Anja Pich is a commercial lawyer and the Managing Lawyer at Lawpath. She practises across all areas of commercial law and advises businesses of every size, from first-time founders to established companies, on their legal, regulatory and commercial needs.
A client asks to borrow your best estimator for six months. You shake hands, she starts Monday, and nobody has said who pays her, who supervises her, or whose insurance responds if she falls off a ladder at their site. For the whole secondment she stays your employee, on your payroll, under your award and on your workers’ comp policy. Anything left out of writing comes back to you.
The short version: your secondee stays your employee, so wages, super, leave and your award all stay with you. The host runs their day, and both of you owe them a safe workplace. Get the employee’s written agreement, then sign a three-way agreement before they start.
What is a secondment?
A secondment is a temporary arrangement where an employee of one business (the home employer) works for another business (the host) for an agreed period, then returns to their home employer.
To be seconded means to be temporarily placed with another business or team while staying employed by your own. The person placed is the secondee. Australian law has no single statutory definition of secondment; it is a contractual arrangement layered on top of an existing employment relationship.
Why would a small business second an employee?
A secondment earns its keep when you lend a staffer to a client, move someone between related companies, share a specialist, cover a short-term gap, develop an employee in a different business, or trial higher duties before making them permanent.
For a small business, a secondment is usually a favour to a client or a move inside your own group. Both still need paperwork. An internal secondment moves the employee to another team, site or related entity, usually with a variation letter and an intra-group recharge if the entities differ. An external secondment places them with a client, partner or supplier under a three-way agreement. Each company in a group is a separate employer, even between associated entities, so a related-company move still needs paperwork. A Change of Duties Notice documents an internal higher duties trial.
Who is the employer during a secondment?
In a typical secondment, the home employer stays the employer. The employment contract, the award or agreement, and the National Employment Standards (NES) obligations stay with the home business.
The host directs the daily work, and that alone does not make it the employer. She stays your employee for the whole placement. Australian law usually looks to the employment contract, and the secondee’s contract is with you. The risk grows when the host sets their pay, offers them a job or ends the placement without you, so keep hiring, firing and pay decisions with you and write that split into the agreement.
The secondee keeps their pay and conditions under their home employment, including the award or enterprise agreement that covers them, unless the parties formally agree a change. Award coverage depends on you as the employer and on the work they actually do. If the host role is a different kind of job, the classification (or even the award) can change, so check the duties against the award before the start date and pay at least the minimum for that classification. The host’s enterprise agreement doesn’t cover your secondee unless the Fair Work Commission makes a same job, same pay order.
If the secondee leaves you and starts with a related company within 3 months, it’s a transfer of employment under s 22(7) of the Fair Work Act 2009, and earlier service counts (s 22(5)) (FWC).
Treat a secondment as a variation that needs the employee’s written agreement, unless their contract already allows temporary assignments. Check the contract for a secondment, mobility or assignment clause. Even with one, the direction must be lawful and reasonable, and sending someone to work for a different business usually goes beyond what an employment contract allows. Get the employee’s agreement in writing before the start date. Can an employer change the terms of your employment agreement without your consent? covers variation rules, and a Letter to Amend Employment Agreement documents the change.
Who pays the secondee’s wages, super and leave?
PAYG and payroll stay with you. PAYG withholding sits with the business that pays the wages, reported through Single Touch Payroll (ATO). Keep the secondee on your payroll. If the host pays them directly, PAYG withholding, Single Touch Payroll, super and payroll tax can shift to the host for those payments, and the arrangement starts to look more like host employment. Settle it with your accountant first.
Super runs on Payday Super. Super is 12% of qualifying earnings and must reach the fund within 7 business days after each payday under Payday Super (ATO; how super works for employers).
The host pays you back, plus GST. The host reimburses agreed costs (salary share, super, on-costs, any fee). If you’re registered for GST, the recharge is generally payment for a service you supply to the host, so add GST unless you and the host are in the same GST group. Payroll tax follows the wages. If you pay the secondee and your group’s wages are over your state’s threshold, their wages stay in your payroll tax return, and related companies usually share one threshold. Confirm both with your accountant.
Recharge = (annual salary × share of the secondee’s hours worked for the host × months seconded ÷ 12) × 1.12 + any agreed fee or on-costs, plus GST if it applies. The 1.12 covers 12% super guarantee. On-costs can include leave accrual, workers’ compensation, equipment and travel.
Illustrative example. Kestrel Joinery Pty Ltd, a 22-person Ballarat joinery, seconds senior estimator Tamsin Albescu to its client Ironbark Fitouts Pty Ltd for 6 months at 80% of her time. Tamsin earns $92,000 a year and stays on Kestrel’s payroll. The recharge is $92,000 × 80% × 6 ÷ 12 = $36,800 salary, plus 12% super of $4,416, for $41,216 before any agreed fee, on-costs or GST. The agreement assigns copyright in the tender documents to Ironbark, keeps Kestrel’s pricing data confidential, and bars Ironbark from hiring Tamsin for 3 months after the secondment ends.
Leave keeps accruing with the home employer and the secondment counts as continuous service (Fair Work Ombudsman). The agreement should say who approves and records leave. Annual leave under the NES is paid at the employee’s base rate for their ordinary hours at the time they take it, so mid-secondment leave on a higher base rate is paid at the higher rate, and leave after they return home is paid at the home rate even if it accrued during the secondment. Paying the uplift as a separate higher duties allowance can change the answer, depending on the award, so say in the agreement how the uplift is paid and which rate applies to leave. Long service leave comes from state and territory laws, plus portable schemes in some industries, each with its own test for interstate work, so check the Act in both states and record which one you’re applying. Annual leave in Australia has the detail.
Who is responsible for WHS during a secondment?
Both businesses. The home employer and the host are each a person conducting a business or undertaking (PCBU) with duties to the secondee, and neither can transfer or contract out of those duties.
The primary duty of care is s 19 of the model WHS laws. Duties cannot be transferred, more than one person can hold the same duty, and duty holders must consult, cooperate and coordinate. Contract terms that exclude a duty are void (s 272). Those rules appear in each harmonised state’s Act (Safe Work Australia, model WHS laws). Every state and territory except Victoria now runs a version of the model WHS law, and Western Australia switched in 2022. Victoria’s Occupational Health and Safety Act 2004 treats a host as the employer of labour hire workers for safety purposes, so the host owes them the same duties as its own staff, and the host and provider must consult, cooperate and coordinate. Even outside that rule, a Victorian host owes safety duties to anyone working at its workplace (WHS vs OHS).
The host provides the safe workplace and induction, and you check it delivers and stay in contact with the secondee (consulting with other duty holders, labour hire WHS duties). Agree how incidents are reported, who notifies the regulator, and who handles a complaint about harassment or bullying at the host, because both businesses carry duties to prevent it, and record it in your WHS Policy.
Workers’ compensation is state and territory based, so the answer depends on where the secondee works and how each scheme treats seconded workers (Safe Work Australia). In most cases she stays your worker for workers’ compensation, so your policy responds and you keep declaring her wages. NSW says this outright: a worker lent or hired out to another business stays the lender’s worker. For interstate work, the state of connection test decides which scheme applies, and Victoria’s guideline lets you ignore temporary arrangements of six months or less. Ring your insurer before day one, confirm cover at the host’s site, and ask the host to confirm its public liability policy responds if your secondee is hurt there. Confirm both businesses’ PI and public liability policies also respond to loss the secondee causes.
Who owns the work and confidential information a secondee creates?
By default, copyright in work an employee creates as part of their job belongs to their employer, which in a secondment is usually the home business. If the host needs to own what the secondee creates, the agreement must assign or license it (Copyright Act 1968, s 35(6)). Copyright isn’t the whole picture. Inventions, designs and moral rights need their own clauses, so cover them in the assignment.
The secondee will see the host’s information, so the agreement needs confidentiality obligations to both businesses, or a separate Confidentiality Agreement.
Treasury’s draft bill from 7 September 2026 would make most no-poach deals between businesses cartel conduct, with a start date targeted for 2027. It also catches no-poach clauses in agreements you’ve already signed. The secondment exemption is narrow: the clause must be reasonably necessary for the secondment, end within 3 months after it finishes, and the employee must get written notice and consent.
Restraints must still be reasonable to be enforceable (restraint of trade). Check the clause before you sign (protecting IP in an employment contract).
Do same job, same pay or labour hire licensing laws apply to secondments?
Same job, same pay orders let the Fair Work Commission order that a supplied employee be paid at least the host’s enterprise agreement rate, and they only matter where the host has an enterprise agreement covering the secondee (Fair Work Act s 306E; Fair Work Ombudsman). No order can be made where the host is a small business employer (fewer than 15 employees, counting associated entities), where the work is the provision of a service, or for training arrangements, and short placements carry a default 3-month exemption (DEWR). Orders only apply once the Fair Work Commission makes one.
Labour hire licensing is a separate state overlay, with published carve-outs in Victoria and Queensland. In Victoria, supplying a secondee needs no labour hire licence unless your business is predominantly in the business of supplying workers. A secondee is an employee you engage on a regular and systematic basis, who reasonably expects to keep working for you and mainly works for you, lent to another business on a temporary basis (Labour Hire Authority Victoria). That exclusion still applies after Victoria’s labour hire definition changed on 1 October 2026. In Queensland, no licence is needed for in-house employees supplied temporarily, which their guidance calls a genuine secondment, or within one recognisable business (Labour Hire Licensing Queensland). If you operate in South Australia or the ACT, check your state’s labour hire licensing rules before the secondment starts (Consumer and Business Services SA, labour hire licensing). NSW, WA, Tasmania and the NT have no general labour hire licensing scheme.
These exemptions turn on the facts. A business that regularly supplies staff to others for a fee can fall outside them. Victoria’s labour hire licensing scheme has the background.
How long can a secondment last, and how does it end?
There is no legal maximum for a secondment. Set a fixed period with an option to extend by written agreement of all three parties. The longer it runs, the more it looks like the host’s job, so review anything past 6 months.
Backfilling usually means a fixed term hire. Since 6 December 2023, most fixed term contracts are capped at 2 years including renewals, but the cap doesn’t apply when you hire someone to cover another employee’s temporary absence (Fair Work Act s 333F), which fits a secondment. If the secondee doesn’t come back, that exception stops covering the role. Every fixed term employee still gets the Fixed Term Contract Information Statement (Fair Work Ombudsman; fixed term contracts; Fixed Term Employment Agreement).
A secondment ends on the agreed date, or earlier under the agreement’s early termination clause, and the employee returns to their home role. She is still your employee when she comes back. Either business should be able to end early on written notice, with a handover, equipment returned and a final recharge.
Ending the secondment does not end the employment. If the home role has changed or gone, consult the employee as the award or agreement requires, look for redeployment across your business and any associated entities, and only change pay or classification with their written agreement. If no suitable role exists, it’s a redundancy. NES redundancy pay applies unless you’re a small business employer with fewer than 15 employees (Fair Work Ombudsman).
What should a secondment agreement include?
The Secondment Agreement template covers the terms you need to settle, from who stays the employer to pay, WHS, IP and how it ends.
Start with a Secondment Agreement
Put the duration, pay, supervision, WHS, IP and how it ends in writing before your employee starts at the host. Use the Secondment Agreement template.
Secondment checklist
Work through these 15 steps in order, from the business case to the return plan.
- Confirm the business reason and the end date, since every other term hangs off them.
- Check the employee’s contract for an assignment or mobility clause that already allows the move.
- Get the employee’s written agreement before you promise the host anything.
- Agree the recharge with the host and write the figure or formula down.
- Confirm in writing that the home employer stays the employer.
- Keep the employee on your payroll so wages, PAYG and super stay in your systems.
- Check the award or enterprise agreement coverage still fits the host work.
- Check whether the host has an enterprise agreement and 15 or more employees (including a related company), which brings same job, same pay into play.
- Check labour hire licensing in each state involved, because the exemptions turn on the facts. NSW, WA, Tasmania and the NT have no general scheme.
- Call your workers’ compensation insurer before day one and record the answer.
- Agree WHS induction, supervision and incident reporting with the host.
- Settle who owns the secondee’s IP and how each business’s information stays confidential.
- Add a non-solicitation clause so the host cannot hire the secondee for a set period.
- Sign a three-way secondment agreement covering all of the above.
- Diary the end date and plan the return role before the secondment starts.
Before your employee starts at the host, get a signed three-way secondment agreement that covers pay, WHS, IP and how it ends. Start with the Secondment Agreement template.
Start with a Secondment Agreement
Put the duration, pay, supervision, WHS, IP and how it ends in writing before your employee starts at the host. Use the Secondment Agreement template.
When should you get legal advice about a secondment?
Most secondments between friendly businesses are simple. Three facts make one hard: the host competes with you, the work crosses a state border, or the host wants to keep what your employee creates. If any apply, get an employment lawyer to read the agreement and an accountant to check the GST and payroll tax on the recharge before anyone signs.
Lawpath can help with the legal, accounting and tax side, because it covers legal, accounting, tax and compliance.
Start with the Secondment Agreement template, or talk to an employment lawyer.
FAQs
Who pays the secondee’s super during a secondment?
The home employer, through its own payroll. Super is 12% of qualifying earnings, due within 7 business days after each payday under Payday Super.
Can the host business hire the secondee permanently?
A non-solicitation clause can bar it for a set period, but the exemption in Treasury’s draft bill is narrow: the clause must be reasonably necessary for the secondment, end within 3 months after it finishes, and the employee must get written notice and consent. A permanent move is a new employment relationship; between related companies, service can count across.
Is a secondment the same as labour hire?
No. In a secondment, the home employer stays in place and the person comes back to it. Victoria and Queensland exclude genuine secondments of in-house employees from labour hire licensing, unless lending staff is your business model. In other states, check your state’s labour hire licensing rules.
