What is a secondment agreement in 2 minutes or less… We set out what a secondment agreement should cover and how they operate with employee entitlements.

What is a secondment agreement? Well, it’s an agreement for a secondee. Well, thanks Simon, that’s about as helpful as a hole in the head. Fair enough. Stick around and I’ll tell you.

Hi. Simon here from The Contract Company, Contracts for Australian Businesses. That’s what we do. All day, every day, and sometimes every night. Lucky us.

What is a Secondment Agreement?

A secondment agreement is when an employee is sent by his/er company to work for a client, but remains to be the company’s employee with all the benefits and all.

I wasn’t being flippant when I said, “A secondment agreement is an agreement for a secondee.” Well that’s great. What is a secondee?

Basically, it’s your employee. So if you run a business, and you have an employee, and you want to allow that employee to go and work at a client site for a period of time, then you would use a secondment agreement.

Now the employee, even though they’re not physically based with you anymore, but they’re actually sitting with your client for that period of time, they are still your employee.

You still have to pay them. They still accrue employee entitlements as a normal employee. It’s just that the only thing that’s different is that they are sitting with the client. And the other thing that could be different is that they take direction while they’re sitting with the client from the client.

Example of a Secondment Agreement

So let’s use a classic example for us being in-camera is that law firms are often asked to provide lawyers to government departments, so the Department of Defense. So where the lawyer, where the law firm places the lawyer with the Department of Defense, that would be covered by a secondment arrangement or a secondment agreement.

The law firm still pays the employee. Defense pays the law firm for having them. That’s how they make some money. Um, so while they’re still being paid as an employee, while they’re actually on Defense’s side.  They’re usually subject to, um, direction and instruction from the client.

So I’ll be sitting there and the person or people of Defense would say, “Right, we need you to do X, Y, and Z today,” and off they’d go.

So, while they’re sitting on the D- you know, the premises of the client, they’re not actually under the real care and control of their employer because they’re actually getting instructions from the client.

Anyway, that’s a secondment agreement. As I’ve said, very common in camera um, and I think I’ve covered all the high points in them.

Um, if you do have any questions about this video, or in general, please feel free to get in touch, simon@contractcompany.com.au or 1-800-355-455. Thanks very much.

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