Introduction to moonlighting
The concept of moonlighting has become a major talk of the corporate town, and with the recent take of Mr. Sandip Patel, MD, IBM India, we get a hint of this trend gaining momentum amongst the peers in the tech industry. He dissuaded employees from siding with moonlighting if the interests of the company are at stake. He emphasized on following the due process, if at all, employees wish to take up side jobs but his internal note terms moonlighting as a violation of trust, policy and creates a potential conflict of interest. It is clear from his views that companies really have important concerns and are finding themselves at the cross-roads although there might be the necessary bending going on, on the inside to accommodate the interests of both the employers and the employees.
With the advent of the global pandemic, the world has come to the realm of an alternate understanding of work by working from home. However, this also accelerated the trend of taking up side jobs additionally to supplement their income by mostly working in the night shifts or weekends. That is from where the concept gets its name.
Now let us understand what exactly is moonlighting.
Moonlighting is the practice of working for one company while concurrently taking on additional duties and employment for ancillary earnings, usually without the employer’s knowledge.
Is moonlighting ethical?
On one hand, Wipro has terminated its 300 employees alleging that they were moonlighting since the company officials has declared that moonlighting is a complete violation of integrity. Meanwhile, various companies like Swiggy, Infosys and Tech Mahindra have positively favored the trend with plans on preparing a moonlighting policy for regulation, with Swiggy already done with its process, allowing its employees legally, to take up an alternate job.
Notably, Mr. Rajeev Chandrasekhar, the union minister of State for skill development and entrepreneurship of India, also supported it by opining that there has been a shift in the attitudes and outlooks of the young tech workforce.
The opinion on whether this concept is ethical and acceptable is divided, however, the law is pretty much clear on where moonlighting stands in the industry.
Ethical standpoint
The moonlighting policy has brought into light the question of ethics and there is no one single correct answer. A good number of employees as well as employers call it a need of the hour because the times are changing and flexibility in employment needs to be accepted. Today’s workforce is ready to multi-task and explore various horizons. With this interpretation, there is no question of ethics since the objective of a side job is entirely driven by factors like extra income and job satisfaction and such. Additionally, it seems unfair to meddle with employees’ privacy, as it is unjust to control their conduct 24*7 by keeping a tab on their time exclusive of the office hours.
Another lot that mostly entirely consists of the employers of the industry, considers it unethical. Wipro Chairman, Rishad Premji, simply termed moonlighting as ‘cheating’. Their driving concerns cannot be easily denied since they consist of cross-leveraging of confidential information of the company, weakening productivity, working for competitors leading to lack of faith in the employees, violation of non-compete and other such covenants that form part of the employment contracts. However, Mohandas Pai disagrees with Premji on this matter. The former Infosys director does not regard working a second job as ‘cheating’.
Meanwhile, Mr. Gurnani, MD, Tech Mahindra, said that his company will definitely “create a policy” allowing employees to publicly hold down two jobs at once. “Sure, if you want to do it. However, be honest about it and let us know”. This is a clear effort to pave a mid-way in between the chaos that moonlighting has caused.
Legal stance in India
The laws in India provide no definition for moonlighting nor do they provide any express regulations for the same, however, there are provisions that touch upon the concept of dual employment.
Section 27 of the Indian Contracts Act, 1872 puts a restriction on the commonly practiced non-compete
clauses in the standard employment contracts in India as it declares void, any agreement that restrains a person from exercising a lawful profession, trade or business of any kind. Thus, anti-competition clauses to restrict employees from working with a peer organization have been constantly denied enforcement by Indian courts due to voidability as well as their being against the public policy. It is interesting to note that Courts have started to give some regard to such clauses basis their reasonability.
However, Section 8 ,under Schedule I-B of the Industrial Employment (Standing Orders) Central Rules, 1946, clarifies that a workman cannot work against the interest of an industrial establishment by taking dual employment in addition to their current job and Section 60 of the Factories Act, 1948 bars any adult worker from getting engaged in dual employment except in certain circumstances that may be prescribed by each State government. State specific laws like Delhi Shop and Establishment Act, 1954 also bring up double employment by restricting it in Section 9 of the Act where it prohibits employment in more than two establishments in excess of the period during which the employee may be lawfully employed under the Act.
Apart from these legal enactments, a major concern is the violation of employment contracts that exist between the employers and employees. Generally, employment contracts have restrictive and negative covenants like individual employment and confidentiality clauses and any contractual violation attracts a liability on the employee. This would be a legal repercussion that the violators would be burdened with if moonlighting is practiced by breaching the contractual terms.
If we look at moonlighting with the intent to include it in the employment contracts by regulating the manner in which employees could exercise it, it is possible since no legislation in India specifically addresses the same or declares it illegal. It is for the employers to strategically pave middle ground whereby protective clauses for the organizations do not become hindrances for the employees seeking a supplemental source of income at the least.
Let us plunge into how the courts have dealt with the issues pertaining to the concept of moonlighting in India.
Judicial Precedents
In the case of Niranjan Shankar Golikari v. the Century Spinning and Manufacturing Company Ltd., the Honorable Supreme Court observed that the restraint and negative covenants of employment contracts may be valid if they are also reasonable.
In the case of Gulbahar v. Presiding Officer, Industrial Tribunal and Others, the Respondent Management hired the Petitioner as a driver, however it was later discovered that the Petitioner was also employed by M/s Top Wheels Tours and Travels Private Limited. Consequently, the Respondent dismissed the Petitioner from the position. The Punjab and Haryana High Court held that the termination of the Petitioner from his employment because he was engaged in dual employment was completely valid.
It is evident from the aforementioned legal decisions that the judiciary also opines that moonlighting aka dual employment is not permissible and validly terminable.
Conclusion
The concept of moonlighting, from the ethical light has backing in agreement as well as disagreement. From the legal lens, India has not prohibited moonlighting in its legal provisions, thus, opening doors to methods by which regulations can be drawn and a middle ground can be sought. The best practice would be to add a ‘Conflict of Interest Clause’ and an exclusive ‘Moonlighting Clause’ in the employment agreement but there needs to be trust and engagement in addition to drawing legal limits to get the intended results.
In view of the ongoing discussions over moonlighting, the need of the hour is for the government to do its bit and develop a policy on moonlighting as part of the new labour regulations and/or take steps to settle the laws to bring clarity on the regulation of activities that have been taking place secretively since a long time, in the shadows.
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