Secondment Agreements In NZ: Staff Sharing Checklist

Mia runs a growing marketing agency in Wellington. One of her best account managers has spare capacity for three months, while a friendly software company down the road needs help launching a product. Sharing that employee sounds practical - but Mia quickly realises there are a lot of questions under the surface.

Who pays the employee? Who approves leave? What happens if something goes wrong at the host company's workplace? Can the host give directions directly, or does everything need to go through Mia?

Secondments can be a smart way to support another business, retain good staff and make better use of your team's skills. They just need clear terms, because a casual handshake can leave both businesses unsure about pay, control, confidentiality and health and safety duties.

What Is A Secondment Agreement?

A secondment agreement is a written agreement that sets out how an employee of one business will temporarily work for another business while usually staying employed by their original employer.

In most secondments, there are three parties involved:

• The home employer: your business, if the employee remains on your payroll and under your employment agreement.
• The host business: the business receiving the employee's services for the secondment period.
• The employee: the person temporarily working with the host business.

A secondment is different from hiring a contractor under a contractor agreement. The employee usually remains your employee, and their existing employment rights continue under the Employment Relations Act 2000, the Holidays Act 2003 and other employment laws.

It's also different from simply referring work to another business. In a secondment, the host often gives day-to-day instructions, uses the employee's skills and may integrate them into its team for a period of time.

The agreement can be two-party, between the home employer and host, with the employee signing a separate consent or variation. Often, the cleaner approach is a three-party agreement, so everyone signs the same document and understands the same rules.

Can You Share Staff Between Businesses In New Zealand?

Yes, you can share staff between businesses in New Zealand, but you need the employee's agreement if the secondment changes their role, location, reporting line, hours or other employment terms.

You can't usually make a meaningful change to an employee's role just because it suits your business. The Employment Relations Act 2000 requires you to act in good faith, and your employment agreement will also matter.

Before the secondment starts, check:

• whether the current employment agreement allows temporary assignments or work at other locations
• whether the employee's duties will change
• whether their place of work will change
• whether their hours, pay, allowances or benefits will change
• whether they will report to someone at the host business
• whether they will handle new confidential information or customer data

If the secondment affects any of those points, it's safest to record the employee's consent in writing. That may be through a secondment agreement, a letter of variation or both.

The employee should also know that the arrangement is temporary. If the arrangement has no clear end date, or if the host starts treating the person like its own employee, the legal position can become messy.

Example: A Practical Staff Sharing Arrangement

Say you run a small bookkeeping business in Christchurch. Your payroll specialist, Ana, has capacity for two days a week. A client needs payroll support for three months while its HR manager is on leave.

A secondment could work well if you set out:

• Ana stays employed by your bookkeeping business
• the client pays your business a monthly secondment fee
• Ana works for the client on Tuesdays and Thursdays
• the client can direct Ana on payroll tasks, but can't change her pay or discipline her
• you remain responsible for payroll, leave balances and employment records
• both businesses have health and safety duties while Ana is working at the client's workplace

That level of clarity helps everyone get the benefit of the arrangement without blurring the basics.

Who Pays The Employee During A Secondment?

The home employer usually pays the employee during a secondment, then invoices the host business for the agreed cost or fee.

This keeps the employment relationship clear. The employee remains on your payroll, you continue making deductions and contributions where relevant, and you keep employment records as usual.

Your secondment agreement should spell out the financial arrangement between the businesses, including:

• the secondment fee or reimbursement amount
• whether the fee covers salary, wages, KiwiSaver employer contributions, ACC levies, leave costs, bonuses, tools, equipment and overheads
• whether GST applies to your invoice, if your business is GST registered
• when invoices are issued and when payment is due
• what happens if the secondment ends early
• whether the host covers travel, accommodation or work-related expenses

From the employee's perspective, pay should remain at least at the level required by their employment agreement and New Zealand minimum employment standards. The adult minimum wage can change each year, commonly from 1 April, so check the current Employment New Zealand rate if pay is close to minimum wage.

Leave entitlements also continue. Under the Holidays Act 2003, employees are entitled to four weeks' annual holidays after 12 months' continuous employment, and eligible employees are entitled to sick leave and bereavement leave. The secondment agreement should say how leave requests are handled, because the host may need to plan around the employee's availability even though you're the employer approving leave.

Who Controls The Work And Manages Performance?

The host business can usually control day-to-day work during the secondment, but the home employer should keep control of the employment relationship itself.

This split is one of the main reasons a written agreement matters. If the host business gives all instructions, approves leave, manages performance, changes duties and decides whether the person stays or goes, it may start looking less like a temporary secondment and more like direct employment or labour hire.

A sensible agreement will usually say:

• the host can give reasonable day-to-day directions about tasks, priorities and workplace procedures
• the home employer remains responsible for pay, employment records and formal employment decisions
• the host must promptly tell the home employer about performance concerns, misconduct concerns or safety issues
• the host can't dismiss, suspend, formally warn or vary the employee's terms
• both businesses will cooperate if a concern needs to be managed

New Zealand's triangular employment rules under the Employment Relations Act 2000 can also be relevant. In some labour hire or secondment-style arrangements, a third party that controls or directs the employee's work may be treated as a controlling third party for certain employment law purposes.

That doesn't mean every host business becomes the employer. It does mean the host's conduct can matter, especially if it has real control over the employee's work. If the host will heavily supervise the employee, handle complaints or direct sensitive work, get tailored advice on how to structure the arrangement.

Employee or contractor status may also be relevant under the Employment Relations Amendment Act 2026 changes if you're tempted to call the person a contractor instead of seconding an employee. The contractor gateway test is aimed at genuine contractor arrangements. It won't be a safe shortcut if the person is already your employee and the arrangement works like employment in practice.

What Health And Safety Duties Apply When Staff Are Shared?

Both businesses can have health and safety duties when an employee is seconded, especially where the host controls the workplace or the work being done.

Under the Health and Safety at Work Act 2015, a PCBU must take reasonably practicable steps to protect workers' health and safety. A worker can include an employee, contractor or other person carrying out work for a business.

For a secondment, this usually means the home employer and host need to consult, cooperate and coordinate with each other. You shouldn't assume the host takes over all health and safety duties just because the employee is working at the host's site.

Your agreement should cover:

• who provides workplace induction and site-specific safety training
• what training the employee needs before starting
• who supplies personal protective equipment, tools and systems access
• how hazards and incidents will be reported
• who the employee contacts if they feel unsafe
• what insurance arrangements each business has in place
• whether the work involves driving, manual handling, machinery, client visits or remote work

For office-based secondments, this might be simple. For construction, manufacturing, healthcare, transport or any higher-risk environment, you'll want much more detail before the employee starts.

Health and safety is also about mental wellbeing. If the employee will be working under a host manager, dealing with customers or working different hours, make sure the host understands your expectations around respectful conduct, fatigue, workloads and reporting concerns early.

What Should Your Secondment Agreement Include?

Your secondment agreement should include the practical rules for the arrangement, not just a sentence saying one business can use another business's employee.

Templates often miss the details that matter most in a real secondment, especially where the host will manage daily work or the employee will access confidential systems. The document works best when it's tailored to your business, the employee's role and the host's environment.

Core Commercial Terms

• the names and NZBNs of the businesses, where available
• the employee's name and current role
• the start date and end date of the secondment
• whether it can be extended, and how that extension must be agreed
• the secondment fee, reimbursement model and invoicing process
• who pays expenses and what needs pre-approval
• the notice period for ending the secondment early

There's no single statutory notice period for ending a secondment early. Use a period that makes commercial sense and works with the employee's employment agreement. For many SMEs, 2 to 4 weeks may be practical, but urgent safety, misconduct or business continuity issues may need a different process.

Employment And Management Terms

• confirmation that the employee remains employed by the home employer
• the employee's duties during the secondment
• where and when the employee will work
• who gives day-to-day directions
• who approves leave, overtime and expenses
• how performance feedback is shared
• what happens if the employee is sick or unavailable
• how employment records will be kept

Confidentiality, IP And Data

• confidentiality obligations for both businesses and the employee
• rules for accessing the host's systems, customer lists, approved AI tools and trade secrets
• who owns work product, reports, designs, code, content or inventions created during the secondment
• whether IP is assigned or licensed between the businesses
• how personal information will be handled under the Privacy Act 2020
• what happens to documents, devices and access permissions when the secondment ends

IP can be easy to overlook. In New Zealand, copyright created by an employee in the course of employment will often belong to the employer, but that may not automatically give the host business the rights it expects. If the host needs to use deliverables after the secondment, put the ownership or licence position in writing.

Privacy also needs a practical plan. If you're sharing employee information with the host, only share what the host genuinely needs, tell the employee what is being shared, and make sure the host keeps it secure. The same goes for any customer or supplier information the employee handles during the secondment.

Common Mistakes To Avoid

A few common mistakes can turn a useful staff sharing arrangement into an avoidable headache.

Relying On A Handshake

A verbal agreement might feel easier at the start, especially where the businesses know each other well. The problem is that secondments involve too many moving parts: pay, leave, control, confidentiality, IP, safety and ending the arrangement.

Without written terms, you may struggle to recover unpaid invoices, manage performance concerns or work out who was responsible for a workplace issue.

Forgetting The Employee's Consent

If the secondment changes the employee's role or working conditions, get their agreement in writing before it starts. This keeps the process transparent and reduces the risk of confusion later.

Letting The Host Act Like The Employer

The host needs enough control to manage the work, but not so much that the employment relationship becomes unclear. Make sure the host knows what it can and can't do.

Ignoring Confidentiality And IP

Seconded employees often see sensitive information from both businesses. Use clear confidentiality, system access and IP clauses so everyone knows what can be used, shared and kept after the secondment ends.

Leaving Health And Safety Until Day One

Safety should be sorted before the employee starts. Induction, training, equipment, incident reporting and supervision should all be clear from the beginning.

Key Takeaways

• A secondment can be a practical way to share staff, but the employee usually remains employed by the home employer.
• Get the employee's written consent if the secondment changes their role, hours, location, duties or reporting line.
• Your agreement should clearly split pay, invoicing, control, leave, performance management and early termination rules.
• Both businesses may have health and safety duties under the Health and Safety at Work Act 2015.
• Confidentiality, IP ownership and Privacy Act 2020 obligations matter whenever the employee accesses systems, data or client information.
• If the host will heavily direct the employee, consider triangular employment and contractor status risks before the arrangement starts.

If you'd like help with your secondment agreement, employee consent documents, confidentiality terms or staff sharing arrangements, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.