Moonlighting: Meaning, Benefits and Challenges – Explained, pointwise

Introduction

The issue of Moonlighting has witnessed an intense debate in the recent times. Wipro became the first major IT firm to sack over 300 employees for ‘moonlighting’ and took a very tough stance against staff who worked a second job outside their normal work hours. On the other hand, some IT companies and corporates have taken a more considerate view. Overall, the opinion is divided, some companies consider it unethical, some other deem it as a necessity.

What is Moonlighting?

Moonlighting refers to the practice of working on a second job outside of regular work hours for extra income. It may include taking up multiple assignments, projects, or gigs in addition to the one’s main job with a principal employer. The additional job/assignment is generally taken up for additional supplemental income.

Moonlighting is not defined under any statute in Indian employment laws. It is not necessarily the same thing as dual employment, which refers to a formal relationship between an employer and an employee and includes a number of legal responsibilities such as a minimum wage, provident fund, gratuity etc. It could also mean a second way to make money, like a side business or freelancing, that the main employer may or may not know about.

Many companies have clauses in their employment contracts which explicitly prohibit taking up of additional assignments, especially with rival firms in the same field/sector. However, this aspect has largely been neglected in most employment contracts, hence Moonlighting has remained in the grey zone.

What factors have enabled Moonlighting?

Flexible Work Hours: Work From Home (WFH) approach was adopted amidst the COVID-19 pandemic. The approach has continued post-pandemic with many firms offering flexible work hours to the employees. With the constraint of physical presence in offices removed, many employees get the opportunity to work in alternate jobs.

Technology: Technological tools like online video conferencing, cloud sharing, online workspaces (allowing sharing of information/documents) have enabled remote working. This facilitates moonlighting as the employees need not physically shuttle between different work locations.

Gig Economy: Gig economy involves part-time hiring of workers. Employment terms of gig workers are much more flexible because of part-time work. So Gig workers can take up multiple jobs.

Digital Economy: Digital economy has opened up numerous avenues of new opportunities. Many people work part-time as social media influencers after office hours. An Analyst working with Barclays Bank developed a new App (under45.in) during the COVID-19 pandemic which alerted the users whenever new slots for booking for vaccination were available on the COWIN platform.

According to a management consulting firm Zinnov, smart and ambitious employees have higher probability of engaging in Moonlighting activities. Content and average employees are least likely to engage in Moonlighting.

Source: Zinnov Management Consulting

What are the arguments in favour of Moonlighting?

Financial Benefits: Moonlighting allows people to earn additional/supplemental income. This helps them to meet their financial obligations and improve their living standards.

Up-skilling: Moonlighting can provide new learning and skilling opportunities e.g., under45.in was developed by a programmer who wanted to learn new programming skills and worked on this initiative after his regular work hours. Up-skilling can help in job security as high-skilled workers tend to be the last ones to be laid-off during economic downturns.

Expanding Opportunities: Taking a second job can expand the opportunities for workers. Many people who have been working for the same employer for many years can suffer from tunnel vision i.e., unable to see beyond their own industry and their own role in the company. Taking on a new job can provide fresh new perspectives and introduce workers to a new industry.

Learning about a new industry can also provide workers with expanded opportunities for additional employment.

Building a Better Network: A second job provides the opportunity to expand network of colleagues and business associates. A strong network helps in future employment opportunities.

Longer Retention: Some experts argue that Moonlighting can help employees to stay at their jobs longer because with supplement income they may not feel the pressure to look for another job where they can earn more money.

Social Life: Office colleagues and co-workers constitute a significant part of one’s social life. Multiple jobs can help expand social life opportunities as well.

What are the concerns associated with Moonlighting?

Confidentiality: The primary concern companies have against moonlighting is data and confidentiality breaches. Employees having access to critical and proprietary information regarding companies’ processes/products can pass it on to rivals, thus impacting competitive advantage.

Loss of Productivity: Working long hours (at two or more jobs) may cause the employee to become distracted, unproductive, and neglect primary job responsibilities because of physical and mental fatigue.

Misuse of Resources: Employees may use the company resources for their second job which increases operating expenses. This is unethical as well.

Conflict of interest: This is a big issue in the software and IT industries where employees use skills they have learned from their primary employer for the benefit of the rivals. So, Employers insist they have rights to their employees intellectual property.

Ethical Concerns: An employee, despite best efforts, may not be give their 100% when working for two companies simultaneously.

Source: ForbesIndia

What are the legal provisions regarding Moonlighting?

Certain statutory provisions impose restrictions on double employment.  These include laws such as the Factories Act, 1948; some of the State Shops and Establishments Acts (like in Delhi and Bombay two or more jobs are restricted);  and the Industrial Employment (Standing Orders) Central Rules, 1946. The Bombay Shops & Establishments Act prohibits employers from knowingly permitting an employee to extend services to another establishment on an off day.

Judicial View

In the case of Glaxo Laboratories Limited vs Labour Court, Meerut and others (1983) the Supreme Court held that the employer can’t be granted the power to regulate the behaviour of the workmen outside the duty hours because then ‘the contract of service may be reduced to contract of slavery‘. The sphere of employment cannot be extended by the employer beyond working hours and outside his place of employment, which is the principle laid down in the above judgment. In other words, the employee can choose to arrange her affairs as she pleases beyond the working hours of the employer.

In the case of Gulbahar vs Presiding Officer Industrial Tribunal (2016), the Punjab-Haryana High Court upheld the dismissal of the petitioner on the ground of dual employment.

A Delhi District court upheld the dismissal of the employee under dual employment in the case of Metso Paper (India) Pvt Ltd vs Mr V Gokulakrishnan (2019).

What has been the response of various companies regarding Moonlighting?

Wipro: The company terminated 300 employees after finding out that they were working for one of its competitors at the same time. The Executive Chairperson of Wipro called moonlighting as ‘cheating‘.

Infosys: Infosys has warned employees against moonlighting. However, it has allowed employees to take up gig work outside the company hours with prior approval from HR and industry executives.

IBM India: The company has made clear that moonlighting, as a practice, is not ethical and the company does not promote such behaviour at the workplace.

Tech Mahindra: If moonlighting helps employees gain additional money, there should be no problem with supporting the practise of moonlighting.

Swiggy: It’s employee-first ‘Moonlighting Policy’ allows its employees to pick up gigs or projects beyond work that add to their professional and mental well-being. However, this is subject to approvals.

Nova Benefits: It supports moonlighting and allows employees to try new options and pursue their interests or passion outside work hours.

The Minister of State for Skill Development and Entrepreneurship, and Electronics and IT, remarked that the employers should not suppress employees who want to monetise, develop and demonstrate, also employees should not violate their agreements with employers.

What should be be the approach going ahead?

There is a need for greater deliberations on the issue from the perspective of all stakeholders.

Employers need to be sensitive about the requirements of the employees. Valid concerns related to confidentiality can be addressed through properly worded employment contracts. Periodic review of emoluments can ensure employees are satisfied and do not look for alternate opportunities.

Employees should be mindful of their obligations towards their employers. They should engage in side-gigs only if it doesn’t impact their productivity. The side hustle should ideally add to their skills or enhance productivity.

Source: The Hindu, Business Standard, Business Standard, Outlook