How to ensure a successful secondment
04 October 2019
There are three types of secondment, all of which involve the employee being temporarily reassigned; (1) secondment to an alternate part of their current organisation, (2) secondment to work for a different employer within the same group of companies, or (3) secondment to a different employer altogether (such as a client or business partner).
The main advantages for employers of employee secondment, asides perhaps from business necessity for internal or inter-group secondments, are that they are an effective way to develop good business relationships by sharing and enhancing the employees’ skills and experience. For the employee, a successful secondment can not only provide a career development opportunity, but offer the employee the chance to gain new experiences and contacts (which could ultimately prove to be beneficial to their original employer when/if they return).
As with all employee-related issues, there is the possibility for complications to arise when dealing with secondments, particularly where the employee is seconded to a different employer outside of the group. There are a number of steps that employers can take to protect themselves, whether they are the employee’s original employer or the host employer.
1. Have a written secondment agreement.
It is essential that the terms between the parties (i.e. the employee, their original employer and the host employer) are recorded in writing so that the terms of the secondment are clear to all parties and this will help to address the potential complications and disputes that can arise.
Employees may agree new terms and conditions to reflect the secondment arrangement. Original and host employers in a secondment arrangement also need to agree the practical arrangements around how salary and benefits will be paid and granted, and how costs will be met and reimbursed.
The host employer will want to include terms that confirm that the secondee must follow its day-to-day instructions and comply with its policies, (for example around data protection and code of conduct). As the secondee is likely to remain the employee of the original employer while on secondment, the secondee will continue to owe the usual duties employees owe to their employer (such as the duty to obey reasonable instructions). As the host employer is not the employer to whom the secondee owes these duties, and in order for the secondment to be a success, the host employer therefore needs to include these provisions in the agreement.
2. Ensure that the original employer retains control over the employment relationship.
A traditional secondment involves the original employer loaning the secondee to the host, but the employment itself does not transfer to the host employer. This way, the employee’s continuous service is preserved, the original employer retains control over the employment relationship and the secondee remains bound by common law duties and obligations, such as the duty of fidelity, to the original employer. However, in rare cases, the employment relationship is deemed to transfer to the host, possibly because the original employer has surrendered control over the secondee. The practical arrangements should reflect that the secondee remains employed by the original employer, but the secondment agreement should also include a clause making this clear to avoid any dispute.
3. Agree the procedures for dealing with absence, appraisals, discipline and grievances.
Original and host employers should agree in advance how they will deal with different kinds of absence, and make clear to the secondee his or her obligations in this respect.
The original employer should retain direct control of the secondee, which includes managing appraisals and disciplinary and grievance procedures, however this may present practical challenges so the original employer is likely to require input from the host. The original employer should make sure that there is a clause in the agreement that makes clear the host’s obligations in this regard.
4. Protect your confidential information and intellectual property.
Seconded employees will almost certainly have access to both the host and original employers’ confidential information, so both employers may have concerns about disclosures to the other. Host employers should seek to retain intellectual property rights developed during the course of a secondment. The secondment agreement should therefore also include clauses protecting both the original and host employer’s interests.
5. Ending the secondment.
The secondment agreement should make clear how and when the secondment arrangement will end and ensure that the secondee’s position is clear from the outset – including whether the employee is guaranteed their original job back at the end of the secondment. If it is made clear to the employee at the outset that there is no guarantee of a job at the end of the secondment, and he/she accepts it anyway, so long as the original employer follows a fair procedure, the risk of the employee being able to bring a successful unfair dismissal claim is minimised.
If you would like any further advice regarding secondments, please contact the Employment team.
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Solicitor Emma O’Meara