Dec 13, 2022 17 min read
Moonlighting in Employment
Moonlighting has become todays buzz word in service industry specially IT services industry. The same has become big talking point, especially after getting the news of termination of the services of 300 employees who were working for its competitors as side hustle by one of the leading IT major of India Wipro despite being on regular payroll of the company mentioning integrity violation.
Moonlighting is kind of escape route for the employees from mandane routine work and learning new things while following their passion. However, it is also raising concerns about employee burnout, physical as well as mental health issues since the major purpose of holiday or rest hours are violated in this case.
The entire industry is divided over the policy and argument that moonlighting is unethical and such practices can only have short-term gains. As per various news articles, while major IT companies like Infosys, IBM or TCS has condemned and flagged concerns about the practice. In their official statement, TCS has also informed that moonlighting is an ethical issue and against its core values. Though, they have not yet taken any action against any employee similar to Wipro. On the other hand food delivery companies such as ‘Swiggy’ or fintech company 'Cred' have endorsed such policy of allowing on-payroll employees to take up work or projects apart from their regular employment. Other IT major, Tech Mahindra also have no objection to employees taking up secondary jobs and has supported the idea of side hustles.
Even the Minister of State for Skill Development, Entrepreneurship, Electronics and Information Technology, believe that there’s no problem with employees involved in dual employment. As per his opinion, this is the age of
employee-entrepreneurs and companies must now understand there has been a structural shift in the minds and attitudes of the young Indian tech workforce. He also said that the days when employees signed up with big tech majors and spent their lives on the job were long gone.
So, what is Moonlighting?
Moonlighting refers to the practice of certain employees with full-time job or having a employment contract with them takes up a side job may be freelancing work or something similar. The moonlighting concept allows workers of a company to take up alternative jobs apart from their primary job to earn some extra money. Post pandemic world, present remote work culture in many organizations has definitely helped employees to take up this practice for financial gains.
Moonlighting – A new concept?
Do we mean that these practices did not exist in pre-pandemic era? The answer is no. Many employers in earlier days also faced same issues. One of Delhi based news article published earlier mentioned that as per vigilance report some PF staffers were moonlighting for private sector and they were caught by the officials.
In the year as early as 2012, the Madras High Court held termination of one employee as valid when he was found to be employed as a director of another company. In another case, in the year 2016, the Punjab and Haryana High Court held that terminating the employment of a driver who was engaged in double employment as completely valid.
What is driving employees for Moonlighting?
Experts mention that the first thing that drives employees is definitely the compensation and financial benefit they are getting out of it. For the last 10 years we have not seen much improvement in compensation package of entry level
executives in software industry. Presently, due to availability of proper technology and know-how of the market, employees are seeing moonlighting as easy way of earning well.
Since, the gig economy has opened up, and there are various gig platforms available globally where one can register and work for anybody around the world with handsome amount for short duration projects. If we cite example of Indian techie, they can get paid in dollars and earn more and that makes this practice more attractive.
The overnight US shift to remote working did away with long commutes and brought flexi time facility. So the techies got extra time in their hand to spend which they utilised effectively by involving in smaller side projects and earn extra income.
IT professionals shared that when the pandemic struck, various projects related to digitization initiatives were up for grab e.g. website development to app creation etc. Being short duration one-off projects, these were taken as quick ways to supplement income. The techies opting for such side jobs did not see it as a direct conflict of interest since these are not full-time engagement and they normally work on these projects as side hassles.
The technology requirement in IT industry is ever-changing. One has to master the practical know-how while entering to the market as job seeker. Employment opportunities come to the individual with better experience in certain niche technologies in demand. Though, in full time job in maximum cases employees work on mostly old technologies or there are minimul opportunities provided to employees to learn new technologies as per their choice or market demand. So, employees tend to utilise their free time in gaining experience
in niche technologies or learning new tools. Having experience on these fields has obvious added advantage in competitive job market. So through these side hassles employees gain hands-on experience on these technologies or tools or platforms which otherwise is not available to them in their present job.
Moonlighting and Labour/Employment Laws in Different Sectors:
As of now, there is no better clarity in the employment contracts and no prohibition under the Indian employment law, except under the below mentioned labour acts.
Section 60 of the Factories act 1948 imposes restriction on double employment and mentions that no adult worker shall be required or allowed to work in any factory on any day on which he has already been working in any other factory, save in such circumstances as may be prescribed.
The definition of ‘worker’ under section 2 (s) of the Industrial Disputes Act 1947, also mentions that any person employed in any industry to work for a reward, whether the terms of employment be expressed or implied. In this context, at the one hand it is implied that employer has to take care of the wellbeing of the employee and on the other hand employees also required to provide his complete devotion to duty.
Industrial Employment Standing Order Act, 1946 also binds employees with the employment condition of employer during their full tenure nature of job. Section 8 under Schedule I-B of the Industrial Employment (Standing Orders) Central Rules, 1946 states that employees should not work against the
interest of an industrial establishment by taking dual employment in addition to their normal routine work.
In addition various Shops and Establishment Acts of the states also lays down relevant provisions regarding dual employment. As example, section 9 of the Delhi Shops and Establishment Act 1954 states no person shall work about the business of an establishment or two or more establishments or an establishment.
The relevant section of Factories Act is only applicable to employees working in Factories covered under the act. So, companies that are not covered by the Factories Act must specify the rules or related to double employment by way of inserting proper clause in the appointment letter or employment agreement or offer letter.
As per present practice, the below mentioned clause as general practice is signed by employees of private sector as a part of their Offer of employment or the employment agreement: ‘During your employment with the Company, you shall not, without the Company's prior written consent, directly or indirectly employ or engage with any other person, business or entity, whether or not for any gain or profit, irrespective of whether it is during or outside your hours of work in the Company. Additionally, you are not allowed to undertake any other gainful employment, engagement, business, assume any public office or private office, honorary or remunerative position, without prior written permission of the Company.’
It is understood, if employment letter mentions that he is under full time employment agreement, then even in case the person
is not working for the company during off days or beyond working hours and is giving that time to another organisation, that can be termed as a breach.
Rule 15 of Central Civil Services Conduct Rules 1964 prohibits employees to take private trade or employment. It mentions, ‘Subject to the provisions of sub-rule (2), no Government servant shall, except with the previous sanction of the Government-(a) engage directly or indirectly in any trade or business, or (b) negotiate for, or undertake, any other employment…’.
The service conditions in Public Sector Undertakings normally governed by Conduct, Discipline and Appeal Rules and it prohibits employee through inserting following clause – ‘No employee shall, except with the previous sanction of the Competent Authority, engage directly or indirectly in any trade or business or undertake any other employment. Provided that an employee, may without such sanction, undertake honorary work of a social or charitable nature or occasional work of a literary, artistic or scientific character, subject to the conditions that his official duties do not thereby suffer; but he shall not undertake or shall discontinue, such work if so directed by the Competent Authority’.
Various guidelines related to Vigilance are also acting a major role for preventing dual employment or income of any Public Sector employee. Employees are mandated to declare their income beyond certain permissible amount as part of their employment condition with transparency, thereby upholding vigilant practices inside the organisation.
According to various employment surveys there is a huge gap of employees actually employed in India and their coverage in various social security schemes including PF. There are certain issues of pay parity and long hours of work among the employees working under various employers. For coping up the situation arising out of inflated economy a certain part of the employed individuals are taking up the option of dual employment or moonlighting.
However, this is also raising concerns among the employers about data security and safeguarding proprietary information. The employees should not indulge in such practices which can breach the confidentiality. Being transperant organisation, employers should create such culture of openness that they can easily sit with their employees and have candid conversation about upholding the interest of their employees be it working in niche technology or playing guitar in a music band. When required the moonlighting clause or conflict of interest clause should be added and signed with the free consent of both the employee and the employer.
According to one survey conducted by the author through social media platform, 47% respondent desire that moonlighting should be allowed when it doesn’t violate the data confidentiality of his employer or there is no conflict of interest involved. On the contrary 38% respondent thinks that moonlighting is actually cheating your present employer. In this post covid era, since most of the companies are again returning to normalcy and calling their employees to work from office, it would be difficult for the employees to moonlight.
However, implementation of modern age concepts like four day work schedule may raise concern among the employers. There
is also need of specific employment laws on the matter. It is expected that in near future more clarity and transparency will brought in to reduce disputes and maintaining congenial IR environment.
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