A secondment is a temporary arrangement in which an employee steps out of their usual role, often called the home role, to work in a different role, team or organisation for a defined period. The employee usually remains employed by their original employer and is expected to return at the end of the assignment.
Secondments are attractive to businesses because they solve a timing problem. A project needs specialist help for six months, a role needs covering while someone is on parental leave, or a high performer needs a stretch assignment before stepping into a leadership position. The appeal is flexibility: the business gets capability without a permanent hire, and the employee gets experience that comes back to the business. This guide explains how secondments actually operate in Australia, who owes what to whom, and the obligations that attach even though the employee is only temporarily working elsewhere. Most of the legal risk sits in three places: award compliance, work health and safety, and labour hire licensing.
Who is involved in a secondment
A secondment creates a triangle of relationships, and each party has different interests:
- Home employer: the employer of record. Holds the employment contract, usually pays the wages, and remains responsible for core employment obligations such as leave, tax and superannuation unless the parties agree otherwise.
- Host organisation: the business, team or agency where the employee actually performs work. Usually directs day-to-day work and provides the workplace, systems, supervision and training.
- Seconded employee: remains an employee of the home employer throughout, unless the arrangement later becomes a permanent transfer.
- Regulators: the arrangement can engage the Fair Work Ombudsman (awards and the National Employment Standards), the work health and safety regulator in the state where the work is performed, and state labour hire licensing authorities.
The interests of the home employer and the host largely align: both want the assignment to run smoothly and the employee to return or transfer without a dispute. But they diverge over money, control and liability, which is why the allocation of duties needs to be written down rather than assumed.
The two structures: internal and external secondments
The legal mechanics differ depending on whether the host is part of the same business or a separate organisation, which produces two distinct structures:
- Internal secondments: The employee stays employed by you and moves to another team, department or business unit for a defined period. This is the simplest structure from a legal and payroll perspective, because the employer, the award coverage and the workplace generally do not change. You typically document it with a short variation letter confirming the new duties, reporting lines, location, duration and what happens at the end.
- External secondments: The employee remains employed by the home employer but performs work for a separate organisation. The two organisations usually sign a secondment agreement, and the employee signs a variation or side letter. The key questions are who directs the work day to day (usually the host), who pays the wages (usually the home employer, which may recharge the host), and which policies apply in the host environment. External secondments carry most of the legal complexity, because employment law, safety law and commercial law all apply at once.
The legal framework that applies
National Employment Standards and awards
The National Employment Standards in s 61 of the Fair Work Act 2009 (Cth) set minimum conditions that apply to all national system employees and cannot be displaced by an employment contract. They cover maximum weekly hours, flexible work requests, casual employment, parental leave, annual leave, personal and carer's leave, community service leave, long service leave, public holidays, superannuation contributions, and notice of termination and redundancy pay. A secondment does not suspend any of this: entitlements keep accruing while the arrangement runs.
If a modern award or enterprise agreement covers the employee, the seconded role must fit within it. Award coverage turns on the work performed and the nature of the employing business, so a move to a different classification or to duties covered by a different award needs to be checked rather than assumed. If the seconded role attracts a higher classification or allowances, the higher rate generally applies during the secondment. If the arrangement would pay below the minimum rate, the award wins and the difference is an underpayment.
Work health and safety
Under the model work health and safety laws in force in most states and territories, both organisations usually owe duties. Section 19 of the Work Health and Safety Act 2011 (Cth) imposes a primary duty on a person conducting a business or undertaking to ensure, so far as is reasonably practicable, the health and safety of workers engaged by them and workers whose activities are influenced or directed by them while at work. The host influences and directs the seconded employee's work, and the home employer caused the worker to be there in the first place, so both are on the hook.
Where more than one person has a duty in relation to the same matter, s 46 requires each duty holder to consult, cooperate and coordinate activities with the others. In practice this means joint induction, site-specific training, agreed incident reporting lines and clarity about who controls the work environment. A seconded employee who falls into the gap between two duty holders is exactly the scenario safety regulators treat seriously.
Labour hire licensing
An external secondment can look a lot like labour hire, and in some states that triggers a licensing scheme. In Victoria, s 7 of the Labour Hire Licensing Act 2018 (Vic) defines providing labour hire services broadly: supplying individuals to perform work in and as part of a host's business, where the provider is obliged to pay them for the work. It does not matter whether a contract exists with the host, whether the supply is direct or indirect, or who controls the work. Section 13 makes it a civil penalty to provide labour hire services without a licence, and s 15 prohibits a host from entering into an arrangement with an unlicensed provider. Both provisions carry penalties for the business involved.
Queensland operates a mandatory licensing scheme under its Labour Hire Licensing Act 2017 (Qld), which commenced on 16 April 2018. South Australia has its own scheme, which currently focuses on specified industries such as meat and horticulture processing and is being expanded.
Whether a particular secondment meets these definitions is a question of substance, not label. A genuine secondment driven by capability development or collaboration between related entities may fall outside the definitions, but an arrangement whose real purpose is supplying labour for a fee may be caught regardless of what the documents call it. This is worth checking before the arrangement starts, because the penalties can attach to both the provider and the host.
Setting up a secondment: the sequence
A well-run secondment follows a short sequence:
- Define the need: Project support, coverage for leave, capability building or partnership objectives.
- Confirm the role: Duties, reporting lines, location, duration, and any higher duties or allowances.
- Agree the commercial terms if external: Who pays, how any recharge works, confidentiality, IP ownership and indemnities between the organisations.
- Document the arrangement: A secondment agreement between the organisations and a variation letter with the employee.
- Onboard and monitor: Host induction, safety training, system access and regular check-ins with all parties.
- Plan the close-out: Handover, performance review and return to the home role.
What happens at the end
The return to the home role is a contractual matter. Nothing in the National Employment Standards creates a general right to resume the same role after a secondment, so the return arrangements should be written down at the start: the return date, location, any refresher training and any changes to duties.
If the home role no longer exists, the standard restructuring and redundancy processes apply, including the notice and redundancy pay obligations in the National Employment Standards. The redundancy pay obligation does not apply where the employee has less than 12 months of continuous service or the employer is a small business employer of fewer than 15 employees, under s 121 of the Fair Work Act 2009 (Cth).
If everyone wants the secondment to become permanent, end the arrangement and issue a new employment contract with the host. The transfer of business rules in the Fair Work Act 2009 (Cth) then become relevant. Under s 311, there is a transfer of business where employment with the old employer ends and, within three months, the employee takes up the same or substantially the same work with a new employer connected to the old one, for example through associated entities or a transfer of assets. Where those rules apply, continuity of service and accrued entitlements carry across, and the Fair Work Commission can make orders about which industrial instruments transfer. This is a technical area and the paperwork matters.
Where secondments go wrong
The recurring problems fall into a few familiar patterns:
- Misclassification and underpayment: Moving an employee into duties covered by a different award or classification without checking the rates is a common source of underpayment claims.
- The labour hire surprise: An external secondment structured for a fee can be recharacterised as labour hire, with penalties for both the provider and the host.
- WHS gaps: Where two businesses share responsibility, incidents fall between them unless induction, training and reporting are coordinated.
- The return dispute: A promised return to the home role that was never documented is the classic secondment conflict.
- Who is the employer: If the host exercises day-to-day control and pays the wages, a court or tribunal may treat the host as the effective employer for purposes such as unfair dismissal or vicarious liability, whatever the contract says.
When to involve a lawyer
The cheapest advice is at the structuring stage, before the documents are signed. An employment lawyer can assess whether a modern award covers the seconded work and at what classification, whether the arrangement meets a labour hire definition in the state where the work will be performed, and what the transfer of business consequences would be if the arrangement later becomes permanent. A lawyer can also draft the secondment agreement and the employee variation so that return obligations, WHS allocation, confidentiality and IP ownership are explicit rather than assumed.
Internal secondments are simpler, but a quick review of the variation letter is still worthwhile where duties, pay or location change. For external secondments, legal input is normally justified before the agreement is signed, particularly where the secondment is for a fee, the host is a client, or the employee will handle sensitive data or create intellectual property.
The substance decides the obligations
Calling an arrangement a secondment does not stop a regulator from treating it as labour hire, or a tribunal from treating the host as the employer. The label is cheap; what matters is what the documents, control and payment arrangements actually show. That is why the most valuable step is not drafting at the end but a short legal review before the arrangement starts: confirming the award treatment, checking the labour hire position in the state where the work is performed, and allocating WHS responsibilities in writing. That work is usually far less expensive than a penalty or an underpayment backpay claim, and it is what turns a secondment from a legal risk into the flexible, low-risk staffing tool it is meant to be.