Desk Extension And Secondment Agreements: What Australian Businesses Need To Know

Thinking about growing your team or offering flexible staffing, but not sure how “desk extension” or secondment actually works in Australia? You’re in the right place.

These arrangements can help you boost capacity quickly, access specialist skills, and collaborate with partner businesses without jumping straight into permanent hires. The key is getting the legal framework right from day one so the relationship runs smoothly and stays compliant.

In this guide, we’ll unpack what desk extension and secondment mean, how they differ, the main legal issues to consider in Australia (including labour hire licensing, Fair Work and privacy), and the core agreements and policies you should put in place before you start.

What Is A Desk Extension Vs Secondment?

A desk extension arrangement is where your business contracts with another business to “borrow” one of their employees for a set time (full-time or part-time). The individual stays employed by their original employer (the supplier), but does work for you as the host. You usually pay the supplier a daily or hourly rate, and you direct the day-to-day work within an agreed scope.

Secondment is closely related. It generally involves a more formal placement of an employee into a host business for a defined period. The original employer typically remains responsible for HR and payroll, while the host manages the person’s day-to-day activities and deliverables during the placement.

In practice, both models aim to give the host temporary access to capability while the original employer retains the employment relationship. The exact structure will depend on your goals, the length of the engagement, and how integrated the person will be in the host’s team and systems.

Why Use These Arrangements? Benefits And When They Work Best

Businesses use desk extension and secondments for a range of commercial reasons, including:

• Flexibility: Add capacity quickly for a busy period, pilot a new service, or deliver a project with unusual skill requirements.
• Cost control: Avoid the cost and time of recruiting and onboarding permanent employees for short-term needs.
• Capability lift: Bring in specialist expertise (e.g. cyber, data, engineering, creative) to support your team or transfer knowledge.
• Partnerships: Strengthen collaboration with a trusted supplier or allied firm through shared delivery.
• Career development: For the original employer, a secondment can be a meaningful staff development opportunity.

These benefits are compelling - but they only hold if the legal, safety and privacy settings are clear and documented. The rest of this guide focuses on setting up that foundation.

How To Set Up A Compliant Desk Extension Or Secondment

1) Define The Scope And Objectives

Start with clarity. What skills do you need, how many hours per week, and for how long? Will the person work onsite, remotely, or hybrid? Agree on key deliverables, confidentiality expectations, working hours and reporting lines. The clearer your scope, the less room for misunderstandings later.

2) Confirm Who Employs Whom (On Paper And In Practice)

In most desk extension/secondments, the original employer remains the legal employer. They continue to handle payroll, leave, PAYG and super. The host directs day-to-day tasks within the agreed scope. Your written agreement should reflect this division of responsibilities and make it clear who is doing what (e.g. scheduling, performance feedback, work health and safety onboarding, tools and equipment, supervision).

3) Choose The Right Contract Structure

Put the arrangement in writing. Many businesses use a tailored secondment or desk extension contract, sometimes alongside a broader Service Agreement if deliverables go beyond people supply. Ensure the contract covers duration, pricing and invoicing, confidentiality and IP, privacy and data security, WHS duties, dispute resolution and termination.

4) Check Licensing And Registration Requirements Early

Depending on the structure and location, desk extension/secondment can fall within “on-hire” or labour hire frameworks. In some states and territories (including Victoria, Queensland and the ACT), you may need a labour hire licence to supply workers to another business, or you may only work with suppliers who hold one. Licensing rules can be nuanced, so confirm what applies in your state or territory before you start.

At a business level, make sure your registrations are current - for example an ABN and, if relevant, your company details or business name. If you’re weighing up structures, this quick explainer on business name vs company name can help you understand the difference.

5) Onboard For Safety, Systems And Data

Create a simple onboarding checklist for hosts and secondees, covering WHS induction, access cards, cybersecurity, device use, confidentiality, conflicts of interest, and how to raise issues. The aim is to set expectations from day one, especially where the person will access customer systems or personal information.

6) Plan The Exit

Set a clear end date, extension option, handover expectations, and what happens if either party needs to wind down early. Decide whether the host can offer ongoing employment at the end (and whether a fee or waiting period applies).

Key Legal Issues In Australia

Employment Law And Minimum Standards

Even while on placement, the individual’s minimum entitlements under the Fair Work framework continue to apply (e.g. base rates, leave, overtime/penalty rates where relevant, and workplace protections). If the host is setting rosters or directing work patterns, they should keep an eye on hours, overtime and break requirements to avoid exposing the original employer to non‑compliance.

Where the host will step in as the employer at the end of the arrangement, plan ahead with a suitable Employment Contract and a clean handover to avoid overlap of entitlements or misunderstandings about accrued leave.

Who Is “The Employer” In Australian Law?

Australian law focuses on the substance of the relationship. In most desk extension/secondment arrangements the original employer remains the employer of record. However, the host still owes duties (for example, WHS) and can be exposed to accessorial liability under the Fair Work Act if they are knowingly involved in breaches (for instance, directions that cause underpayments). Avoid blurring lines by documenting who controls what, and sticking to it in practice.

Labour Hire And On‑Hire Licensing

Some states and territories regulate the supply of workers (on-hire) with labour hire licensing schemes. The details vary by jurisdiction, but in broad terms:

• If you’re supplying your employees to perform work in another business, you may need a licence in that state/territory.
• If you’re the host, you may be prohibited from engaging an unlicensed provider where a scheme applies.
• Schemes exist in several jurisdictions (including Victoria, Queensland and the ACT), and others may refine or introduce rules over time. Always check current obligations with your state/territory regulator.

These laws are separate from standard recruitment or consulting services and can still apply even where the original employer handles payroll and HR. Build a quick licensing check into your due diligence process before you sign.

Work Health And Safety (WHS)

Both the original employer and the host have WHS duties to provide a safe workplace and manage risks so far as is reasonably practicable. Under the harmonised WHS laws, PCBUs (persons conducting a business or undertaking) must consult, cooperate and coordinate where duties overlap. Practical steps include:

• WHS induction at the host site (or remote-work risk assessment if working from home).
• Clear reporting lines for hazards, incidents and near misses.
• Fit-for-purpose equipment, training and supervision (especially for higher-risk work).

If you want a quick refresher on your general safety obligations, this overview of a business’ duty of care is a helpful starting point.

Privacy, Data And Cybersecurity

If a secondee or desk-extended worker will access personal information (customer records, employee files, logs, etc.), privacy compliance must be front and centre. In Australia, the Privacy Act and the Australian Privacy Principles (APPs) apply to most businesses with annual turnover above $3 million, and to some smaller businesses (for example, health service providers or those that trade in personal information) regardless of turnover.

At a minimum, set expectations in writing about data access, permitted use, security controls, retention and deletion at the end of the engagement. Where personal information is collected or used, publish and maintain an up‑to‑date Privacy Policy that reflects your practices, and consider a data handling schedule in the services/secondment contract for additional safeguards.

Confidentiality And Intellectual Property (IP)

People on secondment often see sensitive information or create new materials for the host (documents, code, designs, processes). Protect both sides by including:

• Robust confidentiality obligations that survive termination.
• Clear IP rules - for example, assigning new IP created for the host, while preserving each party’s pre‑existing IP.
• Return and deletion obligations for information and devices at the end.

Where substantial or novel IP is likely to be created, add an IP assignment clause or a separate deed for certainty. For earlier conversations, use a Non-Disclosure Agreement before sharing sensitive details.

Insurance And Liability

Don’t assume existing insurance automatically covers secondments. Confirm which policy responds to personal injury, professional indemnity, public liability and cyber incidents while the individual is working for the host. Some policies require you to notify the insurer or add the host as an interested party. Align the contract with your insurance positions (for example, indemnities and liability caps) so there are no gaps.

Tax, Invoicing And Payroll

Generally, the original employer continues to run payroll (PAYG withholding, super) for the individual. The host pays the supplier an agreed fee (which is usually subject to GST). If you’re the host, confirm what’s included in the rate (e.g. overtime, leave cover, travel) and how time will be tracked and invoiced. As always, get tailored tax advice for your structure and transactions if you’re unsure.

Non‑Solicitation And Future Hiring

It’s common to address whether the host can hire the individual at the end of the placement. You can agree reasonable non‑solicitation terms, a cooling‑off period, or a success fee for conversions. If you do move to direct hire, transition the person onto your own Employment Contract and ensure entitlements and service are handled correctly.

What Contracts And Policies Should You Put In Place?

You don’t need a mountain of paperwork - just the right documents, tailored to how you’ll work together. Most businesses will use a combination of the following:

• Desk Extension/Secondment Agreement: Covers the placement scope, duties, duration, pricing, supervision, privacy, WHS, insurances, IP/confidentiality, dispute resolution and exit.
• Service Agreement: Useful if the relationship also involves deliverables beyond the person’s time (e.g. defined project outcomes, service levels or milestones).
• Non‑Disclosure Agreement: For early discussions and ongoing protection of sensitive information shared between the parties.
• IP And Works Clause/Deed: If new IP will be created, include a clear assignment in the main contract or add a standalone IP assignment for certainty of ownership.
• Privacy Policy & Data Handling Schedule: Explain how personal information is collected and used, and set rules for access, security and deletion at the end of the engagement.
• Host Policies And Inductions: Provide key policies to the secondee (for example a Workplace Policy pack covering WHS, bullying/harassment, cybersecurity, device use and social media).
• Future Hiring Documents: If a conversion is on the cards, get your template Employment Contract ready so you can transition seamlessly at the end of the placement.

If you’re at the stage of deciding on your broader structure, it’s also worth revisiting the difference between a business name vs company name to check that your overall setup aligns with your growth plans.

Common Pitfalls And Practical Tips

• Missing labour hire checks: If a licensing scheme applies and you’re unlicensed (or you engage an unlicensed supplier), penalties can be significant. Add a simple licence check to your onboarding checklist and keep evidence on file.
• Blurry lines on control: If the host effectively takes over as the employer, you increase the risk of mixed obligations and accessorial liability. Keep the documented split of responsibilities tight and monitor it in practice.
• Under‑baked privacy and security: Seconded staff often need broad systems access. Limit access to what’s necessary, implement MFA, log access, and include prompt off‑boarding steps (revoking access, returning devices, data deletion).
• WHS gaps for remote work: If the individual works from home, address ergonomic risks, hours of work, and incident reporting in your policies and onboarding.
• Unclear IP ownership: If the arrangement involves building products, software or creative content, specify who owns what (and when), including background IP and improvements.
• No plan for ending early: Projects change. Include practical termination rights (with notice), handover obligations, and a path for replacing the resource if needed.
• Policies not shared: If the secondee never sees your key policies, it’s harder to manage conduct and compliance. Share core documents as part of onboarding and keep them accessible.

Key Takeaways

• Desk extension and secondment let you access extra talent quickly while the original employer usually retains payroll and HR responsibilities.
• Where these arrangements amount to “on‑hire”, labour hire licensing in some jurisdictions (including VIC, QLD and the ACT) may apply - check before you start.
• Both the original employer and the host have WHS duties, and the host should keep an eye on working hours and conditions to help maintain Fair Work compliance.
• Lock down confidentiality, IP ownership, and data handling in writing, and keep a current Privacy Policy if personal information is involved.
• The right documents - a tailored secondment/desk extension contract, a Service Agreement where needed, a Non‑Disclosure Agreement, and clear workplace policies - reduce risk and set expectations.
• Plan the exit from day one, including what happens if you want to hire the person directly at the end of the placement.

If you would like a consultation on setting up a desk extension or secondment arrangement for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.