What is a secondment?

A secondment creates a relationship between an employer, the host and the employee. The employer is the party that originally employed the employee and temporarily transfers them to the third party. The host is the third party that employs the employee provided by the employer.

Secondments can be a useful way to enable career progression for employees to gain new skills and experience working in a different environment while meeting short-term staffing needs, such as maternity cover. Where turnover rate is low, secondment arrangements can be used to inject new ideas, skills and perspective into an organisation.

The Written Agreement

A secondment relationship exists between the employer and the host, which sets preconditions for the employment of the employee and obliges the employer to provide a capable employee. The employer must vouch for the employee's qualifications and readiness, but is not liable for the employee's poor workmanship. When drafting an agreement between the three parties, it is important to ensure that the below questions and points have been addressed and made clear:

• How long the secondment will last;
• The procedure if any party in the agreement wishes to end the secondment early;
• The employee’s specific contractual obligations during their secondment and who for;
• Who will be the “employer” during the secondment;
• What happens to the employee’s pay and other benefits during the secondment;
• Who is responsible for disciplinary and performance issues;
• What obligations the employer and host have to each other;
• The data protection arrangements to be put in place (i.e. does the host need to supply their privacy notice to the employee?);
• The procedures and supervisory arrangements to be adhered to during the secondment;
• Day-to-day line management for the employee (e.g. requesting holiday, reporting sickness absence, etc.);
• Traveling and subsistence expenses to be taken in account and how to claim this from the employer;
• Releasing the employee for any training that may be required for the employer, and who will cover the expenses of this; and
• Mechanisms put in place by the host to keep in touch with the employee during these periods of leave.

The employment contract which exists between the employer and the employee is governed by labour law regulations and dictates that the employer is nothing more than the employee's legal employer. A secondment does not terminate the employee’s contract of employment; the contract continues to subsist during the period of secondment, and a key principle of the arrangement is that the employee is expected to return to their substantive post when the secondment ends.

However, there is a risk that, by virtue of working for the host, the employee may become the host’s employee. This style of arrangement is similar to that of any agency worker working for an end user so it is, therefore, important to include terms in a secondment agreement to prevent that situation from arising.

Statements to the effect that the employee will remain employed by the employer at all times during the secondment, that there will be no interruption to the employee’s period of continuous employment, and the employee will return to work for the employer at the end of the agreed term, should therefore be included within the secondment agreement.

The consequence of this is that the employee shall remain employed on their original terms and conditions of employment with the employer throughout the duration of the secondment. This might mean that some minor amendments may be required to the employment contract to allow the secondment to take place, however these can be done relatively informally and should ideally be agreed in advance with the employee.

Despite the express terms of the secondment agreement, it is still possible for the host to be considered the employee’s employer if the classic tests for employment status are met. In order to reduce the chances of this the secondment agreement should also state that the employer retains overall control over the employee, that the host will only provide the minimum instruction and supervision necessary to allow the employee to perform their duties; and that the employee shall not become integrated into the host’s business.

Termination

The secondment agreement should specify a fixed duration for the secondment, and this will normally have been discussed between the employer and the host in advance. Ordinarily, the secondment agreement will terminate automatically on the stated end date.

It is important to include provisions stating how, and under what circumstances, the parties can bring the secondment to an end before then. Terms can be included to allow the secondment to be terminated on notice or with payment in lieu of notice. The secondment agreement should also specify the circumstances in which the secondment can be terminated summarily.

If the employee will use the host’s equipment and information during the secondment, it is sensible to include a clause in the secondment agreement requiring the return of the host’s property and permanent deletion of the host’s data from any personal devices used throughout the secondment.

If you are interested in secondment agreements and introducing this into your workplace, you can contact our Employment Team by emailing employment@warnegoodman.co.uk or calling 023 8071 7717.