What is a secondment agreement?
Is a secondment agreement legally valid and enforceable in South Africa?
“Labour Relations Act 66 of 1995 — section 198A(3)(b) — temporary employment services — placed workers deemed employees of the client — section supports the sole employer interpretation. A placed employee who has worked for a period in excess of three months is no longer performing a temporary service and the client becomes the sole employer by virtue of section 198A(3)(b).”
“A transfer and secondment are not the same — “when you transfer a person to a department it becomes a permanent feature, but when you second a person, you can recall that person at any given point in time”.”
“When a court determines the question of an employment relationship, it must work with three primary criteria: An employer’s right to supervision and control; Whether the employee forms an integral part of the organisation with the employer; and The extent to which the employee was economically dependent upon the employer.”
When you need a Secondment
- When you lend an employee to a group company, subsidiary, joint venture or associated entity — for a project, a skills-transfer, or to fill a temporary gap — and you want them to stay your employee and come back afterwards.
- When a senior person (a director, manager or specialist) is placed with a client, customer or portfolio company for a fixed engagement, and you need to fix who pays, who instructs, and who carries the risk while keeping the home employment intact.
- When an international or cross-border placement is involved (a home-entity employee working at a host South African entity, or a South African employee posted abroad) and you must manage tax residency, payroll, immigration and the co-employment risk in the host country.
- When you want to avoid two expensive accidents: triggering a section 197 transfer of the employment to the host, or creating a labour-broker / temporary employment service arrangement under section 198 of the LRA that you never intended.
- When the secondee will work inside the host’s systems and access its confidential information and personal data, so confidentiality, IP ownership and POPIA obligations need to bind everyone for the duration.
What a Secondment should contain
Continuing employment with the home employer (no transfer)
State expressly that the employee remains employed by the seconding employer throughout, that the original contract of employment continues unchanged, and that nothing in the secondment transfers the employment to the host or constitutes a section 197 transfer. This is the load-bearing clause — but it is read together with how the arrangement actually operates, so the practice must match the wording.
Not a temporary employment service / labour broker
Record that the home employer is lending its own employee, not carrying on the business of providing staff to clients, so the arrangement is not a temporary employment service under section 198 of the LRA and the section 198A “deeming” provision does not apply. This keeps the host from being deemed the sole employer after three months under Assign Services v NUMSA.
Duration, recall and return
Fix the secondment period (and any renewal), how either party may end it early, the home employer’s right to recall the secondee, and the host’s right to return them. A secondment is by nature temporary and recallable — open-ended placements that look permanent start to resemble a transfer of employment rather than a secondment.
Supervision, control and day-to-day instruction
Spell out that the host gives only operational, day-to-day direction for the seconded work, while the home employer retains overall employer authority (discipline, performance management, terms of employment). Because South African courts apply the supervision-and-control / integration test from SITA v CCMA, drafting this carefully — and living by it — is what keeps the host from becoming a co-employer.
Remuneration, payroll, costs and recharge
Set out who pays the salary and benefits (usually the home employer continues), how the host reimburses or is recharged (often cost plus a margin or a fixed fee), and the treatment of bonuses, allowances, leave accrual, pension and medical aid during the secondment, so the secondee’s package and continuity are not disrupted.
Liability, indemnity and insurance
Allocate responsibility for the secondee’s acts and omissions while working for the host, with an indemnity (commonly the host indemnifies the home employer for what happens under the host’s direction) plus public-liability, professional-indemnity and workers’-compensation cover (COIDA). Make clear who carries the risk of the secondee’s conduct and of any injury on the host’s premises.
Confidentiality, IP ownership and POPIA
Bind the secondee and the parties on confidentiality, agree who owns intellectual property the secondee creates during the secondment (this does not pass automatically to the host), and address POPIA where the secondee processes personal information — including who is the responsible party and what operator safeguards apply. The host’s internal staff policies do not automatically bind a secondee, so these must be in the agreement.
Discipline, grievances and termination of employment
Keep disciplinary and grievance authority — and any decision to dismiss — with the home employer (with host input on conduct at the host), and provide that ending the secondment does not end the employment: the secondee returns to a suitable role. Mixing host-driven dismissal into a secondment is a common route to an unfair-dismissal claim and a co-employment finding.
Tax, residency and cross-border terms
For cross-border secondments, address tax residency, PAYE/payroll location, double-tax relief, social security, immigration / work-authorisation and which law governs the employment, so that lending an employee across a border does not create an unintended permanent establishment, tax or co-employment exposure. Tax treatment should be confirmed with SARS or a tax adviser.
Secondment vs temporary employment service (labour broker) vs section 197 transfer in South Africa
| Feature | Secondment | Temporary employment service (s 198) | Transfer (s 197) |
|---|---|---|---|
| Who is the employer | Home (seconding) employer stays the employer | TES is employer (client deemed sole employer after 3 months for below-threshold workers) | New employer takes over by operation of law |
| Is it a business? | Lending your own staff — not a labour-supply business | The business of procuring/providing employees to clients | Transfer of a business as a going concern |
| Duration | Temporary and recallable; employee returns | Ongoing supply for the assignment | Permanent — employment moves across |
| Employee’s contract | Stays in place with the home employer | With the TES (or deemed client) | Transfers automatically to the new employer |
| Key statute | Common-law employment + LRA/BCEA protections | LRA s 198 / s 198A (Assign Services v NUMSA) | LRA s 197 |
| Main risk | Host found to be co-employer on the facts | s 198A deeming → client becomes sole employer | Failing to recognise terms must transfer on no less favourable basis |
Common South African pitfalls
- Mistaking a secondment for a section 198 labour-broker arrangement (or running it like one): if you are effectively supplying a worker to a client as a labour-supply business, you risk the section 198A deeming provision in Assign Services v NUMSA, under which a below-threshold worker placed for more than three months becomes the sole employee of the client — the opposite of what a secondment is meant to achieve.
- Letting the host take over as employer in practice: if the host alone supervises, disciplines, sets the secondee’s terms and the secondee is fully integrated into the host with the home employer doing nothing, a court may find the host is a co-employer or the true employer on the supervision-and-control test from SITA v CCMA — exposing the host to unfair-dismissal and other claims it did not expect.
- Seconding an employee without their consent: an employer cannot lawfully place an employee under another organisation’s direction or change their working arrangements unilaterally. A secondment without genuine employee agreement can be a repudiation of the employment contract and an unfair labour practice.
- Open-ended “secondments” that are really transfers: a permanent placement dressed up as a secondment can become a transfer of employment, leaving the home employer believing it still employs someone it has effectively given away — and creating disputes over who must take the person back.
- Forgetting liability, IP, POPIA and tax: omitting indemnities and insurance, failing to assign IP the secondee creates at the host, ignoring POPIA where the secondee processes personal data, or overlooking cross-border tax and immigration are the gaps that turn a simple staff loan into an expensive dispute.
Frequently asked questions
Is a secondment agreement legally valid in South Africa?
Yes. A secondment agreement is a valid, enforceable contract in South Africa when it is a genuine temporary placement. The seconding (home) employer stays the employer, the employee’s contract of employment continues, and there is no transfer of employment — the employee is simply lent to the host for a defined period and recalled at the end.
Who is the employer during a secondment — the home employer or the host?
The home (seconding) employer remains the employer. The employee’s contract of employment stays with the home employer, who usually keeps paying the salary and retains overall authority. The host only directs the day-to-day work. But South African courts look at substance: if the host effectively supervises, controls and absorbs the secondee, the host can be found to be a co-employer or the true employer.
Is a secondment the same as using a labour broker (temporary employment service)?
No. With a secondment you lend your own employee to a host. A temporary employment service (labour broker) under section 198 of the LRA is a business that supplies workers to clients. The difference matters: in Assign Services v NUMSA the Constitutional Court held that a below-threshold worker placed by a labour broker for more than three months becomes the sole employee of the client. A properly structured secondment falls outside that regime.
Does a secondment transfer the employee to the host under section 197 of the LRA?
No. Section 197 of the LRA transfers employees automatically only when a business is transferred as a going concern. A secondment is a temporary loan of staff, not a sale or transfer of a business, so the employment does not move to the host. As the Labour Court noted in Mothupi, a secondee — unlike a transferred employee — can be recalled at any time.
Can an employer second an employee without their consent?
No, not safely. Placing an employee under another organisation’s direction is a material change to their working arrangements, so it requires the employee’s consent. Seconding someone unilaterally can amount to a repudiation of the employment contract or an unfair labour practice. A well-drafted secondment records the employee’s agreement and protects their existing terms and continuity of service.
Can a seconded employee still claim unfair dismissal?
Yes. A secondee keeps full Labour Relations Act and Basic Conditions of Employment Act protection — including unfair-dismissal and unfair-labour-practice rights — throughout the secondment. The claim runs against whichever entity is found to be the employer; if a court finds the host is a co-employer on the facts, the host can be drawn into the dispute alongside the home employer.
How is the host stopped from becoming the employer?
By drafting and operating the secondment so the home employer keeps real employer authority. The agreement should reserve discipline, performance management and the terms of employment to the home employer, limit the host to operational instruction, keep the placement temporary and recallable, and confirm the home employer continues paying the secondee. Because courts apply the supervision-and-control test from SITA v CCMA, the day-to-day practice must match the wording.
What extra issues apply to cross-border secondments?
Cross-border secondments add tax residency, PAYE/payroll location, double-tax relief, social security, immigration and work-authorisation, and the co-employment risk under the host country’s law. A home-entity employee working at a South African host can, on the facts, be found to have a South African employer too. These placements need tax and immigration advice (confirm tax treatment with SARS or a tax adviser) alongside the secondment agreement.
Sources & authority
- Assign Services (Pty) Limited v National Union of Metalworkers of South Africa and Others (CCT194/17) [2018] ZACC 22; [2018] 9 BLLR 837 (CC); (2018) 39 ILJ 1911 (CC); 2018 (5) SA 323 (CC) (26 July 2018)
- Mothupi v City of South African Local Government Bargaining Council and Others (JR2300/2022) [2024] ZALCJHB 170 (24 April 2024)
- State Information Technology Agency (SITA) (Pty) Ltd v CCMA and Others (JA 16/2006) [2008] ZALAC 1; (2008) 29 ILJ 2234 (LAC) (20 March 2008)
- Labour Relations Act 66 of 1995 — s 197 (transfer of contract on transfer of business), s 198 and s 198A (temporary employment services)
This guide is general information, not legal advice. It reflects the law as at June 2026.