Moonlighting: Should it be legalised? | The Financial Express

Moonlighting: Should it be legalised?

There is no explicit definition of “double employment” or “dual employment” in Indian law or a blanket ban on moonlighting.

Moonlighting: Should it be legalised?
Employees do it to gain some extra income and valuable experience, but they run the danger of breaching their employment contract.(Image – Unsplash)

By Reetika Arora,

Let us start with a better understanding of exactly what Moonlighting is all about and why it is so much in news these days?

The practice of having employees perform a second job in addition to their regular one is known as moonlighting. Numerous news stories on this technique in start-ups and the IT/ITES sector have been published during the past few weeks. According to sources, a large fraction of white-collared professionals in India are increasingly engaging in the practice of moonlighting, thanks to the work from home (WFH) operational model.

It has resulted in stirring a debate among the corporate sector with the majority of businesses issuing comments denouncing the practice, and some even taking legal action against the employees who moonlight. However, several businesses have said they are open to allowing workers to moonlight within a certain framework. Thus, a prominent question comes forth whether the employers should support the idea of moonlighting in India and whether it is permissible under the law?

Also Read | Moonlighting and its negative impact on the employee and the employer

What does the labour and employment laws say about moonlighting and what contractual protection and provisions does the employer need to prevent or regulate such cases?

Is moonlighting ethical?

In these difficult circumstances, it’s usual for people to take on a second job on the side or even to spend their free time attempting to start a new business venture. Employees do it to gain some extra income and valuable experience, but they run the danger of breaching their employment contract.

There is no explicit definition of “double employment” or “dual employment” in Indian law or a blanket ban on moonlighting. However, the Indian laws do regulate it to some extent. Section 60 of the Factories Act of 1948, forbids dual employment but organisations that do not run factories do not fall under the ambit of Factories Act.

The Industrial Employment (Standing Orders) Central Rules, 1946, state that a workman cannot be doing dual employment work against the interest of an industrial establishment.

Section 65 of the Bombay Shops and Establishments Act, 1948 has restrictions on dual employment during leave or holiday. Section 9 of the Delhi Shops and Establishment Act,1954, also restricts double employment. Each state has its own laws and regulations, most of the statutes exempt IT companies who are free to take an independent call on the issue of moonlighting.

Read More | How to go about moonlighting?

Since January 2022, startups have fired more than 11,000 employees, and some IT businesses are considering withholding variable compensation to relieve pressure on their constrained operating margins.

During the pandemic, a few remote workers in the IT sector were juggling two or three jobs at once, which is how this trend got started. To guarantee that workers work solely for them on their premises, some businesses are limiting the availability of work-from-home options.

Numerous legal experts and HR specialists agree that courts have in the past permitted employers to terminate employees who are proven to be moonlighting. These changes need careful consideration.

Employers’ perspectives and strategies on moonlighting varies. It is like two ends of a spectrum, while one type has no qualms in supporting an employee’s efforts to earn extra income provided it does not result in loss of productivity and a conflict of interest, the other more traditional type accounts it to be a form of cheating and breach of trust and are strictly against it.

Central government personnel are expressly prohibited from partaking in specific activities. However, they are permitted to carry out occasional work of a literary, artistic, or scientific nature as well as participate in sports as amateurs without the government’s approval..

The way forward

Recently, Prime Minister Narendra Modi emphasised the need for flexible working. Recent amendments to labour law further emphasise how gig workers are particularly recognised under the new labour codes (yet to be brought into force).

In view of the fast changing startup culture, Rajeev Chandrasekhar, Minister of State for Skill Development and Entrepreneurship of India, supports moonlighting. He believes that this is how the work will be done in the future.

He asserted that businesses must now recognise that the young Indian IT workforce’s mindset and attitude have undergone a fundamental change. The young people of today are fully committed to maximising the worth of their abilities. They seek to profit from his or her abilities. However, the minister said, moonlighting shouldn’t be against any contractual duties.

In summary

There is still no comprehensive law against moonlighting in India that can be applied to all professions. Therefore, whether moonlighting is lawful or illegal varies much on the employers and the terms of their employment.

Companies may add a conflict-of-interest provision and an exclusive clause that prohibits moonlighting in the employment agreement, but legal provisions by themselves will not provide the intended outcomes if there is no trust and no engagement.

Whether you’re considering moonlighting, you should assess your plans to see if they conflict with any written obligations, company rules and policies, or your own employment contracts. In view of the ongoing discussion over moonlighting, the government should develop a policy on moonlighting as part of the new labour laws. It could provide a legal framework for things that have been occurring clandestinely for years in so many different domains.

It’s time to establish a comprehensive policy stating what is allowed and what is not, allowing employees the option to work outside of their full-time employment.

(The author is HR & Compliance Specialist. Views expressed are personal and do not reflect the official position or policy of the

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First published on: 31-10-2022 at 03:36:56 pm
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