Moonlighting: Concerns of the employer and Legality in India
Introduction
The Cambridge Dictionary defines ‘moonlighting’ as an act of working an
extra job, typically at night, secretly and without informing the main employer.
Employees usually moonlight to make surplus money, and sometimes to explore and
enhance their skills. Here, one may sight the example of Harpreet Singh Bedi,
from the famous movie ‘Rocket Singh’, wherein the protagonist started
his own secret sales company while continuing work at his existing company!
With increasing advancement of technology, surges in globalization and
other technical complexities, the need of protecting sensitive information,
trade secrets, ideas, databases etc. is felt. Since this practice involves a
threat of leak of data, many employers actively oppose moonlighting.
This became a burning topic only after Wipro Chairman Rishad
Premji equated it to "cheating", calling it a "complete
violation of integrity in its deepest form". While
this has always been a routine practice in the US and several European
countries, the pandemic facilitated its emergence and rise in India, especially
in the Information Technology/ Information Technology Enabled Services
[IT/ITES] sector.
Employer concerns
Moonlighting mainly revolves around the concerns of the employer, their
business, clientele, business partners, database, confidential information,
trade secrets and other stakeholders.
1.
Employers are constantly threatened
by the fact that employees may open up a competing business or engage in jobs
whose goals may contradict that of theirs, or start working for a rival
business. They might also end up disclosing secretive information in the due
process.
2.
Companies are also worried that if an
employee overworks himself, it may affect his productivity at the primary job.
3.
Employees may remain absent at their
main jobs in order to satisfy the needs of the employers at the part time job.
Moonlighting and the Indian Law
The restrictions put on dual employment in India include Section 60 of
Factories Act 1948 and the Industrial Employment Central Rules Act 1946.
Section 60, Factories Act 1948 reads
as under,
‘No 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.
It means that no worker shall be allowed to work in two factories
simultaneously, it however does not cover IT professionals or employees.
Under the Industrial Employment Rules Act 1946,
It is stated that a workman should never work against the interest of
the industrial establishment and should not take any additional employment
which may affect adversely the employer’s interests.
It must be known that there is no specific provision prohibiting moonlighting
in India. The above laws are not meant for IT professionals or supervisors. There
is no codified blanket ban, but there are certain laws that do not completely
approve of this practice. It is very
contract-specific and if the employment contract does consist of a restrictive
covenant such as a single employment clause or non-compete, the employee must
consider that the employer may consider it a violation, as cheating or breach
of contractual terms.
Precautionary Measures to
prevent moonlighting
1.
Revision of minimum wages-
The minimum wages of employees must be kept sufficient enough so they
don’t remain dissatisfied with their pay and look for a second job.
2.
Creating a company policy on
moonlighting-
This shall convey that employees must treat their present job as
paramount, and must not allow anything to interfere with the same. The
employment contract must contain a moonlighting policy that is a negative covenant
that shall stop the employees from working a second job.
3.
Conducting a background check and
ensuring employee satisfaction-
Employers must supervise employee conduct and also their backgrounds.
Regular checks will help prevent fraud risks and will address dual employment
concerns.
Conclusion
Moonlighting is the reality of trade and commerce today and we must acknowledge
it gracefully. It must be recognized that the most successful startup founders
also side hustled and their unicorns were born while they were already employed
in large firms. Even Steve Jobs, a prominent figure, created a competing
company called next, by poaching Apple employees.
Some companies like Swiggy approve of this practice whereas some like Wipro
and Infosys do not. Swiggy was the first to introduce a moonlighting policy in
the favor of employees, whereas Wipro was the one to fire 300 employees because
they were working for multiple establishments at the same time.
It is hence of great importance for the employers to understand the
needs of the employees, run regular background checks and keep them satisfied
during their employment. They must create an open, comfortable and friendly
environment, so that employees do not sneakily engage themselves somewhere
else, and consequently cause trouble to the main employer in various ways
stated previously.
By,
Yugandhara Wakde
Intern Team K&T Forlex
Mumbai | Pune | New Delhi |
Singapore | Shanghai
#Employee #Employer #Supreme Court #Labor #LLPs #ktforlex #law #legal #Corporate
#Cases#Judgements
K&T Forlex Pvt Ltd is an
international business and corporate consultation firm operating from 5 cities
across the globe. You may reach us at www.ktforlex.com or email us at
info@ktforlex.com.
REFERENCES
ARTICLES
1. Out of the Darkness? Moonlighting and Employment Relationships
2. Moonlighting And Restrictive Covenants
https://www.livelaw.in/columns/moonlighting-shops-and-establishment-act-restrictive-covenants-violation-of-employment-laws-210296
3. Wipro
Fires 300 Employees for Moonlighting
4. Swiggy’s
moonlighting policy that allows staff to take up gigs beyond regular job
5.
What is
‘moonlighting’, the practice Infosys warned its employees against
RESEARCH PAPERS
1. A
Review Study on the Concept of Moonlighting and its Impact on Growth of
Organisation
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