How to Create a Secondment Policy

A secondment can solve a real business problem fast. You might need a specialist in another part of the group, want to support a client project, or need temporary cover without making a permanent hire. But businesses often get secondments wrong in the same predictable ways: they rely on a short email instead of clear paperwork, they assume the original employment agreement covers everything, or they forget to deal with supervision, health and safety, confidentiality, and who is actually paying for what.

Those mistakes can turn a practical staffing arrangement into an employment dispute, a privacy issue, or a messy argument between two businesses. This guide explains how to create a secondment policy for New Zealand businesses, what clauses should appear in a secondment agreement, what legal risks sit behind the arrangement, and what good process looks like before you sign.

Overview

A secondment policy sets the rules your business will use when an employee is temporarily placed with another team, related entity, client, or host organisation. It works best when it sits alongside tailored secondment documents for each placement, rather than trying to replace them.

A practical policy and agreement should cover both the employment relationship and the commercial relationship behind the arrangement.

• Who remains the legal employer during the secondment
• Whether the secondment is internal, group-based, or to an external host
• The start date, end date, review points, and any right to end the arrangement early
• Who directs day-to-day work and who handles performance concerns
• How salary, leave, bonuses, expenses, and other costs will be paid or recharged
• What confidentiality, privacy, intellectual property, and conflict rules apply
• Which party is responsible for health and safety obligations at the host site
• How the employee returns to their original role, or what happens if that role changes
• What consultation or employee consent is required before any change takes effect

What This Means For Your Business

A secondment policy gives your business a consistent framework, but it does not remove the need for employee consent and proper documents. In New Zealand, the legal starting point is still the employment relationship and any applicable employment agreement.

In simple terms, a secondment usually means an employee remains employed by one business but works temporarily for another part of the business, an associated company, or an external organisation. The arrangement may be full-time or part-time, short-term or project-based.

For many founders and managers, the key question is not whether a secondment is possible. The real question is how to structure it without accidentally changing employment terms, creating uncertainty about control, or exposing the business to confidentiality and safety risks.

Why a policy matters

A written policy helps managers treat secondments consistently. That matters when different teams are arranging temporary placements quickly and informally.

Your policy can set out when secondment is appropriate, who approves it, what documents are required, and what minimum protections must be in place before an employee moves. It can also explain the difference between:

• an internal transfer within the same employer
• a temporary secondment to a related company
• a secondment to a client or external host
• a contractor arrangement, which is a different legal relationship altogether

This distinction matters because businesses sometimes call an arrangement a secondment when it is really a permanent transfer, a labour hire arrangement, or a contractor engagement. Labels do not decide the legal position. The actual terms and day-to-day reality do.

What a secondment policy should do

A good secondment policy should answer the practical questions managers ask before they promise anything to an employee or host business. That includes approval pathways, minimum contract requirements, and the process for managing issues during the placement.

Most New Zealand businesses should use the policy to cover:

• eligibility criteria for secondments
• the requirement for written employee agreement before terms change
• who prepares the employee letter or variation
• when a separate host agreement is required
• how remuneration and cost recovery will work
• reporting lines, performance management, and disciplinary escalation
• privacy and information-sharing rules
• health and safety responsibilities
• the return process at the end of the placement

Policy versus agreement

This is where businesses often get caught. A policy is an internal framework. It is not usually enough on its own.

You will generally also need:

• a letter of secondment or employment variation with the employee
• a commercial agreement between the original employer and the host organisation, if the host is a separate entity
• supporting documents dealing with confidential information, data access, or specific project requirements where needed

If the employee's role, reporting line, location, hours, or duties are changing, you should not rely on a verbal promise or an internal HR note. Get the arrangement documented before the secondment starts.

Key clauses to include

The right clauses depend on your structure, but most secondment arrangements should deal with the points below in plain language.

• Parties: identify the employer, the employee, and the host organisation
• Purpose: explain why the secondment is happening and what role the employee will perform
• Term: specify the start date, expected end date, extension process, and any trial or review points
• Employment status: confirm whether the original employer remains the legal employer throughout
• Duties and supervision: set out who gives day-to-day instructions and what authority the host has
• Pay and benefits: clarify salary, allowances, leave, KiwiSaver-related administration if relevant, bonuses, and reimbursement of expenses
• Costs between businesses: state whether the host reimburses wages, overheads, travel, accommodation, training costs, or equipment
• Policies: identify which workplace policies apply at the host site, including conduct, security, and health and safety rules
• Confidentiality and privacy: control how business information and personal information are accessed, used, stored, and returned
• Intellectual property: say who owns work product created during the secondment
• Conflicts of interest: require disclosure of competing duties, side projects, or divided loyalties
• Health and safety: allocate responsibilities for induction, site hazards, incident reporting, and worker consultation
• Performance and conduct: explain how concerns are raised, who investigates, and what role the legal employer keeps
• Return arrangements: confirm the intended role or process on return, if known
• Early termination: allow the secondment to end if business needs change or issues arise

For external secondments, the commercial agreement should also address liability clauses, insurance obligations, non-solicitation where appropriate, and dispute management between the two organisations.

Legal Issues To Check Before You Sign

The main legal issue is whether your documents match the reality of the arrangement. Before you sign, make sure the secondment does not quietly change core employment terms without proper consultation and agreement.

Employee consent and employment variations

An employer cannot usually impose a material change to an employee's role, location, hours, or reporting lines just because a secondment would suit the business. If the secondment changes contractual terms, the employee should agree in writing.

That does not mean every temporary project needs a full new employment agreement. But where there is a meaningful change, a clear written variation or secondment letter is the safer approach.

Check the employee's existing agreement for clauses dealing with:

• mobility or transfer between sites or group entities
• changes to duties
• temporary assignments
• confidential information and intellectual property
• notice and termination rights

Even if broad flexibility wording exists, use it carefully. New Zealand employment law still expects good faith, fair process, and genuine communication where changes affect the employee.

Who is the employer during the secondment

You should state this expressly. If your business remains the legal employer, the documents should say so.

This matters for wages, leave administration, disciplinary process, record-keeping, and dealing with any employment dispute. It also matters if the host wants authority over conduct issues. The host can supervise day-to-day work, but the employer often still needs to manage formal employment steps.

Where secondments happen within a corporate group, people often assume the distinction does not matter. It does. Separate entities should not rely on informal group practice when the employee is legally employed by only one company.

Health and safety at the host workplace

If the employee is working at another site, do not leave health and safety to assumption. The host usually controls the workplace hazards, while the employer still has duties connected to its workers.

Your documents should identify who is responsible for:

• site induction and training
• equipment and protective gear
• supervision on site
• incident reporting and investigation
• consultation if risks change during the secondment

Where both organisations have responsibilities, spell out the handover points. This is especially important for manufacturing, construction, logistics, healthcare, and technical field roles.

Confidentiality, privacy, and data access

A seconded employee may gain access to two sets of sensitive information at once. That creates obvious confidentiality and privacy risks.

You need to decide what the employee can access, what can be shared between businesses, and what must remain ring-fenced. If the host will provide system access or handle employee information, the arrangement should address privacy obligations and information security expectations, ideally in line with your privacy policy, in practical terms.

This is a common pressure point where businesses move fast and paperwork comes later. Before you give system logins or customer data access, make sure the documents deal with:

• permitted use of data
• limits on copying, downloading, and disclosure
• return or deletion of information at the end of the secondment
• notification if a privacy incident or security breach occurs

Intellectual property and ownership of work product

If the employee creates documents, software, designs, training materials, or process improvements during the secondment, who owns that work? Do not assume the answer is obvious.

For example, a software developer seconded to a client project could create code while still employed by the original business. Without clear drafting, ownership and usage rights can become contentious. The same applies to product design, process manuals, or sales material created during a temporary placement.

Cost allocation and reimbursement

Commercial arguments often start after the secondment begins, not before. The host may expect one charging model, while the employer assumes another.

Before you sign, agree on:

• salary recharge arrangements
• leave costs during the secondment period
• bonuses or incentive payments
• travel, accommodation, meals, and vehicle costs
• training and compliance costs
• equipment, licences, and software access

If tax treatment or invoicing structures are relevant, get accounting advice as well as legal input.

End of secondment and return to role

The cleanest secondment is one where everyone knows what happens at the end. If there is no clear return plan, disappointment and conflict are much more likely.

Your documents should deal with whether the employee returns to their original position, a comparable role, or a role to be confirmed closer to the end date. If the original position may no longer exist, avoid vague promises. State the process honestly and carefully.

Also include a right to end the secondment early. A host project may finish sooner than expected, the employee may not be the right fit, or business priorities may change.

Common Mistakes With How to Create a Secondment Policy

The most common mistake is treating a secondment like an informal favour between managers. If the arrangement changes where someone works, who supervises them, or what information they can access, informal emails are not enough.

Using one generic template for every scenario

An internal secondment within the same company is not the same as a placement with a client or related entity. The risk profile changes depending on who controls the workplace, who owns the output, and whether confidential information moves across entity lines.

A policy can be standardised. The individual documents usually need tailoring.

Forgetting the employee experience

Secondments are often sold as development opportunities, but legal trouble starts when the employee is unclear about expectations. They may think the move is a stepping stone to a permanent promotion, while the business sees it as temporary cover.

Avoid soft promises. If there is no guaranteed permanent role at the end, say that clearly. If the role may involve travel, irregular hours, or working under a host's policies, say that before the employee agrees.

Letting the host manage discipline without boundaries

The host may be best placed to raise issues quickly, but formal employment action should not drift into an unauthorised process. If the legal employer stays the same, the employer usually needs to retain control over disciplinary steps and major employment decisions.

Your documents should define the host's role in:

• day-to-day supervision
• reporting poor performance
• escalating misconduct concerns
• suspending access or removing the worker from site if needed for safety or security reasons

Ignoring confidentiality conflicts

This is especially risky where the host is a customer, supplier, investor, or joint venture partner. A seconded employee can be exposed to strategic information that creates conflicts for the original employer.

Think carefully about ring-fencing, project limitations, and whether the employee should be excluded from particular meetings, files, or commercial discussions.

Not documenting extension or early exit rules

Many secondments are extended informally because the arrangement seems to be working. That is where outdated terms cause trouble.

If the placement continues beyond the original term, review the documents. An extension may change cost-sharing, reporting lines, leave planning, and the practical return path.

Assuming group companies can sort it out later

Businesses within the same ownership structure often rely on trust instead of paperwork. That can work until there is a performance issue, an injury, a confidentiality breach, or a disagreement about who bears the cost.

Group entities should still document the secondment properly. Separate companies have separate legal responsibilities, even when the management team overlaps.

FAQs

Does a secondment policy replace a secondment agreement?

No. A policy sets internal rules, but a specific secondment usually still needs written terms with the employee and, if relevant, a separate agreement with the host organisation.

Can an employer require an employee to go on secondment?

Not automatically. If the arrangement changes contractual terms in a meaningful way, the business should consult and obtain written agreement rather than relying on assumption or pressure.

Who pays the employee during a secondment?

That depends on the documents. Often the original employer continues payroll and recharges the host, but the parties can agree another lawful structure if it is clearly documented.

Who is responsible for health and safety?

Usually both businesses may have responsibilities, but the host often controls the physical workplace and day-to-day hazards. The documents should clearly allocate induction, supervision, reporting, and incident management duties.

What happens when the secondment ends?

The documents should say whether the employee returns to their original role, moves to a comparable role, or follows a stated review process. Clear end-of-term wording helps avoid disputes and unrealistic expectations.

Key Takeaways

• A secondment policy should create a clear internal process, but it should not replace tailored documents for each placement.
• Before you sign, confirm who remains the legal employer, what changes the employee is agreeing to, and how supervision will work in practice.
• Strong secondment documents usually cover term, duties, pay, reimbursement, confidentiality, privacy, intellectual property, health and safety, and return arrangements.
• The biggest risks come from informal arrangements, unclear control over the worker, poor handling of confidential information, and no agreed exit path.
• Group company secondments still need proper paperwork, even where everyone knows each other and the arrangement feels temporary.
• Clear communication with the employee matters just as much as the legal drafting, especially around expectations, reporting lines, and what happens at the end.

If you want help with employee secondment terms, host organisation agreements, confidentiality protections, and return-to-role clauses, you can reach us on 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.