Secondments can be a win-win: your employee gets development opportunities, your business strengthens relationships with clients or partners, and the host organisation gets skilled support without going through a full recruitment process.
But secondments can also get messy fast if nobody has clearly agreed (in writing) who the employee reports to, who pays them, who handles leave, and what happens if something goes wrong.
This guide is updated to reflect current expectations and common risk areas we’re seeing in New Zealand workplaces, especially where secondments involve remote work, access to sensitive information, and shared supervision.
Below, we’ll walk you through what a secondment is, when you should use a secondment agreement, what clauses matter most, and the common traps to avoid.
What Is A Secondment (And When Does It Make Sense)?
A secondment is when you temporarily place your employee to work for another part of your business (for example, a different branch or subsidiary) or for an external organisation (like a client, partner, or industry body).
The key word is temporary. A secondment usually has:
- a defined start date and end date (or at least a clear review date);
- a specific purpose (project work, covering parental leave, seasonal spikes, skills development, etc.); and
- an expectation the employee will return to their original role (or a comparable one) afterwards.
In practice, secondments are common in:
- corporate groups (moving staff between parent and subsidiary companies);
- professional services (staff seconded to a client site);
- government and NGOs (policy, advisory, and project secondments); and
- startups (seconding a specialist into a partner’s business for a defined build or rollout).
Secondments can be structured in a few ways, but the big legal question is always the same: who is the employer during the secondment, and what obligations sit with each party?
Secondment Vs Contractor Arrangement
A secondment is not the same as “sending someone over as a contractor”. If the person is your employee, they remain an employee unless there’s a genuine change in employment arrangement.
If you try to treat a secondment like a contractor arrangement (for example, the host directs the work, but the paperwork is vague), you can end up with disputes about:
- who is responsible for health and safety;
- who must follow a fair process if there are performance issues;
- who handles personal grievances; and
- who is liable if confidential information is misused.
The whole point of a secondment agreement is to prevent those “wait, whose job is that?” moments.
Do I Really Need A Secondment Agreement?
If your employee is being seconded, you should have a secondment agreement in place before the secondment starts (or at the very least, before the employee begins work for the host).
Even when everyone is on good terms, assumptions can differ. For example:
- Your business thinks the host will supervise day-to-day work, but the host thinks you’ll do it.
- The employee thinks they can work from home two days a week, but the host expects full-time on-site.
- The host expects the employee to work overtime to meet deadlines, but your business hasn’t approved overtime.
A properly drafted secondment agreement helps align the employer (you), the host organisation, and the employee on the practical and legal rules of the arrangement.
How A Secondment Agreement Fits With An Employment Contract
Usually, the employee’s underlying Employment Contract stays in place, and the secondment agreement sits “on top” to deal with secondment-specific terms.
That matters because employment obligations don’t disappear just because your employee is doing work elsewhere. In most cases, you still need to:
- pay wages correctly and on time (even if you’re later reimbursed by the host);
- act as a fair and reasonable employer;
- follow proper processes for discipline, performance management, and termination; and
- make sure the work arrangement is safe and lawful.
It can be tempting to use a generic “letter” or template for secondments, but this is one of those areas where small drafting gaps create big real-world problems.
What Should A Secondment Agreement Cover?
There’s no one-size-fits-all secondment agreement. The right clauses depend on the parties, the role, the risk profile, and whether the secondment is internal (within a corporate group) or external (to a separate organisation).
That said, most secondment agreements should cover the following clearly.
1) Who The Parties Are (And Who The Employer Is)
A secondment often involves three parties:
- you (the employer);
- the host (the organisation receiving the employee’s services); and
- the employee.
The agreement should state whether it’s:
- a tripartite agreement signed by all three parties; or
- a set of documents (for example, an agreement between employer and host, plus a variation letter agreed with the employee).
It should also state explicitly whether the employee remains employed by you, and that the secondment is temporary.
2) Secondment Term, Review Dates, And Ending The Secondment Early
A strong secondment agreement sets out:
- start date and end date (or the event that ends it);
- any extension process;
- a review checkpoint (for example, at 4 weeks or 3 months); and
- how to terminate the secondment early (notice periods, handover obligations, and return-to-work arrangements).
This is especially important where a project changes scope or funding changes. Without a clear early exit mechanism, the secondment can become awkward or risky to unwind.
3) Role Description, Duties, And Reporting Lines
You want to avoid the “two bosses” problem.
The agreement should identify:
- the employee’s secondment position title;
- what the employee is (and isn’t) expected to do;
- who supervises day-to-day work at the host; and
- who the employee escalates issues to (host manager vs employer manager).
It can also help to confirm whether the employee can accept direction from the host’s staff, and what happens if host direction conflicts with your instructions.
4) Pay, Invoicing, And Other Costs
This is where misunderstandings are common.
A secondment agreement should spell out:
- who pays salary and when;
- whether the host reimburses the employer (and how, and on what schedule);
- who covers expenses like travel, accommodation, parking, and equipment;
- whether overtime can be worked and who must approve it; and
- any additional allowances (for example, a travel allowance).
Even if reimbursement is agreed informally, it’s worth putting the mechanics in writing. If accounts teams change or budgets get tight, you don’t want to be stuck arguing about what was “understood”.
5) Leave, Public Holidays, And Day-To-Day Workplace Policies
It’s not always obvious which policies apply during a secondment.
Your agreement should confirm:
- who approves annual leave and sick leave;
- how leave is recorded and communicated;
- which workplace policies apply (your policies, the host’s, or both); and
- expected work hours, breaks, remote work arrangements, and timesheets.
Where your employee will be subject to host site rules (for example, safety protocols, IT use rules, or confidentiality rules), you should make that explicit.
Secondments often involve your employee accessing systems, customer information, pricing, product roadmaps, or commercially sensitive documents.
Your secondment agreement should deal with:
- what information is confidential;
- how the employee must handle host confidential information;
- how the host must handle your confidential information (if relevant);
- security requirements (device use, passwords, access controls); and
- what happens when the secondment ends (returning devices, deleting data, removing access).
If personal information will be handled, it’s also important to think about your privacy compliance obligations under the Privacy Act 2020, and whether the host’s processes align with yours. In many businesses, a clear Privacy Policy is part of the broader compliance picture (even if the secondment agreement is the core document).
7) Conflicts Of Interest And Outside Work
Secondments can create blurred boundaries, especially if the host is in the same industry, or if your employee will be working with your competitors or suppliers.
Consider including:
- a requirement to disclose conflicts of interest;
- limits on using your business’s relationships for the host’s benefit (and vice versa); and
- rules around outside work, side hustles, or consultancy while on secondment.
It can also be helpful to align this with an internal Conflict Of Interest Policy, so expectations are consistent across your team.
8) Intellectual Property (IP): Who Owns What?
If your employee is creating anything (documents, designs, code, training materials, marketing assets, process improvements), you should be clear about IP ownership.
Common approaches include:
- Host owns IP created for the host during the secondment (common for client secondments);
- Employer owns IP created by its employee, with a licence to the host (common where the secondment is part of a broader service relationship); or
- Split ownership depending on the type of material (riskier unless defined very carefully).
IP issues tend to show up later, when the secondment has finished and everyone suddenly cares about who can reuse the work. If IP is likely to be valuable, it’s worth getting tailored advice and documenting it properly (sometimes alongside an IP Assignment or licence arrangement).
9) Liability, Indemnities, And Insurance
Secondments create real-world risk. For example:
- the employee causes loss to the host (mistakes, negligence, client complaint);
- the employee is injured on the host’s site;
- the employee breaches confidentiality; or
- the employee faces bullying/harassment in the host workplace.
The agreement should clearly allocate responsibility between employer and host, including:
- who is responsible for day-to-day supervision and safe systems of work;
- who handles complaints and investigations;
- indemnity clauses (where appropriate); and
- what insurances each party must maintain.
These clauses need to be drafted carefully. They should be practical and fair, and they should align with how the secondment will actually run.
Health And Safety During A Secondment: Who Is Responsible?
In New Zealand, health and safety duties are taken seriously, and a secondment doesn’t remove those obligations.
Under the Health and Safety at Work Act 2015 (HSWA), organisations that influence or direct work have duties to ensure, so far as is reasonably practicable, health and safety.
In a secondment, both the employer and host can have responsibilities, depending on the setup and who controls the work environment.
Practical Steps To Manage HSWA Risk
A secondment agreement should support what happens in the real world. Some practical risk controls include:
- confirming who provides the workplace induction and safety training;
- confirming who provides PPE (if required);
- setting out incident reporting requirements (who must be notified and how quickly);
- confirming who investigates incidents and who keeps records; and
- clarifying whether the employee can refuse unsafe work and how that’s handled.
If the secondment involves working from home or working across multiple sites, it’s also worth clarifying who provides equipment, what “safe work” means in a home environment, and how hazards are identified and managed.
Done well, this isn’t just about compliance. It’s about making sure your employee feels safe and supported while they’re working under a different organisation’s direction.
Common Secondment Mistakes (And How To Avoid Them)
Secondments often start with good intentions, but a few patterns regularly cause headaches for NZ businesses.
1) Treating The Secondment Like A Handshake Deal
If the arrangement is informal, expectations drift. The host might gradually expand the scope of work, or the employee might be asked to take on responsibilities that don’t align with their skills or job description.
Solution: document the scope, reporting line, and boundaries from the start, and build in a review point.
2) Unclear Employment Processes
If the host has concerns about performance, do they “manage” the employee directly? Do they send them back? Do you start a performance process? Who investigates misconduct if it happens on the host site?
Solution: clearly set out which party handles performance management and disciplinary steps, and require the host to provide information and cooperate.
Where the host wants the ability to direct removal from site immediately (for example, due to serious misconduct), your agreement should still support a fair overall process and specify what happens next.
3) Not Aligning On Confidentiality And Data Handling
Your employee might have access to the host’s data, and the host might have access to your employee (and your business) information. Without clear rules, you can end up with privacy complaints or commercial disputes.
Solution: build confidentiality and data security into the agreement, and ensure practical steps are taken (access control, secure devices, return of materials).
4) IP Ownership Being Left To Assumptions
If your employee builds a tool, creates training materials, or writes code during the secondment, both parties may later claim ownership.
Solution: deal with IP ownership upfront, and make sure it lines up with the commercial purpose of the secondment.
5) Forgetting The “Return” Plan
Secondments can fail when an employee returns and discovers their role has changed, their team has moved on, or expectations aren’t aligned.
Solution: include a return-to-role clause and plan the reintegration early (including any training, handover, and expectation-setting).
If you’re seconding employees between related entities, it can also be worth reviewing the overall governance and decision-making structure (for example, if the entities operate under different boards or shareholders). Depending on your setup, documents like a Company Constitution or Shareholders Agreement can affect authority and approvals when staff are moved across the group.
Key Takeaways
- A secondment is a temporary arrangement where your employee works for another part of your business or an external host organisation, usually for a defined project or purpose.
- A secondment agreement helps prevent misunderstandings about supervision, pay, leave, working hours, and what happens if the secondment needs to end early.
- Your employee’s underlying Employment Contract usually remains in place, meaning you still have ongoing employer obligations and should document secondment-specific changes properly.
- A good secondment agreement should cover the term, duties, reporting lines, reimbursement mechanics, applicable workplace policies, confidentiality, privacy, and IP ownership.
- Health and safety responsibilities under the Health and Safety at Work Act 2015 can apply to both the employer and host, so it’s important to set out practical safety processes clearly.
- Common secondment risks include unclear performance management processes, vague confidentiality rules, and assumptions around who owns work product created during the secondment.
If you’d like help putting a secondment arrangement in place (or reviewing one before you sign), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
