Introduction

A secondment is an arrangement that allows an employee to work within another organisation (the “host”) while retaining a relationship with the employer. In a corporate group, secondment may involve placing a specialist with an affiliate, in an outsourcing arrangement, the employee may spend every working day at the client’s business. The agreements and documents with the employee often identify one employer, while the host gives instructions, sometimes assesses performance and may decide when the placement ends. When a dispute arises, it is important to understand which of them is answerable to the employee.

Nigerian law does not give one answer for every arrangement described as a secondment. Ordinarily, the sending organisation remains the substantive employer and the host receives the services. However, responsibility may also arise from the host ’s own conduct, the terms governing the secondment, or the statutory duty in question. It is useful to know and ascertain who employs the person and who is responsible for the decision or obligation in dispute.

Secondment and Transfer are Different Arrangements

The Court of Appeal has described “secondment” as a temporary transfer which contemplates the employee’s return to the former position or organisation. In Dalhatu v Attorney-General, Katsina State[1], the employee’s continued promotions in the civil service while working in the legislature helped establish that the placement had not permanently moved his employment.¹ The word ‘temporary’ matters because an indefinite placement, especially one accompanied by a new contract or a permanent move of payroll and disciplinary authority, calls for closer examination than its label suggests.

A secondment arrangement is different from a transfer of an employment contract. A transfer of employment involves moving the employment relationship from one employer to a new employer, so that the new employer assumes the employer’s contractual position. An employer cannot assume that calling a permanent change a secondment will settle the employee’s contractual position. The major distinction is that, in a secondment, the employee works temporarily for the host but remains employed by the sending employer; while a transfer moves the employment contract to a different employer and requires the employee’s consent. Simply changing the employee’s work location or day-to-day supervisor does not, on its own, transfer the contract.

The Substantive Employer and The Host

Who is the employer, and what must each organisation do?

A Secondment changes where, or for whom, an employee performs work without necessarily changing who employs that person. The Court of Appeal’s decision In Federal College of Education, Okene v Anyanwu[2], illustrates the distinction between the sending employer and the host. The employee had been employed by the Federal Ministry of Education and was seconded to the College. The Court held that the secondment did not make the College his employer, and the College could not validly terminate the Ministry’s employment contract as though it were the employer, as such, the Court of Appeal treated the seconded employee as remaining an employee of the sending institution.

Similarly, the National Industrial Court applied the same distinction in Obi v Fidelity Bank[3] where the claimant was employed as a teller by Fidelity Union Securities Limited and seconded to Fidelity Bank. Her work at the bank and receipt of long-service awards did not, by themselves, make her a bank employee during the secondment period. The Court treated her later conversion to the bank’s staff as a separate event.

When read together, the above decisions show that the identity of the employer depends on the employment relationship and the terms of the employment agreement and not simply on where the employee works or whose day-to-day operations the employee supports.

This does not mean that the host has no obligations, because an employee may owe the host compliance with lawful workplace directions, confidentiality requirements and the standards applicable to its premises and operations. The sending employer, meanwhile, generally retains its contractual obligations, including pay and the proper exercise of any right to discipline or terminate. The allocation can be more complex where the host promises benefits directly, exercises substantial employment powers, or a statute places duties on the entity controlling the workplace.

Secondment Vs Outsourcing Vs. Co- employment

The Nigerian regulatory framework on outsourcing is not consolidated; the relevant provisions are spread across general labour legislation and sector-specific instruments rather than a comprehensive framework clearly addressing the employment relationships involved. Some examples of these frameworks include the Federal Ministry of Labour’s guidelines on contract staffing and outsourcing in the oil and gas sector and its guidelines for banks, insurance and financial institutions. NITDA has also published a draft National Outsourcing Strategy, although this is a policy proposal for developing the outsourcing industry and should not be treated as an operative regulation governing employment relationships. The distinctions between outsourcing, secondment and co-employment are therefore drawn from the applicable statutory provisions, sector-specific guidelines and the courts’ interpretation of the arrangements before them.

Outsourcing involves engaging an external provider to perform a business function or supply services, whereas secondment concerns the temporary placement of an employee with another organisation. In outsourcing, the provider employs personnel to perform services for the client, creating an arrangement that may also involve the secondment of those personnel. The distinction lies in the subject of each arrangement: outsourcing concerns the provision of services between organisations, while secondment concerns the placement of the employee.³ The Labour Act recognises that an employer may engage a worker for another person’s service, but this does not automatically make the recipient of those services an employer. In Obi v Fidelity Bank, the National Industrial Court held that, notwithstanding the triangular arrangement and the bank’s deployment of the claimant, she remained the employee of the organisation that seconded her during the relevant period.

Co-employment concerns whether both organisations are recognised as employers of the same employee, rather than merely whether they participate in a secondment or outsourcing arrangement. In Ogoloma v Memose International Ltd & Anor, the National Industrial Court found co-employment where the employment terms placed the claimant under the host’s instructions and control and also considered the host’s involvement in the events leading to his dismissal. However, in Luck Guard Ltd v Adariku & Ors, the Court of Appeal applied privity of contract and rejected the alleged employment relationship with the end user because it had not been established by the evidence.⁶ Accordingly, neither secondment nor outsourcing necessarily creates co-employment; the question is whether the contractual terms and evidence establish an employment relationship with both entities, rather than simply that one entity employs the individual while the other receives the benefit of the work.

Responsibility for Employment Decisions and Workplace Duties

Ending the placement

Ending the placement is not necessarily ending employment. The host should communicate its decision to end a placement to the sending employer, rather than leave the employee to infer whether the employment itself has ended. In Okolo v Global Manpower, Globacom[4][5] informed an outsourced worker that it no longer required his services and directed him to report to the supplying company. The court held that the host lacked the capacity, on the facts and documents before it, to issue the operative communication to the worker; the supplier had to address recall and continued employment. It also found the purported termination wrongful and held that the host’s conduct disclosed a cause of action. A host that wishes to end a placement should notify the sending employer, which must then decide what happens to the employment and communicate it properly.

Disciplinary matters

When it comes to disciplinary incidents, the host is usually best placed to investigate an incident occurring on its premises, preserve evidence and remove immediate access where needed. The sending employer should retain the formal decision where its contract gives it disciplinary authority, following the applicable procedure and giving the employee an opportunity to respond. Where, however, the host effectively drives the disciplinary process and determines the outcome, the formal issuance of a query or dismissal letter by the sending employer may provide limited protection. In Sunny Ogoloma v Memose International Ltd & Anor, the National Industrial Court considered the fact that the employee worked under the host's control and instructions and that the disciplinary process was triggered by a report from the host's supervisor. The court ultimately treated the arrangement as a triangular employment relationship, held that the host and sending employer were joint employers, and found that the employee had a cause of action against the host in respect of the disciplinary events that led to his dismissal.

Statutory and workplace duties

Statutory obligations should be allocated operationally, without assuming that an agreement can contract out of them. The Pension Reform Act governs contributions where applicable, and the Employees’ Compensation Act provides a scheme for work-related injury, disease and death. The entity responsible for payroll and registration should be identified; the host controlling the site should maintain safe systems, report incidents promptly to the sender and cooperate in claims. Where both organisations process the employee’s records, the Nigeria Data Protection Act 2023 (NDPA) also requires them to determine their respective data roles and handle access, sharing and retention accordingly. Commercial reimbursement between the companies does not, of itself, answer a worker’s statutory claim.

Drafting Considerations

The secondment letter and the agreement between the organisations should tell the same story. The secondment letter or agreement should clearly allocate responsibilities between the original employer and the host organisation, record the employee’s consent and address the following essential matters:

1. Identify the original employer, host and secondee, confirm the continuation of the underlying employment relationship, and specify the secondee’s role, duties, reporting line and place of work. The agreement should also identify any temporary changes to the existing employment terms.
2. Specify the commencement date and duration, which may be a fixed period or tied to a clearly defined event, such as completion of a project. Provide for extensions by written agreement and identify the role or agreed arrangements to which the employee will return.
3. Allocate responsibility for salary, secondment allowances, pension contributions, tax deductions, leave, insurance and expenses, distinguishing the employee’s entitlements from any reimbursement or service charges payable between the organisations.
4. Identify the applicable workplace policies and allocate responsibility for performance management, complaints, investigations and disciplinary decisions. The drafting should distinguish the host’s supervision and reporting responsibilities from the original employer’s authority to impose employment sanctions, with an agreed procedure for referring alleged misconduct and allowing the employee to respond.
5. Specify who may end the secondment, the grounds and notice required, and the arrangements for handover and return. Clearly distinguish termination of the secondment from termination of employment: ending the placement should not automatically end the underlying employment relationship, and any employment termination should follow the applicable contractual and legal procedure.

Whatever is agreed in documentation must then be followed through in practice. If a host recruits, promotes, appraises, sets pay and dismisses the employee as though it were the employer, a sentence in an agreement describing it as a mere recipient of services will not resolve every claim. Equally, ordinary supervision of daily work does not, without more, rewrite the contract. For employers and executives, the question ‘who is the real employer?’ is best answered by tracing the source of each power, the way it was exercised and the obligation for which liability is alleged. A properly run secondment makes those answers clear before a dispute arises. Any extension or conversion to the host’s employment should require a fresh, documented decision.

Conclusion

A secondment does not ordinarily replace the sending employer with the host. It may, however, give the host responsibilities of its own, depending on the agreement, its conduct and the duty in question. The employee should know who directs the work, who makes employment decisions and what happens when the placement ends. Both organisations should record those arrangements clearly and follow them in practice. Where their documents and conduct diverge, a court will have to determine responsibility from the particular facts and claim.