Introduction
As work-from-home and hybrid working have become more common, employees have found that they are more comfortable managing and engaging in activities besides the specified work obligations that serve as their primary source of revenue. “Moonlighting” is the term used to describe the practise of employees working additional or many jobs (as contractors, consultants, gig workers, part-time employees, or even full-time employees). Employees moonlight for various reasons, including job uncertainty, making extra money, or pursuing a passion or interest.
While the idea of moonlighting is not new, it is now more prevalent than ever due to the flexibility that working from home provides but it has emerged to be a pressing concern for employers, particularly in the IT/ITES industry. According to a recent poll by Kotak Institutional Equities, of 400 individuals working in the IT/ITES industry, about 65% of the respondents were aware of people who were seeking opportunities outside of their principal employment. Employees who moonlight are those who work for a company full-time but also take on additional jobs, usually without the knowledge of their employer. Following the COVID-19 epidemic and the work-from-home concept, there was a spike in moonlighting in India, particularly among those employed in the IT sector. Employees of IT companies who moonlight is not subject to any laws. Employees of a company are not allowed to hold dual employment under Indian labour rules. Employees in the IT sector are not covered in the category of workers, nevertheless before starting employment, IT employees have to agree to the terms of their offer letters, which bind them. Numerous employers include in their offer letters that an employee must not hold down two jobs at once or should refrain from doing so while employed by them. In such circumstances, employees shouldn’t turn to moonlighting or they may be removed from their jobs
What does the legislation say regarding moonlighters?
Dual employment is not specifically defined or addressed in Indian law. On the other hand, Section 27 of the Indian Contract Act, 1872 forbids the addition of a non-compete clause. An employee is prohibited from starting their own business or accepting a job offer from a rival by such a clause. The employee is ultimately prevented from competing with their company, leaking data, or doing either during or after the employment period. In light of this, it might be said that accepting dual employment is against the terms of a contract with employment’s non-compete clause. The stance of Indian law on this matter isn’t entirely clear, though. Dual employment is allowed under the Industrial Employment (Standing Orders) Act of 1946. The Factories Act of 1948, however, forbids multiple work. IT firms have, however, been exempted from this rule in some jurisdictions.
An adult worker is not permitted to work in more than one factory on any given day under the Factories Act of 1948 (Factories Act), which is solely applicable to manufacturing establishments, unless the total number of hours worked falls within the 9-hour daily working hour limit. A worker is not prohibited from providing services (beyond 9 hours) at any other establishment that is not a manufacturing firm by such a restriction. However, “ethical moonlighting” is permitted under the draught Model Standing Orders for Manufacturing and Service Sector Establishments prescribed under the Occupational Safety, Health and Working Conditions Code, 2020 (which, once put into effect, would, among other things, repeal and replace the Factories Act). This allows employees to take on additional assignments that are not detrimental to the primary industrial establishment
According to the Delhi Shops and Establishments Act of 1954 (S&E Act), which applies to non-manufacturing establishments, a worker is not allowed to work for more than one employer within the allotted daily working hours. The S&E Acts of Andhra Pradesh, Telangana, and Madhya Pradesh have provisions that forbid employees from working two jobs on a holiday or a day when they are on leave. As a result, the limitations imposed by the current labour regulations primarily only apply to the number of hours that an employee can work each day and do not apply to the number of clients they provide services to. Additionally, the limits only apply to those who are “employed” by more than one company; supplementary engagements are not prohibited.
The Indian Perspective
India is divided over whether it should be legal to moonlight. Moonlighting has been associated with “cheating” by some of the top IT companies, and these companies are prone to take strong action against employees who accept outside engagements. Multiple employees were fired due to moonlighting after one IT major took serious action. In striking contrast, several young organisations have embraced the idea of moonlighting and have also created policies to specify criteria for “ethical moonlighting”. One such policy stipulates that “any project or activity that is taken up outside of office hours or on the weekend, without affecting productivity, and does not have a conflict of interest” may be picked up by the employees. The employee must disclose certain information to the appropriate designated authorities so that the primary employers are in the loop.
Moonlighting may be permitted as long as no contractual duties are broken, especially in the IT sector, according to the Union Minister of State for Electronics and IT and Skill Development. This is a significant development that reflects the government’s position.
The perspective of the USA and the UK
Due to the growth of the internet platform economy, alternative job arrangements are now significantly more prevalent in the United States. Self-employment and proxy employment are widespread in the United States. Using proxies to attend interviews and report on work assignments as well as holding multiple hourly jobs as self-employed individuals in different companies have also been documented. Due to self-assessment and voluntary reporting, such work arrangements are legal in the US and even lead to simplified tax assessments. According to empirical research on “understanding alternative work arrangements” conducted in the US and released in 2019, American economists Lawrence F. Katz and Alan B. Krueger found that the percentage of people who hold several jobs increased from 39% in 2013 to 77% in 2018. The information they gathered from the administrative tax division also shows that the majority of the workforce is made up of contract workers, on-call employees, independent contractors, and temporary help agency employees.
The Way forward
Companies must specify which employee activities they intend to approve during non-working hours. The employment contract should specify if the position is exclusive. Businesses should also think about implementing strong employment contracts and HR policies that spell out the conditions of employment, including the duties and constraints that apply to employees as well as what would be considered “misconduct” and call for disciplinary action. To ensure that the employer’s actions are upheld by the courts, they must be fair and reasonable. Additionally, if an employee’s contract contains non-compete provisions and exclusive employment, as is the case with the great majority of conventional employment contracts, moonlighting may be regarded as unethical. The Employers should also directly keep an eye on an employee’s productivity who has additional pursuits and measure any decline in that employee’s output. Employers may be able to assure that allowing moonlighting won’t harm their operations or workers’ productivity in this way.
References
https://news.cleartax.in/know-all-about-moonlighting-in-india/8584/#:~:text=There%20is%20no%20legal%20framework,they%20accept%20before%20joining%20work.
https://www.scconline.com/blog/post/2023/01/24/moonlighting-breach-of-loyalty-or-a-restriction-on-freedom/.
https://theleaflet.in/legal-positing-on-moonlighting-in-india/.
https://www.thehindubusinessline.com/business-laws/what-the-law-says-on-moonlighting/article65988804.ece#:~:text=Indian%20laws%20do%20not%20define%20’moonlighting’.,been%20working%20in%20another%20factory.
https://www.legalserviceindia.com/legal/article-9591-moonlighting-dual-employment-in-indian-law.html.
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