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Moonlighting: Can a person do private job and business together in India?

Usually when the person is bored from 9-5 job they think of business or some extra income. However often the question comes in mind whether person do private job and business together in India?

Can a person do private job and business together in India?

Usually when the person is bored from 9-5 job they think of business or some extra income. However often the question comes in mind whether person do private job and business together in India? In this blog we are going to discuss in detail with implications.

Lets first understand concept of moonlight vs daylight.

What is Moonlighting ?

Moonlighting is the practice of holding a secondary job outside of one’s regular business hours.

It typically involves individuals who have a primary 9-5 job that serves as their main source of income but who also work additional hours during the evening or at another job to supplement their earnings.

Moonlighting practices can vary depending on the policies of the private company an employee is associated with. Some organizations may have restrictions on employees taking up secondary employment, while others may be more permissive.

Moonlighting Impact

A survey conducted in July by Kotak Institutional Equities in the IT and ITES sector involved 400 respondents, and it revealed that 65% of them were aware of individuals pursuing part-time opportunities or engaging in moonlighting while working from home.

Human resources experts have pointed to moonlighting as one of the factors causing reluctance among many employees to return to the office. In fact, 42% of the survey participants indicated that they would contemplate changing jobs or even resigning if they were not permitted to continue working from home.

Moonlighting cases

Moonlighting has been exemplified through several real cases in India.

Case – 1

One notable case occurred when HR personnel discovered multiple active provident fund accounts belonging to an individual in Bengaluru. Upon investigation, it was revealed that this person was concurrently working seven different jobs.

Case – 2

In another instance, an IT department head at a prominent Mumbai-based firm declined to come to the office despite repeated requests. Suspicions arose when his subordinates noticed that the company’s official email was being used to transmit large files to another organization. A forensic inquiry was initiated, revealing that he had taken on an additional job while still being employed at the IT company.

Case – 3

In a different scenario, a multinational corporation with an office in Bengaluru identified twelve of its coders who were engaged in moonlighting activities. Instead of termination, the company decided to offer them contracts. These coders were required to commit 40 hours a week using new laptops with stricter protocols, but they were also given the flexibility to engage in freelance work.

Reason for moonlighting?

India grapples with a significant perceived skills gap, where 54% of employees strongly or moderately acknowledge the shortage of skill sets in the country.

Furthermore, a staggering 67% believe that their jobs require specialized training. Presently, employers appear to be addressing these skill shortages primarily through methods such as wage increases, recruitment, and automation, with fewer organizations emphasizing upskilling as a strategic approach.

These findings are sourced from PwC’s India Workforce Hopes and Fears Survey 2022. Notably, about 51% of Indian employees stated that their employers do not provide the relevant technical or digital skills training essential for their careers, in contrast to the global figure of 39%.

Is moonlighting ethical?

In the IT sector, employers who provide full-time positions often impose restrictions on moonlighting, regardless of whether it involves a secondary job or a side hustle.

According to this perspective, in a full-time job, employees are expected and obligated to dedicate their entire working hours, efforts, and focus to the employer’s interests.

However, Girish Menon, the Head of Human Resources at Swiggy, takes a different stance. He considers moonlighting as the ‘future of work’ and anticipates that employees will be responsible for disclosing their involvement in additional gigs or projects.

He notes that Swiggy has clearly defined guidelines: moonlighting is permissible as long as it does not conflict with the company’s business, compete with it, infringe upon its intellectual property, or provide a unique advantage due to access to sensitive information or future plans.

Is moonlighting legal?

Legally, there is no all-encompassing law that outright prohibits an individual from holding multiple jobs. Nevertheless, engaging in similar nature jobs may potentially lead to issues related to breach of confidentiality.

Many companies include confidentiality clauses in their employment agreements, along with clauses that prohibit multiple employments.

The rise of remote work has created opportunities for employees to engage in multiple jobs. However, the compatibility of this with individual employment agreements and internal company policies depends on the nature of the work and potential conflicts.

Can Moonlighting Lead to Termination?

Human resources professionals and legal experts assert that courts have, on occasion, upheld the right of employers to terminate an employee’s contract if they are found to be moonlighting. The Factories Act does impose restrictions on holding multiple jobs, but it’s important to note that this law doesn’t apply to IT companies in certain states.

While moonlighting might not pose a significant threat to some employers, it’s crucial for management to remain vigilant for certain signs and consider taking disciplinary action if it begins to affect the company. There are several indicators that should prompt employers to take action:

  1. When moonlighting is explicitly against the company’s policy.
  2. When moonlighting transitions into a more substantial or primary source of employment, known as “daylighting.”
  3. When the second job may involve illegal activities.
  4. When moonlighting starts to impact the employee’s overall productivity.
  5. When there’s a risk of data and confidential information leakage.

How Can Employees and Employers Safeguard Their Interests?

For employees,

  1. it’s crucial to thoroughly review their primary job’s employment contract to ensure it aligns with any moonlighting policies in place before pursuing additional jobs or entrepreneurial endeavors.
  2. Proactive approach ensures compliance with their existing employment agreement.

Employers, on the other hand, should take steps to protect their interests as well. They can achieve this by:

  1. Ensuring that their employment policies, including IT-related guidelines and employment contracts, explicitly outline the company’s position on moonlighting.
  2. Conducting a swift assessment to identify potential warning signs. This involves utilizing specialized techniques and tools designed to detect and report moonlighting-related activities, helping to maintain the integrity of their workforce and protect sensitive information.
  3. To protect their interests and ensure employees dedicate their full time and effort to their current role, employers often employ a tool known as the Moonlighting Clause.

The Moonlighting Clause functions as a restrictive covenant, placing limitations on an employee’s engagement in multiple jobs. Essentially, it prevents employees from taking on additional employment while already working for another employer. Moonlighting, in this context, refers to the act of holding a second job during the hours designated for primary employment. Employers include this clause in employment agreements to encourage efficient work and undivided focus on the present job.

Crucially, the Moonlighting Clause should be incorporated into the employment agreement with the voluntary agreement of both the employer and the employee. This ensures transparency and mutual consent regarding the terms and conditions surrounding moonlighting.

 

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