Secondment of an employee
What is meant by ‘secondment’?
The term ‘secondment’ describes where an employee or a group of employees is assigned on a temporary basis to work for another, ‘host’ organisation, or a different part of their employer’s organisation. On expiry of the secondment term, the employee (the ‘secondee’) will ‘return’ to their original employer.
Why might a secondment take place?
There are many reasons why it may be considered desirable for a secondment to occur, including:
- The career development of a particular individual
- The chance for an individual to gain some new skills or gain some experience
- Providing staff with the chance to work on short term projects
- Providing potential cover for short term absences
- Avoiding redundancies
- Enabling the employee to remain with the original employer, thus preserving specific benefits such as pension schemes
- If the secondment is external, various legal issues will arise which will need to be covered in a detailed secondment agreement.
Can a secondment be internal as well as external?
An employee who works in a large organisation may be seconded to another section of that organisation. An internal secondment can be done much more informally and a fully detailed secondment agreement is unlikely to be required. The only specific issues which will need to be defined in an internal secondment will be the duties of the employee on secondment, their manager, their place of work, and wages and any additional costs/expenses.
Should there be an agreement in place?
Ideally, on an external secondment, the secondee’s existing employment contract should be reviewed, and a written agreement covering the secondment terms drawn up. This will set out the agreed changes to the secondee’s employment and may be signed by all three parties.
On an external secondment, who will be the employer?
In an external secondment, the individual will usually remain the employee of the primary employer during the term of the secondment. However, in some cases the secondee may technically become an employee of the host employer, even if that is not what is intended. Care must be taken in relation to clarifying the rights and duties flowing between the secondee, and the primary employer and the host employer because of the potential legal implications.
Why is this important?
There are important legal implications because of the rights of an employee, and the liabilities of an employer in relation to the employee. It is vital that the parties understand who, for the purposes of the law, is the secondee’s employer during the secondment term.
To minimise the risk that the secondee does not become an employee of the host employer, the primary employee should ensure that:
- The seconded employee does not owe any duties directly to the host employer (only to the primary employer)
- The host employer does not owe any duties to the seconded employee
- The primary employer retains day-to-day control of the seconded employee
- The primary employer carries out any appraisals and disciplinary/grievance procedures
As a host employer, how do I ensure a secondee does not become fully integrated into my organisation?
To ensure a seconded employee remains an employee of the primary employer, it is important that they do not become fully integrated into a host employer’s organisation. For instance, where there are any mentions of a secondee’s name on communications, staff lists, etc, it should be clear the individual is a secondee and not an employee of the host organisation.
What will happen to an employee’s continuity of employment if they are seconded elsewhere?
Many employment rights, such as the right against unfair dismissal and unlawful discrimination, require ‘continuity of employment’ with their original employer. This means an employee’s statutory period of continuous employment remains unbroken throughout any secondment. The secondee will therefore wish to preserve their employment rights to ensure their continuity of employment is maintained, even if circumstances arise such that the continuity is broken. Ideally, this will be covered in the secondment agreement.
Who will pay the secondee?
During a secondment situation, the original employer will typically continue to pay the secondee’s wages, together with any connected expenses and costs. However, there may be some costs incurred by the host employer, and it should be clear who is liable for any additional costs of both the secondee and the host employer.