Secondment Agreements – practical and legal considerations for employers
A secondment arrangement can be used when an employee or group of employees temporarily go to work for a different part of their employer's organisation, or another employer completely, such as a client or a customer. If done correctly, the arrangement can benefit both employer and employee.
A secondment can allow an employee to gain experience in a different area; provide temporary assistance to the host employer, or may enable an employer to avoid redundancies by temporarily seconding employees to a busier part of the organisation.
Secondment agreements should be properly agreed and documented as unanticipated costs and legal liabilities could occur if this is not done. All parties should be clear about the aims and objectives of the arrangement and how these will be achieved.
Before putting in place a secondment arrangement, the employer should review the terms of the potential secondee's employment contract as it is likely that changes will be required to the employees' terms and conditions. Some things to consider are; does the contract expressly entitle the employer to second the employee to work for another party? Are there any confidentiality clauses? What is the stated place or work and is there a mobility clause? Will there be any impact on hours of work? Are there policies and procedures of the host employer that the employee will be expected to follow? Will the employee be working exclusively for the host employer or for both the host and the original employer?
As the secondment agreement is likely to have the effect of changing or "varying" certain terms of the employment contract, the employee's agreement must be obtained before a secondment can commence. Failure to obtain the employee's consent may lead to a claim for breach of contract or even constructive dismissal.
A secondment agreement allows the employee to remain employed by the original employer during the secondment, with them returning to work for the original employer upon the termination of the secondment. Care must be taken when drafting a secondment agreement as the law imposes a number of liabilities on an employer, grants rights to an employee and despite the parties' intentions, there is a risk that the seconded employee could become the host's employee if the arrangement is not handled appropriately. Each agreement should be tailored to the specific secondment, the circumstances surrounding the secondment in question and any specific needs of the organisation relevant at the time.
To minimise the risk of the employee being found to have become the host's employee, parties to the agreement will need to ensure that the original employer retains overall control and, where possible day to day control of the employee. If the employee needs to take day-to-day instruction from the host, this should be kept to the minimum necessary to complete their duties. Any disciplinary or grievance matters should be dealt with by the original employer, in addition to any appraisals or pay reviews. Any requests for annual leave should be made to the original employer, who may discuss it with the host.
The use of a secondment agreement will be vital in determining the nature and extent of responsibilities between the parties to the agreement. It will be relied upon should any dispute arise although how the arrangement is operating in practice will be equally important.