Contractual Provisions for Success of Secondment under the Indian Contract Act 1872

The success of contract-secondment as a business operation commercially is based on the guidelines defined by the Indian Contract Act, 1872, with sufficient judicial definitions on contract specifics as defined by interpretation between the alleged principles as a master-servant relation. A clear division arises between contracts of service versus contracts for service. 

A contract of service demonstrates clear employer-employee connectivity where the individual works as a fully controlled entity under direct oversight by such employer. A contract for service involves skilled delivery as completed by an independent contractor with no intervention by such employer on delivery processes, as he retains autonomy to execute such service delivery.

A professional on contract-secondment retains employment with the seconder with no intervention by such employer on a daily basis. The courts, with reference to Supreme Court judgment given in February 2020 for Sushilaben Indravadan Gandhi vs. New India Assurance Company Ltd, make it clear that no one specific test can be applied for these contracts. Multiple tests such as control test, integration test, with emphasis on economic reality test, are to be applied for determination on such contracts.

The economic reality test refers to individuals bearing burden of payment for service delivery with economic benefits for such delivery. Organizations approaching for such contract-secondment exercises must take care to define such contract specifics with clear definitions on scope of such agreement for retaining such agreement as temporarily defined. This will also obviate claims of permanent employment in terms of the Industrial Disputes Act, 1947, or the Industrial Employment (Standing Orders) Act, 1946. If there is too much host control over the method of execution, the relationship can fall within the category of a contract of service and thus entail the entirety of the host’s contractual obligations in regard to laborwelfare and benefits.

Professional Ethics and the Advocates Act 1961

The use of temporary legal staffing must also abide by the Advocates Act, 1961 and Bar Council of India (BCI) Rules. BCI ensures that professional ethics are maintained in strict adherence and particularly do not conform with Rule 36 on advertising or solicitation.Specialized secondment services are provided within the ethical playing field through the focus on manpower supply in the legal department instead of litigation solicitation services.

Moreover, Rule 2 of the BCI Rules asserts the prohibition on fee-sharing with any candidate who is not an advocate on any legal business. This means that the providers of the services have to incorporate the structure into professional service solutions and not the other way around as in law firms with split profits with non-legal entities as in the case of the bar association. The area of professionalism with professional privilege in relation to the Indian Evidence Act, 1872 also dictates the treatment of the client by the professional advocate in relation to absolute “confidence.” This ensures that there are proper clauses drawn up in the contract of professional secondment with the same rights as the above. 

A professional with the same rights as before will have a duty of professional loyalty strictly in the interest of the host client during the professional engagement. BCI also released a “media release” in October 2025 on the restriction of the activities of the foreign “lawyers” and “firms” in domiciliation with the bar so that the Indian related foreigners can only practice the laws of the countries of these “lawyers” outside of litigation. This has significant bearing on multi-national companies who would wish the secondment of the group employees in the country of domiciliation of the Indian subsidiaries of the multinationals.

Critical Scenarios of Temporary Legal Staffing

Major corporate deals such as Mergers & Acquisitions or Initial Public Offerings could be another important application of secondment. These situations demand extensive due diligence efforts that surpass the organizational capabilities of the involved firm. There’s a common trend where the involved firm adopts a hybrid model, hiring law firms for advisory purposes, along with seconded counselors for due diligence work done at the organizational level. This ensures that the work gets done under the strict supervision of the General Counsel, ensuring that the organizational requirements are more accurately quantified based on the organizational level of risks involved. Other situations relate to unexpected organizational vacancies or hiring freezes where seconding is the most appropriate organizational strategy for ensuring organizational continuance when the involved firm has a high workload organized around peak times.

Regulatory Compliance & the 2025 DPDP Rules

The greatest organizational demand for seconded legal personnel comes from the The Digital Personal Data Protection (DPDP) Act, 2023, and its subsequent Rules notified in November 2025. The DPDP rules have been able to operationalize the most critical provisions, ensuring that the organizational requirements are fully met as per the rules notified, mandating full DPDP rules-related organizational compliance as of May 2027.

The organizational requirements ensure the appointment of DPDP officers, carrying out independent audits, as well as impact assessment audits every year. The DPDP rules mandate that the processing of user consents requires the organizational design of consent flow systems, as well as managing user notices for the 22 national languages of the nation.

Seconding a data privacy specialist provides the necessary technical and legal skills to build privacy-by-design frameworks and establish breach notification protocols meeting the 72-hour reporting requirement. Significant Data Fiduciaries face even higher scrutiny, including mandatory algorithm risk assessments and the use of Consent Managers. An interim legal counsel can spearhead the creation of response teams and conduct tabletop exercises to validate breach readiness. This temporary but high-intensity requirement makes secondment an ideal solution for organizations that do not require such specialized experts on a permanent basis.   

Operational Workflow and 2025 Labor Codes

The process of legal secondment in Indian laws is now being handled by professionals catering exclusively to handling legal secondment services from beginning to end. This would cover orientation, onboarding, as well as dealing with operational logistics including compliance and salary. The seconded personnel function exclusively within the receiving concern, ensuring confidentiality in their operations and compliance in accordance with organizational protocols. The tenure would be project-specific, varying between a few weeks and several months.

The Labor Codes, including Code on Wages and Code on Social Security, which came into effect on 21st November 2025. These Labor Codes consolidate 29 central Acts and also unify “wages” in social-security contributions, as well as gratuities payable to fixed-term workers.

Conclusion

Successful legal secondment in India is an end result that also marks a paradigm shift in legal operations in Indian organizations. Successful secondment is illustratively dependent on substantial realities of employment and not merely on legalistic technicalities. Through this process of claiming economic employer status based on direct operational control and payroll consolidation, businesses are able to reduce their risks regarding taxation and labor laws.

Moreover, with the imminent date of May 2027 nearing concerning full DPDP compliance, having temporary legal counsel on board has emerged as an important solution concerning dealing with high intensity projects with no heavy overhead expenses on a constant basis. Due to this reason, secondments have been introduced as an appropriate solution for dealing with an increasingly complex Indian environment from a legal perspective by in-house legal teams in corporations.