How to Review a Secondment Agreement: A Clause-by-Clause Checklist

How to review a secondment agreement before you sign A secondment is an arrangement where an employee stays on one company's payroll (the home employer) but works for and under the direction of another company (the host) for a fixed period. It is common inside corporate groups, in client engagements and in joint ventures. Most secondment problems come down to four questions the agreement should answer without argument: who stays the employer, who directs and pays for the work, who carries the tax, and what happens when the secondment ends early. Read the agreement with those in hand and the risky clauses stand out quickly. Work through the checklist below clause by clause. The test for each clause is the same: is the rule clear enough that the home employer, the host and the employee could settle a dispute by reading it? This is general information, not legal advice. A cross-border secondment in particular has tax and immigration consequences that need professional advice on the final structure. ## The clause-by-clause checklist ### 1. The three parties and consent

• Is it a tripartite document, signed by the home employer, the host and the seconded employee? Has the employee actually agreed to the secondment and its terms?
• Red flag: a two-party deal between the companies that changes the employee's working life without their written consent. ### 2. Who remains the employer
• Does the agreement state clearly that employment continues with the home employer, and that the secondment does not create a new contract of employment with the host?
• Red flag (employee): silence on continuity, so your length of service, seniority and benefits are put in doubt. Red flag (host): wording loose enough that a tribunal could treat you as the real employer, with all the obligations that follow. ### 3. Duration, extension and recall
• Is there a fixed term, a method to extend it, and a right for the home employer to recall the employee on notice?
• Red flag: an open-ended secondment with no end date and no recall mechanism. ### 4. Duties, control and reporting
• Does the host direct the day-to-day work, and is that reporting line written down?
• Red flag: this clause matters beyond management. The more the host controls the work, the more tax authorities may treat the arrangement as a supply of manpower by the home employer, with the cost consequences in clause 6. A clause that is vague on control leaves that question open. ### 5. Remuneration and who pays
• Who pays salary and benefits, and how is the host charged: at actual cost, or cost plus a mark-up?
• Red flag: an undefined charge, or a mark-up that is not stated, so the inter-company invoice and its tax treatment become a later argument. ### 6. Tax: the clause that catches companies out
• Does the agreement address GST on the secondment charge, TDS on reimbursements, and, for a cross-border secondment, the risk of creating a permanent establishment or a change in the employee's tax residency?
• Red flag: silence on tax. In India, the Supreme Court in the Northern Operating Systems case (2022) held that a secondment can amount to a taxable supply of manpower service, so the cost consequences are real. For an inbound or outbound secondment, permanent establishment and personal tax residency need advice. This is not legal advice. ### 7. Benefits continuity: PF, gratuity and leave
• Are provident fund, gratuity, leave and insurance kept running with the home employer during the secondment?
• Red flag (employee): a gap that breaks your statutory benefit accrual or your continuity of service. ### 8. Confidentiality and intellectual property
• Who owns the work product and IP the employee creates while working for the host?
• Red flag: no assignment clause, so IP created during the secondment stays with the home employer by default when the host expected to own it. ### 9. Liability, indemnity and supervision
• Who is responsible for the seconded employee's acts, errors and safety during the secondment?
• Red flag (home employer): open liability for acts you no longer control. Red flag (host): no indemnity from the home employer for pre-existing employment claims. ### 10. Insurance and workplace safety
• Does the host extend its insurance and its workplace safety duties to the seconded employee?
• Red flag: the employee falls between two insurers and is effectively covered by neither. ### 11. Termination and early return
• Can the secondment end early, and does the employee return cleanly to a role with the home employer when it does?
• Red flag (employee): early termination that leaves you with no role to return to. ### 12. Immigration and work authorisation
• For a cross-border secondment, is the correct visa or work permit a condition, and whose responsibility is it to obtain and maintain it?
• Red flag: an employee expected to start before their work authorisation is in place. ### 13. Post-secondment restrictions
• Are any non-solicitation or confidentiality duties that survive the secondment reasonable and limited?
• Red flag: a broad restraint that bars the employee from future work; a post-term restraint of trade is generally unenforceable in India. ### 14. Governing law and disputes
• Is the governing law stated, and the forum fair, especially where the three parties sit in different places or different countries? ## Read it in this order Start with who remains the employer and who controls the work (clauses 2 and 4), because together they decide the character of the whole arrangement. Then read the tax clause (clause 6) alongside them, because the degree of control drives the tax result. Only then check benefits, liability, insurance and exit. Reviewing in that order keeps your attention on the clauses that decide cost and legal exposure, not just the mechanics. ## A quick note on the law A secondment in India sits on the Indian Contract Act, 1872, alongside social-security rules (provident fund, gratuity) and the tax position set out above. Rules differ by jurisdiction, and a cross-border secondment engages the tax and immigration law of both countries plus any applicable treaty, so for the UK, Ireland, Singapore, Australia or the US, check the local position. This is not legal advice. ## Where a contract workspace helps Checking a single secondment agreement by hand is fine. The difficulty is living with a whole set of them: knowing which employee is seconded where and until when, holding every recall date, applying the same tax and benefits treatment each time, and making sure no arrangement quietly turns the host into the real employer. Drafting a secondment, reviewing its continuity and tax clauses, tracking recall and review dates, and governing every live secondment can sit together in one AI workspace set up around how your group moves people. Adira is one example of a tool that keeps all of it under one roof.