Employee Transfers and Secondments

In the Australian employment sector, temporary internal transfers are becoming increasingly commonplace. This is not a new practice, as employers have always transferred workers to different departments to account for changing organisational needs. However, it is now more common for employers to formalise these transfers and design them to better meet the professional development needs of workers. A growing number of businesses are even seeing the benefits of temporarily loaning an employee to another business. Such temporary transfers are tempting to employees because they enable workers to broaden their horizons without leaving the security of their current employment. This article looks at the legal framework for employee transfers and secondments in Australia.

Employee transfers

When an employer directs an employee to work in another capacity within the company, this is known as a transfer. A short transfer for a day or a few weeks is usually actuated under a clause in the employment contract that states that the worker is expected to take on other duties as required. Because this type of temporary reassignment is usually allowed in the employment contract, it is legal for an employer to require compliance with such a request. If the employee fails to comply, it can be legitimately noted as a performance management issue.

Workers sometimes complain if they are asked to perform duties that are outside their substantive position description. When someone is hired as a designer, for instance, they may complain if they are asked to assist with front desk coverage. However, so long as the transfer is for a brief period and necessary to meet the genuine needs of the business (and not punitive or bullying), then it is reasonable for the business to require the worker to undertake any duties that are safe for them to perform. 

The same cannot be said for a transfer that lasts for an extended period of time. In that case, the transfer may actually be a secondment, especially if the employee is consistently required to undertake duties that are markedly different from the duties of their substantive position. The rules around secondment are different to those that apply to short transfers.

Secondments

Every now and then, all organisations need competent workers to cover for another employee’s extended leave or to fill an unforeseen resource shortage. At these junctures, hiring new employees can be tedious, especially if the vacancy is only temporary. In these circumstances, secondments can be an effective mechanism to fill short-term employment needs.

A secondment is a temporary arrangement between employer and employee, allowing the employee to undertake a role within a different part of the organisation or even within another company. Secondments afford employees different experiences and can add to their skill sets while helping employers account for shifting organisational needs. Secondments can last for any period of time but are often 6 or 12 months in duration.

Secondments can be fixed-term or open-ended, and can be reduced or extended with the agreement of the secondee, employer and host company (if any). Because secondments involve a significant variation of the employment terms and conditions, the employer cannot impose a secondment on an employee without their agreement, nor can the employee insist on a secondment without the employer’s agreement.

Internal and external secondment

Internal secondments are a relatively common and straightforward type of secondment. In such an arrangement, an employer temporarily reassigns an employee to another section or department in the same organisation. The secondment provides an opportunity for the employee to learn another aspect of the business, gaining a valuable perspective that can benefit them in their regular role and potentially develop a wider network within the company. Indeed, some organisations encourage employees to work in multiple departments so they can find their ‘best fit’.

Conversely, with an external secondment, the employee temporarily transfers to another host organisation outside the business. An employee might take an external secondment that is local, national or even international, although the host organisation is typically in some form of commercial partnership with the employer. The critical element in these secondments is that the employee reserves the right to return to their original employer as soon as the secondment terminates.

Benefits of employee transfers and secondments

Employers can benefit from internal and external secondment arrangements due to the:

• increased employee engagement in the organisation;
• broadening of employee experience and knowledge in new areas inside and outside the business;
• increased employee understanding of their own role;
• improved resource management, particularly during times of peak or low demand;
• decreased need for redundancies in the organisation; and
• greater flexibility to use unique workers for a special project or period of time.

Risk management

Although there are undeniable benefits to secondments, there are important employment law issues at stake. Employers must consider the following issues when authorising employee transfer or secondment:

• the legal relationship between the employee and the host company;
• the employment laws that govern the secondment, particularly if the employee works overseas with foreign employment laws;
• responsibility for workplace health and safety during the secondment;
• employee performance evaluations and monitoring during the secondment;
• the aftermath of a secondment;
• the process for terminating the worker’s employment contract if this needs to occur during the secondment; and
• the implications if the employee resigns during the secondment.

A well-drafted secondment agreement can cover all of these issues. The agreement should stipulate critical terms and conditions of the secondment, such as performance expectations, duration, liability for salary, and other obligations. Failing to implement a secondment agreement can leave the employer at legal risk.

There are both legal and practical considerations with employee transfers and secondments. The employment law solicitors at Go To Court can help draft an effective secondment agreement to mitigate risk or advise an employee on any legal matter related to secondment. Please get in touch with the team on 1300 636 846.