For an employee (otherwise known as a secondee), it’s the opportunity work in a different office or environment, a different company, different city or even a different country. This may afford them a chance to develop their existing skills, acquire new skills or experience and advance their careers. For employers (otherwise termed as seconder), it can be a favour to an existing client or a means of attracting a prospective client, it could be part of the employer’s added value to service its clients or a mutual benefit to both the employer and the organisation to which the employee is to be seconded (otherwise known as the host). On the face of it, there are a lot of perks for both the employer and the employee. However, there are several practical issues that all parties - the seconder, secondee and host - need to consider before entering any secondment arrangement.

Selection of the Secondee

The first consideration is the selection of the secondee. It may be the case that the secondment opportunity arises out of a decision to second a particular individual. However, if the seconder or the host have simply reached an agreement that an employee (as opposed to a specific employee) will be seconded, a proper recruitment process should be carried out. This should include an internal advertisement, an application process and an objective form of selection, to reduce the risk of discrimination claims and/or a disgruntled workforce.

Employment Contract and Documenting Secondment

Having identified a secondee, the employer should consider the terms of the employee’s existing employment contract. In particular, the employer should consider whether the employment contract contains a contractual right to secondment. If there is no contractual right, the employer will need to get the employee’s consent to vary their employment contract in order for them to be seconded. Even where there is a contractual right to second an employee, it would nevertheless be prudent to get their employee’s consent to any secondment, which will help reduce the risk that the employee asserts that in being seconded they have been discriminated against or the seconder has breached the implied duty of mutual trust and confidence.

The parties should also document the terms of the secondment, not only between the seconder and secondee, but also the host. The employer should consider which clauses are necessary for the protection of their own interests, including, for example, indemnities or warranties in the case of any liabilities that arise during the secondment.

The seconder should also give thought to documenting the duration of the secondment, intellectual property rights, confidentiality obligations, and continuity of employment, salary arrangements for the secondee and whether there needs to be an embargo on direct employment by the host.

Who is the Employer?

The next step is to ensure that the agreement, whichever way documented, clearly sets out who the employer is whilst the employee is on secondment. The central basis of any secondment is that the seconder remains the secondee’s employer; the employee does not become employed by the host. However, whatever is agreed in the secondment agreement, it is important that the commercial reality reflects the terms of the agreement.

In order to demonstrate that the seconder remains the secondee’s employee, it is key that the mutuality of obligation is, and remains, between the seconder and secondee, rather than the host and secondee. In order to show this, the seconder should:

• remain in charge of the secondee and is responsible, as much as the circumstances allow, for the provision of the secondee’s day-to-day work and duties;
• remain in charge of any appraisals, and be responsible for any disciplinary or grievance investigations;
• seek to minimise the duties the secondee owes to the host organisation and, equally, the seconder should minimise the duties that the host owe the secondee;
• make it clear to the host that the secondee be clearly identified or marked as being a secondee as opposed to an employee of the host so that the secondee does not become integrated into the host’s organisation. Therefore, any staff list, for example, should clearly list the seconded employee as a secondee.

There is a real and potentially costly risk (to the seconder) that a secondee may become an employee of the host if the parties are not careful. See Fitton v v City of Edinburgh Council [2008] UKEATS/0010/07, where a secondee was held to be employed by the host during a secondment. In this case, the secondee had no expectation or intention that she would ever return to work with the seconder at the end of the secondment. In addition, she had no obligation to her original employer, she did no work for them, she did not consult with them for any guidance about her work – instead she raised all concerns with the host –, she booked her holidays through the host and whilst the seconder paid her salary, this was charged back in full to the host.

Whatever the parties agree on, for the reasons outlined in this article it is advisable to have in place a written agreement which covers all terms, obligations, and eventualities. In light of the various risks and considerations, a tripartite agreement is likely to be the most appealing and reassuring for all parties concerned.