act applies, the guidance provided by the Court of Appeal in Igen Limited v Wong  EWCA Civ. 142;  ICR 931 is, as parties before us accepted, in point. As Peter Gibson L.J. (delivering the judgment of the court) observed at para. 17, the relative statutory amendment requires the employment tribunal to go through a two-stage process if the complaint is to be upheld. He continued:
"The first stage requires the complainant to prove facts from which the tribunal could, apart from the section, conclude in the absence of an adequate explanation that the respondent has committed, or is to be treated as having committed, the unlawful act of discrimination against the complainant. The second stage, which only comes into effect if the complainant has proved those facts, requires the respondent to prove that he did not commit or is not to be treated as having committed the unlawful act, if the complaint is not to be upheld".
At para. 18 the court stated that it was clear that the statutory amendment (made against the background of the Race Directive (Council Directive 2000/43/EC) altered the pre-existing position established by the case law relating to direct discrimination. Consequently, some alteration to the guidelines provided by Neill L.J. in King v The Great Britain-China Centre  IRLR 513 was needed. At the end of its judgment the Court of Appeal set out in an annex its reformulation of certain guidelines earlier given by the Employment Appeal Tribunal in Barton v Investec Securities Ltd.  ICR 1205 (a sex discrimination case). These guidelines apply mutatis mutandis to race discrimination cases.
 In the present case the employment tribunal, making its determination before the guidance in Igen Limited v Wong was available, held, in effect that the "first stage", as described by Peter Gibson L.J. at para. 17, had been satisfied. It also held, in effect, that in respect of the second stage, the respondent had not proved that it had not committed the unlawful act complained of. The tribunal went on to observe that, even in the absence of section 54A, it would have found in favour of the appellant.
 In the course of his submissions to us Mr. Truscott conceded that, subject to the issue of a valid comparison between the appellant and Ms. McDonald, the employment tribunal had been entitled, on the facts found by it, to conclude that the less favourable treatment held to have been given to the appellant had been on racial grounds. In these circumstances it is unnecessary to enter in detail upon the bases on which that conclusion was arrived at. Suffice it to say that it proceeded on a consideration of the manner in which the respondent had treated the candidatures of the appellant and of Ms. McDonald respectively, including among other factors the "talking up" of Ms. McDonald by the chairman of the interview panel, certain defects in Ms. McDonald's performance being ignored and certain defects in the appellant's performance being exaggerated, all combined with consideration of the explanations given by the respondent's witnesses for their conduct and findings to the effect that such explanations as were given did not, in the tribunal's judgment, point to a non-racial reason for the difference in treatment.
 Once it is accepted, as it now must be accepted, that the employment tribunal was entitled to treat Ms. McDonald as a valid comparator for the purposes of its determination as to whether there had or had not been less favourable treatment, the issue becomes a narrow one. The respondent had before the employment tribunal contended, as its primary position, that it had acted properly and fairly throughout. The tribunal, on the basis of findings of fact which are not challengeable, rejected that contention. The respondent's secondary position, as noted in the tribunal's extended reasons, was that "the facts were equally consistent with a degree of favouritism having been shown to the successful candidate". We are not persuaded that, as Mr. Truscott contended, the tribunal misunderstood the respondent's secondary position and, in particular, what was intended by the reference to "favouritism". Having regard to the way the respondent presented its primary case (namely, that the selection had not proceeded on the basis of any predetermined preference for a candidate with a particular attribute, such as knowledge of property management, in which Ms. McDonald excelled) and in the absence of evidence pointing positively to "favouritism", it is unsurprising that the tribunal was not persuaded that a racial reason for the discrimination was excluded.
 It is, in our view, clear that even if there was on the evidence an alternative tenable reason for the less favourable treatment given to the appellant, the tribunal, on the basis of the primary facts found by it, could conclude that that treatment was on racial grounds. That being so, and the respondent having failed to negative that reason, the appellant was bound to succeed.
 The Employment Appeal Tribunal took the view that there was "effectively a void in the evidence beyond the fact that there was unfair treatment and that the now respondent was Indian". We are unable to agree with that view. The evidence and the findings were to the effect not only that there had been unfair treatment (and that there was a difference of race) but that there had been no explanation for that treatment pointing convincingly to a non-racial reason for it. A finding of unexplained unreasonable conduct may be such as to allow inferences to be drawn satisfying the first stage (Igen Limited v Wong, at para. 51). That being so, the appellant in this case proved sufficient facts to satisfy that stage.
 In the whole circumstances we shall allow this appeal, restore the determination of the employment tribunal and remit to it to proceed as accords.