Under a secondment agreement, an employee is provided on a "loan" basis by their employer
- to another part of the same business (for example, to a branch surgery)
- or to a different business (for example, a neighbouring practice).
This guidance focuses on staff sharing arrangements between two separate businesses.
What does it mean in practical terms?
The intention is that the secondment entails no change in the employer. For example Practice A is the employer, and continues to be the employer during the period of the employee's secondment to the host employer, Practice B.
- The employee continues to be paid by Practice A, and the employee does not transfer employment to Practice B.
- The employee will return to Practice A at the end of the period of secondment. Essentially, a secondment will mean that Practice A will remain the employer of the seconded employee, as the seconded employee's contract of employment continues with them.
- The employee’s continuity of employment with Practice A remains unaltered.
Although the secondment entails no change in the employer, it is important that a written agreement is drawn up between Practice A and Practice B to enable Practice A to obtain payment from Practice B for the services of the seconded employee.
Practice A will retain control and continue to be responsible for the seconded employee's pay and benefits, management of holidays, sickness absence, maternity or adoption or paternity leave, other extended leave periods, disciplinary and grievance procedures (although information from Practice B may be required), appraisals (although information from Practice B may be required, i.e. on target setting and performance assessment) and any expenses as per the terms of the contract of employment.
Upon the completion of the secondment the seconded employee will return to being directly managed by Practice A.
A genuine secondment will depend on the contractual terms between Practice A and Practice B; as well as the contractual terms between Practice A and the seconded employee; and the way the employee is treated by Practice A and by Practice B. An examination of the relationship between the parties will be required.
If there is no contractual provision within an employee's contract of employment stating that the employee is required to undertake temporary secondments at the request of the practice, then it is advisable that the employee is made aware that the secondment is offered on a voluntary basis (as opposed to being imposed).
What are the advantages of the arrangement?
Potential benefits of secondments:
- Cost savings
- Allowing for a broadened skills base within an organisation, and identifying and sharing best practice
- Building or enhancing relations and links with other practices
- Addressing staff shortages and staff excesses
- Offering employees personal and career development opportunities
- Time-limited, enabling both practices to review their business needs on a periodic basis
Potential pitfalls of secondments:
- Overcoming practical problems - could there be uncertainty and confusion as to the arrangement?
- The employee being ill-suited for the secondment as he or she does not hold the necessary skills, or conversely, the employee preferring to work at the host practice, so may wish to leave Practice A to become an employee of Practice B
- Evaluating the success of the secondment
Making a secondment agreement
It is essential to draw up an agreement between the parties to a secondment arrangement to avoid future acrimony or dispute. This arrangement could be formalised by a letter from the employer (Practice A) to the seconded employee (and copied to the host practice (Practice B)) confirming that it is a secondment.
The BMA also recommends that a service level agreement should be in place between Practice A and Practice B to assist the governance of arrangements and to ensure a payment to Practice A is forthcoming. The service level agreement would cover terms relating to the payment and other costs as well as terms on insurance and indemnity. It is also important to note that both Practice A and Practice B could be liable for any negligence by the seconded employee.
Points for consideration to be covered in the secondment agreement
Does the agreement:
- confirm that the seconded employee has a contract of employment with the employer practice
- make parties clear about the objectives of the arrangement
- clearly set out the terms relating to payment, benefits, entitlements, expenses and leave
- clearly set out the responsibilities and duties of each party been e.g. the specific work locations?
- clearly state that the seconded employee will carry out the lawful instructions of the host practice?
- set out performance review mechanisms and how the seconded employee will be appraised and by whom?
- refer to the applicable disciplinary and grievance procedures?
- identify ownership of intellectual property?
- set out a provision on confidentiality?
- set out relevant policies and procedures that the seconded employee needs to comply with e.g. health and safety, managing conflicts of interest?
- set out the arrangements for terminating the secondment?
- set out the seconded employee's position on ending the secondment?
- set out provisions on insurance and indemnity?
Termination of the secondment
Each of the three parties to the arrangement (the employer practice (Practice A), the host practice (Practice B), and the seconded employee) have the right to terminate the secondment. The statutory minimum notice periods do not apply because only the secondment (not the employment) is ending.
However, the parties to a secondment agreement need to ensure that when terminating the arrangement that they do not breach the agreement, or breach the implied term of mutual trust and confidence (an employee has to show that the employer is guilty of fundamental breach of conduct so as to seriously harm or destroy the employment relationship, when claiming constructive unfair dismissal subject to having the requisite continuous service).
Subject to the usual employment protection rights, Practice A and the seconded employee will also have the right to terminate the employment. Where an employee resigns from Practice A, the employee will also resign from the secondment arrangement. Practice A will be responsible for final entitlements, such as any pay for accrued but untaken annual leave.
In a termination of employment situation, the statutory minimum notice period / contractual notice will apply (the contractual notice provision cannot be less than the statutory entitlement to minimum notice under s.86 of the Employment Rights Act 1996).
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