A counter-offer over pay and title sank his permanent role - and his dismissal claim
A contractor at global architecture firm Grimshaw thought a permanent role was his. It wasn't - and the Fair Work Commission has explained exactly why.
In a decision handed down on May 28, 2026, Deputy President Boyce dismissed a general protections claim brought by architect Rafat Barakat against Grimshaw Architects, finding Barakat was never the firm's employee and so could not have been dismissed by it.
The case is a clean, useful read for any HR team that manages labour hire workers or converts contractors to permanent staff.
Barakat was supplied to Grimshaw by recruitment agency Bespoke Careers, which the firm has used for more than 20 years. He began his Sydney assignment on March 31, 2025. The structure was a standard three-way labour hire arrangement: Bespoke employed him, then on-hired him to Grimshaw.
In late July 2025, Grimshaw raised the idea of a permanent full-time role. Barakat said yes to a verbal offer on July 30. But no terms had been discussed - not even salary. Grimshaw then sent him a written employment contract.
Rather than sign, Barakat emailed back on August 14 to renegotiate. In that email he asked for formal recognition, and possible compensation, for introducing what he described as a potential client; a higher salary, proposing $130K plus superannuation against what he described as an offered $120K plus superannuation; overtime pay or time in lieu; and a more senior title. He also asked to remove a disclosure clause.
Grimshaw declined the changes, then withdrew the offer altogether. Barakat continued as a contractor through Bespoke until his assignment ended on August 29, 2025. He then filed a claim arguing he had been dismissed.
The Commission rejected the claim on two grounds.
First, no contract ever formed. Barakat's verbal "yes" came before any essential terms were agreed, and the written contract was the only offer open for acceptance - one that needed his signature. By emailing back to change salary and other core terms, he made a counter-offer instead of accepting. Grimshaw was entitled to withdraw the offer before acceptance, and the Commission found that "no contract between the Applicant and the Respondent (of any kind) ever came into existence."
Second, the "practical reality" argument failed. Barakat said that in substance he was always Grimshaw's employee - onboarded by the firm, using its IT systems, reporting to its managers, sitting in its meetings, working only for it. The Commission applied section 15AA of the Fair Work Act, which looks to the "real substance, practical reality and true nature" of a relationship, not just the documents. It found those factors were simply what a labour hire placement involves. A labour hire employee, the decision said, "does not, by some form of osmosis or happenstance, become an employee of the client."
With no employment relationship, there was no dismissal - and no jurisdiction. The application was dismissed.
The takeaways for HR are concrete. A verbal "yes" to an offer with no agreed terms creates nothing binding. When a candidate answers a written offer by trying to change essential terms like pay or title, that is a counter-offer, and the original offer can be lawfully pulled. And the routine work of integrating a labour hire worker - onboarding, system access, supervision, team meetings - does not, by itself, convert them into your employee. The contracts, and how they actually operate, still decide it.
