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The Moonlighting Dilemma

Moonlighting – the practice of taking up more than one job at a time or having a side hustle along with the primary job – has been another by-product of the Covid-19 pandemic and the work-from-home culture. It is generally done to generate an extra flow of income in addition to the regular pay received from the primary job. A moonlighter may undertake a second job or gig over the weekends or outside their regular working hours, maybe as night shifts or weekend shifts. In few cases, a moonlighter could take up freelance assignments or consultancy work, amongst others, which fall largely outside the employer-employee arrangements of the primary job. A few factors that have given rise to this practice are the increased layoffs and massive bonus cuts during the lockdown, thereby resulting in the employees to resort to alternate avenues or find side hustles to fill the income gap in the otherwise unpredictable job market.

Considering a time where most of the companies are facing high attrition and demand for more flexibility from employees, food delivery platforms like Swiggy and Zomato recently came up with policies that permits dual employment for their employees, whereas several companies in the technology sector like Infosys, Wipro and IBM opposed this practice and termed it as ‘illegal’ and ‘unethical’ while dismissing several of its employees.

Indian law does not expressly define moonlighting or dual employment. However, certain checks and balances are provided under the current regime of Indian labour laws. For instance, dual employment has been regulated under the Factories Act, 1948, and few Shops and Establishment legislations prescribe that the employee may be allowed to work in more than one factory or establishment so long as the employee is not required to work for more than nine hours in a day in total or not more than 48 hours in a week. The Model Standing Orders framed under the Industrial Employment (Standing Orders) Act, 1946 also restrict dual employment and provides that the employees are required to work exclusively for the establishment where they are employed and are restricted from taking up any additional employment that adversely affects the employer’s interest. It is pertinent to note that the Draft Model Standing Orders framed under the upcoming Industrial Relations Code, 2020, however, goes a step further by providing that the employer can permit employees to take up an additional job, assignment with conditions or without conditions, with the prior permission of the employer.

Although the aforementioned labour law statutes contain specific provisions restricting double employment, however, these may be situations wherein such legislations do not apply to a certain establishment/industry, employees fall outside the ambit of these legislations such as those working in managerial or supervisory capacity. In such cases, the employees are primarily governed by the terms of the contract of employment executed with their employers. The prohibition regarding the inclusion of a non-compete clause is laid down in Section 27 of the Indian Contract Act, 1872, which prevents an employee from starting their own business or accepting an offer from a competitor, either during or after the period of employment.

Further, there have been instances of judicial intervention on the issue of moonlighting. The Indian Courts have recognized this practice where the terms of employment stipulate it by imposing negative covenants, or where the employers have consented to the same. In few cases, the Courts have upheld orders of termination of employment where the employee was found to have taken up a second job and, resultantly, had been negligent in their duties towards the first employer. Considering the terms and conditions governing the employment plays a crucial role, the implications could involve disciplinary action, or even dismissal from the employment. Indian Courts have largely held that the prohibition on moonlighting in the contract of employment will not be void under Section 27 of the Contract Act, 1872 given that it is a reasonable restriction to protect the interest of the employer. Thus, moonlighting clause in the contract is enforceable to the extent of reasonability and such reasonability is a question of fact.

So, is moonlighting here to stay and is it the way forward? Well, in view of the above, one can arrive at the conclusion that as per current legislations and judgments in place, unless otherwise specifically stated in the employment agreement, moonlighting is permitted. Owing to varied approaches to the concept and practice of moonlighting, there is a dire need for a uniform law to either approve or disapprove this practice and rather than stigmatising the practice, a culture of transparency in organisations must be created where employees are able to speak up about their side gigs, without being ostracised and employers are able to ascertain that side gigs are not coming in the way of productivity and quality of output.

The information, views and opinions expressed herein are those of the author alone and do not, in any way, reflect the views of HSA Advocates.




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