As an employer, you may require your employees to move to different areas or departments within your business. You might even need them to transfer to a completely external business (whether associated with yours or not). Similarly, you may require temporary help from skilled workers outside of your business to fill a shortage of resources or cover an employee’s extended period of leave. The temporary assignment or provision of workers between departments and businesses is known as a secondment. While a secondment has many benefits, including better resourcing and exposure to new or unique skill sets, they are not always easy to navigate. Importantly, there are several practical and legal considerations for employees under a secondment arrangement.
This article will outline the benefits of seconding employees within your business and highlight the legal and practical matters to note. Specifically, it will deal with mitigating risk through a well-drafted secondment agreement and management of employees on secondment.
What are the Benefits of a Secondment Arrangement?
Sourcing talent and hiring new employees in the current economic climate may not always be feasible for your business. For this reason, and with recent movements towards remote work and the expansion of global markets, secondments have become more relevant and popular than ever.
There are several benefits to internal and external secondment arrangements, including:
- better resource and talent management;
- the ability to utilise unique or skilled workers for a particular period of time or project;
- the ability to expose your employees to new opportunities and areas within your business or externally; and
- networking and partnership opportunities.
How Can I Protect my Employees on External Secondment?
The best way to protect employees temporarily seconding to another business is by entering into a well-drafted secondment agreement with the partner business. This agreement should detail the following critical factors of the arrangement:
- liability for payment;
- term;
- expectations; and
- obligations.
A failure to enter into an agreement may leave your employees on external secondment vulnerable and put your business at risk when engaging external workers. A lawyer can assist you with drafting or reviewing a secondment agreement which deals with the following key issues:
- the employee’s duties and responsibilities;
- management of the employee;
- the hours and place of work;
- secondment fees and payment terms; and
- protection of business interests like confidentiality and intellectual property.
Practical Considerations when Managing Employees on Secondment
A particularly difficult issue to navigate is how to manage work for employees on secondment. Each business to the arrangement will likely have its own workplace policies, procedures and expectations. For this reason, there must be clear terms in the secondment agreement about the expectations of the employee and which party will maintain directive control over the employee’s work. Usually, this will be the business receiving or ‘hosting’ the secondee. The business will also have work health and safety obligations in relation to the secondee.
A further consideration for an employee on secondment is the accrual and taking of statutory leave entitlements, like annual leave and sick leave. The secondment agreement should outline the commercial agreement reached regarding leave. However, the typical arrangement is that the employee’s legal employer is responsible for tracking and paying the employee’s leave entitlements. Importantly, the host employer should be adequately notified of any planned or unexpected leave, in accordance with their policies.
Whether it’s your first hire or your fiftieth, this guide will help you understand the moving parts behind building a high-performing team.
Key Takeaways
When your business requires temporary help to fill a shortage of resources, you might consider entering into a secondment contract. Secondment refers to the temporary assignment or provision of workers between departments and businesses. This arrangement has many benefits, including better resourcing and exposure to new or unique skill sets. A secondment contract will govern the working relationship.
If you need assistance navigating internal and external secondments or reviewing a secondment agreement, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
An internal secondment is an arrangement for an employee to temporarily transfer to an area or department within your business. An external secondment is an arrangement where your employees are transferred to an external business for a period of time, or where your business takes on an employee from another business. External secondments should be facilitated through a secondment agreement.
The best way to protect your business interests, including confidential information, is by entering into a well-drafted secondment agreement with the other business involved in the secondment. You should ensure that each party’s obligations are clearly set out, including not making unauthorised disclosures of confidential information.
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