Understand the potential consequences of going against a company clause prohibiting moonlighting and seek professional advice before engaging in such activities.
Overview:
Moonlighting refers to the practice of working a second job or starting a side business while still employed at one’s primary job. In India, Concept of Moonlighting is not illegal and is common in certain industries where individuals may work multiple jobs to supplement their income.
However, employees should be aware of the potential consequences of moonlighting, such as conflicts with their primary employer, conflicts with the company’s non-compete agreements, or even the possibility of termination if their secondary employment interferes with their primary job responsibilities.
It is important for employees to inform their primary employer about any secondary employment and to ensure that their secondary employment does not conflict with their primary job responsibilities or the company’s policies. Additionally, employees should ensure that their secondary employment does not cause any harm to their primary employer or their employer’s business interests.
Concept of Moonlighting-Is Moonlighting Illegal in India?
While Concept of Moonlighting is not illegal in India, it is important for employees to consider the potential consequences and to act in accordance with their primary employer’s policies and non-compete agreements.
Employees need to be cognizant of the potential drawbacks of holding a second job or starting a side business while still employed in their main job, such as facing conflicts with their primary employer or even being let go if their secondary employment interferes with their primary job duties. It is crucial for employees to keep their primary employer informed of any secondary employment and make sure that it does not clash with their primary job duties or their employer’s policies.
The Legal Status of Holding a Second Job in India
In India, the legality of holding a second job, also known as moonlighting, as mentioned before is governed by various labour laws and regulations. Generally, it is legal for an individual to hold multiple jobs, but there may be restrictions on working hours and the type of work that can be performed, as well as tax implications. It is advisable for individuals to check with their primary employer and seek professional advice to understand the specific laws and regulations regarding Concept of Moonlighting in India.
Also, an important point to keep in mind is the company contract which you sign in the beginning of your employment. If there is a clause that says, no freelancing has to be done, then moonlighting is a wrong-doing from the employee’s side.
Consequences of Going Against Company Clause of Moonlighting
The consequences of going against a company clause prohibiting moonlighting can vary depending on the specific terms of the contract and the laws applicable in the jurisdiction where the employer is based. However, some common consequences include:
- Disciplinary action: The employer may take disciplinary action against the employee, which may include a warning, suspension, or termination of the contract.
- Legal action: If the breach of contract happens, the employer may choose to take legal action against the employee.
- Damages: If the employer can demonstrate that the employee’s moonlighting activities have caused harm to the company, they may be able to claim damages.
- Reputation damage: Going against a company clause can damage the employee’s reputation and may have negative consequences for their future employment prospects.
It is important to note that the specific consequences of going against a company clause prohibiting moonlighting will depend on the laws and regulations applicable in the jurisdiction where the employer is based, and the terms of the employment contract. An employee should seek legal advice before engaging in Concept of Moonlighting activities if their employment contract contains a clause prohibiting such activities.
Judgements of Court Regarding Moonlighting in India
Over the years, Indian courts have dealt with numerous cases related to moonlighting. Generally, courts have upheld the employer’s right to terminate an employee for breaching trust, as seen in cases like Jitendra Nath Biswas v. Steel Authority of India Ltd and State of Punjab v. Ram Lubhaya Bagga. These rulings emphasise the need for employee permission for secondary employment and the potential disciplinary action if it interferes with the primary job.
These situations pose risks to industries, necessitating proper procedures to protect company interests. Indian courts have recognised non-compete clauses in employment agreements and laws safeguarding intellectual property and confidentiality. Enforceability also extends to reasonable non-solicitation agreements
Companies should outline permissible activities during non-working hours in employment contracts and specify if the role demands exclusivity. Robust contracts and HR regulations are crucial to articulate employment conditions, including duties, limitations, and defining what constitutes misconduct leading to disciplinary action.
Moreover, when contracts feature non-compete and exclusive employment clauses, which are common in conventional contracts, engaging in moonlighting might be seen as unethical. Employees might not perceive it as a breach of trust if the contracts lack such clauses or include exceptions.
Why Do Employees Moonlight And & Why Are Companies Upset?
Even though the possibility of earning more money is always enticing, there are other reasons why people look for other employment opportunities. Some people do it out of passion, while others do it out of boredom. A fast Google search reveals a plethora of small and startup companies offering options for part-time work. Thanks to job portals and online tests/interviews, people have found it very easy to take on additional employment.
First things come first. Money is crucial! Getting a side gig is always a profitable way to boost your earnings. People’s finances have been strained as a result of job and wage reductions, general stagnation, and the pandemic. Another was the fear of losing one’s job. To boost their income or pay off debt, some people have started side businesses. Another is the desire to continue working at one’s primary job while pursuing their passion. IT professionals may also possess talent in unrelated fields like writing or music that are unrelated to coding, programming, testing, and similar tasks. Before working from home became commonplace, having more time was considered a luxury, but it gave them the opportunity to explore interests they had always had. Flexible work schedules made it easier for people to divide their time between two jobs. Working on more projects may be motivated by the desire to launch one’s own company.
However, employers fear that if workers perform two jobs concurrently, their output and quality of work will suffer. Furthermore, there’s a chance that working toward two deadlines will stress you out more than one, which could lead to a lower-quality or smaller output. Fatigue is a further drawback of taking on a side gig, which can lead to carelessness and distraction. Concerns regarding data and confidentiality breaches are common among employers, especially when an employee works closely with a direct competitor. Another issue is the possibility that employees will exploit company resources for a side job.
How to Check If an Employee is Moonlighting?
Employers can use an employee’s Employees’ Provident Fund (EPF) Universal Account Number (UAN) to determine whether they are working for competitors or moonlighting. Employers can find out if two PF contributions are being made by separate companies by obtaining an employee’s UAN number. It is obvious that employees are moonlighting when two PF contributions are made to a UAN at the same time. When an employee takes on extra work as a consultant, freelancer, or part-time worker, it can be difficult to prove that they are moonlighting because their employer does not contribute to their PF account.
Latest Updates on Moonlighting Policy by Companies
The moonlighting debate is heating up! While Infosys and TCS remain firm against dual employment, a shift is brewing. Tech Mahindra plans a lenient policy allowing side gigs (with conditions), and other service firms are consulting experts to navigate potential conflicts. This flexibility reflects the growing trend of IT workers seeking additional income and skill development. Expect more customised policies, balancing company interests with employee aspirations.
Section 60 of the Factories Act 1948 and Concept of Moonlighting
Section 60 of the Factories Act, of 1948 is related to the regulation of working hours for employees in factories in India. The section provides for the maximum number of hours that a worker can be required to work in a day and in a week, and sets out requirements for the maintenance of records of working hours.
In terms of moonlighting, the provisions of Section 60 of the Factories Act, of 1948 would apply to employees working in a factory who are also engaged in moonlighting activities. For example, if an employee is working in a factory for 8 hours a day, they would be limited to working a maximum of 48 hours a week, as provided by the Act. This would include the hours worked in the factory and any additional hours worked at a second job (i.e. moonlighting).
Conclusion
In conclusion, Concept of Moonlighting, or holding a second job, is generally legal in India, but it is subject to various laws and regulations, including those related to working hours, the type of work that can be performed, and tax implications. An individual should check with their primary employer and seek professional advice to understand the specific laws and regulations regarding moonlighting in India. If an employment contract contains a clause prohibiting moonlighting, the employee may face disciplinary action, legal action, or damages if they engage in such activities. The specific consequences will depend on the laws and regulations applicable in the jurisdiction where the employer is based, and the terms of the employment contract.
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FAQs
Is moonlighting justified for the Indian workforce?
Can depend on salary, career goals, and financial needs. Many seek extra income or skill development.
Is moonlighting ethical or legal?
No specific law against it, but ethical concerns exist (conflicts of interest, confidentiality). Check your contract and company policy.
Is freelancing considered as moonlighting?
Can be considered moonlighting, depends on nature and involvement. Transparency with your employer is key.
Can I be fired for moonlighting?
yes, Possible if moonlighting violates your contract, impacts performance, or harms company interests. Open communication can help avoid it.
