Yarra Trams has suspended three employees after they hired strippers for the social club Christmas Party.

“Bad Santa” told 3AW Breakfast’s Rumour File the staff members involved in organising the strippers had been stood down, pending an investigation.

Yarra Trams confirmed on Wednesday it was looking into the matter after receiving two complaints.

It stressed the party was not sanctioned by Yarra Trams and was “unacceptable.”

“Action is being taken to prevent this happening again,” the company said in a statement.