Seconding Your Employees? You Need A Secondment Agreement (2026 Updated)

Secondments can be a smart way to move talent where it’s needed most - without permanently changing your team structure.

Maybe you’re lending a high performer to a client for a critical project. Maybe you’re moving someone temporarily to another entity in your group. Or maybe you’re bringing in specialist support from a partner business while you scale.

Whatever the reason, secondments create a unique “three-way” working arrangement (you, the employee, and the host). And that’s exactly why a handshake and a few emails usually aren’t enough.

A well-drafted secondment agreement helps you stay compliant, set expectations early, and reduce the risk of confusion around pay, supervision, confidentiality, liability, and what happens when the secondment ends.

If you’re considering this kind of arrangement, it’s also worth reading Secondments so you can map out the big picture before you lock in the paperwork.

What Is A Secondment (And Why Do Businesses Use Them)?

A secondment is usually a temporary arrangement where an employee of one business (the “home employer”) works for another business (the “host”) for a set period.

In most cases, the employee stays employed by the home employer, but their day-to-day work is directed by the host.

Businesses commonly use secondments to:

• Support a client engagement (for example, placing your staff member inside a client’s team to deliver a project)
• Fill a short-term resourcing gap (parental leave cover, peak periods, or skill shortages)
• Develop talent (giving employees experience in a different role, location, or function)
• Move people within a group (between related entities, subsidiaries, or associated businesses)
• Test a longer-term arrangement before making permanent changes

Secondments can be great for flexibility, but they also blur the lines of responsibility - especially around who gives directions, who is liable if something goes wrong, and who owns any work product created during the secondment.

That’s where a secondment agreement becomes essential. If you’re setting this up formally, a tailored Secondment Agreement is typically the document that ties the entire arrangement together.

Do You Really Need A Secondment Agreement?

In practice, if you’re seconding employees in a genuine business setting, having a secondment agreement is one of the simplest ways to prevent misunderstandings from turning into disputes.

Without a clear agreement, businesses often get stuck on questions like:

• Who pays the employee - the home employer or the host?
• Who approves leave, overtime, or timesheets?
• Who supervises performance and day-to-day conduct?
• What policies apply - the home employer’s, the host’s, or both?
• What happens if the host wants the employee removed from site?
• What happens if the employee gets injured at the host workplace?
• Who owns IP created during the secondment?
• Can the host hire the employee at the end of the secondment?

You can see the pattern: it’s not just about “where someone works”. It’s about allocating risk and responsibility in a way that’s fair, workable, and compliant.

A good secondment agreement also supports the legal foundation you already have in place, including your underlying Employment Contract and any workplace policies you rely on day-to-day.

Secondment Agreement vs Employment Contract: What’s The Difference?

Your employment contract sets the core relationship between you and your employee: pay, duties, confidentiality, termination, and other standard terms.

A secondment agreement usually sits alongside that employment contract and deals with the special “temporary host” arrangement - including how instructions will work, what the host can and can’t require, and how the secondment will end.

In other words: the employment contract is the foundation, and the secondment agreement is the tailored overlay that makes the secondment workable.

Key Legal Risks Secondments Can Create (If You Don’t Plan Properly)

Secondments often feel operational (“we just need help on this project”), but the risk areas are very legal - and they can get expensive if you don’t address them upfront.

1. Confusion About Who Controls The Employee

On a secondment, the host will often direct the employee’s day-to-day work. But the home employer usually still has the employment relationship.

If this isn’t clearly documented, you can end up with:

• contradictory instructions (home employer vs host)
• uncertainty about performance management
• disputes about whether an instruction was “lawful and reasonable”

2. Pay, Leave And Entitlements Misalignment

Even if the host reimburses you, you’ll want clarity on how payroll works in practice. For example:

• Will the employee remain on your payroll?
• Will the host approve timesheets, and you process payment?
• How will overtime be handled?
• Who approves annual leave and sick leave?

If you have award-covered employees or specific entitlements, you’ll also want to ensure the arrangement doesn’t accidentally create underpayment risk.

3. Work Health And Safety (WHS) Exposure

Secondments often involve the employee working at a host site, under host supervision, using host equipment.

This doesn’t automatically remove your WHS obligations as the employer. The host will also have WHS duties as the workplace controller.

Your agreement should clearly address safety responsibilities, site induction/training, incident reporting, and what happens if the employee is not safe to work on site.

4. Confidentiality, Data And Privacy Issues

Seconded employees may access the host’s confidential information (and potentially your confidential information while at the host).

That creates two risks at once:

• host confidentiality risk (your employee learns sensitive host information)
• home employer confidentiality risk (your employee shares or uses your confidential information at the host)

There can also be real privacy issues if the host is monitoring systems, devices, or communications. If you’re navigating workplace surveillance or access questions, it can help to understand the landscape around employee emails and internal communications.

Depending on the nature of the role, you may also want to align the secondment with your internal privacy and confidentiality rules (many businesses cover this in an Employee Privacy Handbook).

5. Intellectual Property (IP) Ownership

If your employee creates materials, processes, software, content, or documents during the secondment, who owns it?

Businesses often assume “the host owns it because it was created there” or “the home employer owns it because it’s our employee”. The safer approach is to decide and document it clearly.

This becomes even more important when the employee is contributing to a product build, internal system, brand work, sales collateral, or anything that could be reused later.

6. Host “Poaching” And Restraints

Secondments can be a pathway to recruitment. Sometimes that’s welcome (for example, a planned transfer). Sometimes it’s a problem (you’ve trained the employee, and the host uses the secondment to hire them away).

If this matters to you, your agreement can include a no-solicitation/no-poaching clause (with appropriate carve-outs if the parties agree that hiring may be allowed on certain conditions).

What Should A Secondment Agreement Include?

There isn’t a single “one size fits all” secondment agreement. The right terms depend on your business, the host, the role, the risks, and how long the secondment will run.

That said, in most Australian secondments, we’d expect the agreement to cover the following key areas.

Parties And Structure

• Who the parties are (home employer, host organisation, and sometimes the employee as a signatory)
• Relationship clarity (confirming the employee remains employed by the home employer unless agreed otherwise)
• No partnership/agency statements (to reduce unintended legal relationships between businesses)

Secondment Period And Role Details

• Start date and end date (or end trigger)
• Extension mechanism (how to extend, and whether it requires written agreement)
• Role, duties, and location (including remote/hybrid expectations if relevant)
• Reporting lines (who the employee reports to at the host)

Pay, Invoicing And Costs

• Who pays the employee (usually the home employer)
• Reimbursement terms (how the host reimburses salary, on-costs, super, workers’ compensation premiums, etc.)
• Expenses (travel, accommodation, tools/equipment, meals)
• Timesheets and approvals (who signs off on hours worked)

Workplace Policies And Conduct

This section helps prevent the “whose rules apply?” problem.

• Host policies (WHS, security, IT, code of conduct, anti-bullying/harassment)
• Home employer policies (confidentiality, conflicts, acceptable use, etc.)
• Priority and conflict rules (what happens if policies conflict)

Many businesses keep their core behavioural and compliance expectations in a Workplace Policy suite, and then “hook” the secondment into those rules with clear wording.

WHS And Incident Management

• Site induction and training obligations
• Who provides PPE/equipment
• Incident reporting process (timelines and points of contact)
• Right to remove from site if safety issues arise

Confidentiality And Privacy

• Mutual confidentiality obligations (protecting both the home employer’s and host’s confidential information)
• Information handling rules (what can be stored, where, and for how long)
• Return or deletion of information at the end of the secondment

Intellectual Property

• Who owns what is created during the secondment
• Assignment wording if IP is to transfer to the host
• Licence terms if IP is shared or reused

Liability And Indemnities

This is where businesses often want clarity on “who wears the risk” if things go wrong.

• Responsibility for loss/damage caused by the employee
• Insurance expectations (professional indemnity, public liability, workers’ compensation)
• Indemnities (carefully drafted so they’re reasonable and enforceable)

Ending The Secondment Early

A strong secondment agreement gives you an “exit ramp” without needing to terminate employment.

• Termination of secondment (notice required, immediate termination triggers)
• Employee return process (what role they return to, where they work, transition handover)
• Host removal rights (for conduct, performance, safety, or operational reasons)

It’s important to distinguish between ending the secondment and ending employment - they’re not the same thing, and your documents should reflect that.

How To Set Up A Secondment The “Low Drama” Way

Most secondment problems don’t happen because someone is acting in bad faith. They happen because everyone assumes they’re on the same page - until a pressure point hits (a safety incident, a performance issue, a dispute over overtime, or a messy end date).

Here’s a practical process that can reduce friction.

1. Confirm The Commercial Deal With The Host First

Before you involve the employee, align with the host on the core deal terms:

• what the host needs the employee to do
• where and how they will work
• the secondment period
• cost/reimbursement structure
• who supervises day-to-day work

If the host expects the employee to “slot in like an employee”, that’s fine - but it needs proper boundaries and documentation.

2. Check The Employee’s Existing Contract And Award/Agreement Position

Your employee’s current employment terms still matter during a secondment.

For example, you’ll want to check whether:

• their contract allows you to direct them to work at another site or for a host
• their duties will materially change (and whether that requires consultation)
• their hours or work patterns will change
• there are any award/enterprise agreement implications

If you need to update the underlying employment terms, it may be appropriate to update the employment contract (rather than forcing everything into the secondment document).

3. Prepare The Secondment Agreement (And Keep It Specific)

A common mistake is using vague wording like “the host will supervise the employee” without defining what that means in practice.

Be specific about supervision, policy compliance, leave approval, timesheets, confidentiality, and IP. Clear clauses now usually mean fewer disputes later.

4. Onboard The Employee Properly

Even if the employee is enthusiastic, treat the secondment like a formal change in working arrangements.

Make sure they understand:

• who they report to day-to-day
• how to raise HR concerns (and whether they go to you or the host first)
• what to do if there is a safety issue
• what systems they can use and what the monitoring rules are

5. Plan The End From Day One

Secondments often end in one of three ways:

• the project ends and the employee returns to their original role
• the secondment is extended
• the employee transfers permanently (sometimes to the host, sometimes to another entity)

Your secondment agreement should anticipate each scenario, even if you think it’s unlikely. This is one of the most effective ways to prevent a “what now?” scramble later.

Key Takeaways

• Secondments are temporary arrangements where your employee works with a host organisation, often under host day-to-day supervision while remaining employed by you.
• A secondment agreement helps clarify pay, supervision, policies, confidentiality, WHS responsibilities, and how the secondment ends.
• Key risk areas include WHS exposure, confusion over control and performance management, privacy and confidentiality issues, and intellectual property ownership.
• A secondment agreement usually sits alongside your employment contract, rather than replacing it, and should be tailored to the specific role and host arrangement.
• Planning the “exit” (return, extension, or transfer) from the start is one of the simplest ways to keep the secondment low drama and legally tidy.

If you’d like help putting a secondment arrangement in place, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.