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Is moonlighting legal or just a new trend of fading employee commitment?

Let's take a look at why employees are choosing to moonlight and what employers can do to prevent it

Published: Sep 23, 2022 11:14:00 AM IST
Updated: Sep 23, 2022 11:26:29 AM IST

Is moonlighting legal or just a new trend of fading employee commitment?Moonlighting may be an escape route to avoid disengagement, learn new things, and develop your passion while remaining competent and productive is essential Image: Shutterstock

The IT industry has woken up to the buzz of moonlighting which Rishad Premji, Wipro's executive chairman, termed as cheating by employees. This article throws light on why employees are doing so and what employers can do to prevent it, apart from the behavioural and legal aspects of this dual employment.

A person holding more than one job outside the normal working hour without the knowledge of the principal employer can be defined as moonlighting. This might be to add up to your income or keep yourself meaningfully engaged or make the best utilisation of your talent and passion. It’s a regular practice for doctors consulting beyond working hours, teachers engaged in coaching, consultants and freelancers working for multiple firms, and employees getting involved in artistic creative forms such as volunteering, music, singing, drama, theatre, social media content creation and so on. However, the problem comes when you are working under two formal legal contracts and working for your rival company as well.

Though India has a large informal sector, an estimated 6.59 crore employees covered under the provident fund portrays a sorry picture of more than 40 core people in formal employment. This shows how employers are apathetic toward the basic social security needs of the employees. Hustlr CEO Daniel Abrahams in a post had rightly pointed out, “Stop calling your company ‘a family’. Parents don’t fire their children for poor performance or lay them off to cut household costs when they’re struggling to put food on the table.” In the past year, several organisations across industries witnessed large-scale downsizing—that included global conglomerates like Meta, Tesla, Ford, Twitter, Netflix, and Cognizant. The worst form of termination was also experienced when the CEO of Better.com fired 900 employees over a zoom call. Google has also threatened a bloodbath, leaving the employees in fear about their future. How does the employer expect employees to remain committed in an environment of fear and low trust? The commitment must be mutual which also builds the foundation of ethical obligations. Employers, particularly the HR leaders, have turned blind and have converted the retrenchment to performance-based voluntary resignation by denying legal compensation as per the law. Such an environment has sown the seed of breach of commitment and encouraged employees to take up dual employment.

Moonlighting is not completely prohibited under the law in India. Section 60 of the Factories act 1948 prohibits the double employment of adult workers in factories. As per section 2 (s) of the Industrial Disputes Act 1947, or section 2(zr) of Industrial Relations code 2020, the definition of ‘worker’ means any person employed in any industry to work for a reward, whether the terms of employment be expressed or implied. Though many employers express the contract of employment prohibiting dual employment, including debarment of joining the competitor, not to work for another employer during your allowed rest time when the employee is expected to take care of the physical and mental wellbeing and return to work to remain productive, is implied terms of employment. When a service certificate is issued to an employee as per the Industrial Employment Standing Order Act, 1946 (which also covers the IT and ITES sector) infers that such employee was gainfully employed with the employer from the start date of employment to the end date of employment, not eight hours in a day. Section 65 of the Bombay Shops and Establishment Act, 1948 also prohibits double employment that neither the employee will work, nor any employer will permit the employee to work in any establishment when the employee is on leave or given a holiday. Similarly, Section 9 of the Delhi Shops and Establishment Act 1954 states that no person shall work about the business of an establishment or two or more establishments or an establishment and a factory above the period during which he may be lawfully employed. In the case of Gulbahar vs Presiding Officer Industrial Tribunal (2016), the Punjab-Haryana High Court upheld the dismissal of the petitioner on the ground of dual employment. Similarly, a Delhi District court upheld the dismissal of the employee under dual employment in the case of Metso Paper (India) Pvt Ltd vs Mr. V. Gokulakrishnan on 6 September 2019.

Also read: Should IT companies make peace with moonlighting?

Moonlighting may be an escape route to avoid disengagement, learn new things, and develop your passion while remaining competent and productive is essential. While moonlighting can take a toll on the physical and mental health of employees, leading to burnout, the very purpose of rest hours, holidays and leave is lost. It will also be threatening for the employer to lose the knowledge, data and technology to the competitors.

While companies like Swiggy have come up with a moonlighting policy allowing employees to moonlight in a role which does not have a conflict of interest and does not impact productivity, it may be a new dawn for future employment. Companies may create an exclusive clause for the prohibition of moonlighting as per the employment contract and incorporate the conflict-of-interest clause but legal restriction without trust and engagement can’t yield results.

Manoranjan Dhal, Professor – OB and HR, Indian Institute of Management Kozhikode.

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