Information Technology (hereinafter referred to as IT) can be understood as the equipment, software, services and processes used to create, store, process, communicate and manage information. The IT industry is thriving with new technological advancements that materialize on the horizon every day.
Our daily lives have also been adapting with this constant evolution and not a single aspect of our life has remained untouched and unaffected by technology and its usage.
Of late moonlighting has been hovering as a major concern for the Management of Companies in the IT or Information Technology Enabled Services (hereinafter referred to as ITES) Sector. Initially, the trend could be seen in the West but now even India is not an exception to the moonlighting wave.
The term Moonlighting refers to engaging in other jobs in addition to the regular job that an individual does. It is the phrase used to describe the practice of working for other organizations without the knowledge of the employer.
Moonlighting has been a trend in the United States since the year 1996 but has become one of the debatable topics in India since work from home (hereinafter referred to as WFH) has become the new normal during the Covid-19 pandemic. The WFH culture has led to a rise in dual employment.
MOONLIGHTING AND ETHICAL ISSUES
The companies in the economies are divided in two when it comes to their opinion on moonlighting- Old School IT Companies and New School IT Companies. Majority of the traditional or Old School IT Companies forbid their staff from working for third parties during the term of employment.
Whereas, the New School IT Companies such as Swiggy which is a food aggregation company have permitted their staff to work on outside projects subject to specific constraints and parameters.
Companies like Swiggy have initiated their Moonlighting Policy wherein it is stated that the employees are free to take on any job or activity that can be completed either after office hours or during the weekend without affecting their productivity on the job.
On the other hand, companies like Wipro think of moonlighting in the tech industry as Cheating and a Violation of Integrity.
In the last few weeks, various employees have been terminated by IT Companies from their employment because of dual employment or moonlighting by the employees. The IT Companies have strictly stood against the same because of the following reasons:
1. Conflict of Interest;
2. Misuse of the employer’s resources;
3. Doubts regarding productivity and job performance of the employees;
4. Absenteeism from the regular job; and
5. Lack of attention.
MOONLIGHTING AND LEGAL ISSUES
At present, there is no overarching law that prohibits a person from doing multiple white collar jobs. However, a person doing multiple jobs of similar nature may spark issues relating to breach of confidentiality.
Even though the legislation in India does not entirely ban moonlighting but there are various statutes that discusses about multiple employments or works.
1. Factories Act, 1948
Section 60 of the Factories Act, 1948 (hereinafter referred to as the Factories Act) imposes restriction on dual employment. Section 60 states that a worker is not allowed to work in two factories simultaneously. However, according to Section 2(l) of the Factories Act, the definition of worker does not include an IT Professional.
Section 60 of the Factories Act is reproduced herein below for easy reference:
“60. Restriction on double employment.—No adult worker shall be required or allowed to work in any factory on any day on which he has already been working in any other factory, save in such circumstances as may be prescribed.”
2. Industrial Employment (Standing Orders) Central Rules, 1946
Rule 8 of the Industrial Employment (Standing Orders) Central Rules, 1946 (hereinafter referred to as the Industrial Employment Rules) stipulates Exclusive Service.
According to the said Rule, a workman should not work against the interest of the industrial establishment of his regular employment and should not take any additional employment that may have an adverse effect on the employer’s interest.
Rule 8 of the Industrial Employment Rules is reproduced herein below for easy reference
“(8) EXCLUSIVE SERVICE
A workman shall not at any time work against the interest of the industrial establishment in which he is employed and shall not take any employment in addition to his job in the establishment, which may adversely affect the interest of his employer.]”
3. Shops and Establishments Act
The Shops and Establishments Act regulates the employees working in a commercial establishment, shop, theatre, restaurant and other places for public amusement or entertainment.
Every state has its own Shops and Establishments Act. The Bombay Shops and Establishments Act and Delhi Shops and Establishments Act put a restriction on double employment.
a. Bombay Shops and Establishments Act, 1948
Section 65 of the Bombay Shops and Establishments Act, 1948 (hereinafter referred to as the BSE Act) provides for restriction on double employment on a holiday or during leave.
According to the said provision, an employee working in any shop or establishment cannot work in any other shop or establishment when the employee is on leave or has been given a holiday.
Section 65 of the BSE Act is reproduced herein below for easy reference
“65. Restriction on double employment on a holiday or during leave – No employee shall work in any establishment, nor shall any employer knowingly permit an employee to work in any establishment, on a day on which the employee is given a holiday or is on leave in accordance with the provisions of this Act.”
b. Delhi Shops and Establishments Act, 1954
Section 9 of the Delhi Shops and Establishments Act, 1954 (hereinafter referred to as the DSE Act) provides for restriction on double employment.
According to the said provision, an employee cannot work in two or more establishments for more than the period for which he was employed at the establishments.
Section 9 of the DSE Act is reproduced below for easy reference
“9. Restriction on double employment.—No person shall work about the business of an establishment or two or more establishments or an establishment and a factory in excess of the period during which he may be lawfully employed under this Act.“
The above-mentioned laws provide for restrictions on dual or multiple employment. However, all of these legislations are for workmen and are not applicable to employees who are engaged in white-collar jobs. Therefore, there is no law as on the date that prohibits moonlighting in the IT/ITES Sector.
Moreover, each state has its own legislation that varies from state to state. In practical terms, most often, IT companies have been exempted from certain provisions of the statutes such as dual or multiple employment.
Moonlighting does not only result in a breach of employment agreement but also results into compromising data privacy on a large scale. Therefore, when it comes to employment, IT Companies are free to take independent decisions and formulate their policies accordingly.
Nevertheless, the employees in IT/ITES working in similar jobs for both or all of their jobs may violate the confidentiality agreement or the confidentiality clause of their regular employment agreement. When an agreement is entered into by an employee containing clauses such as non-compete and single employment, the employers can consider moonlighting as cheating resulting into the breach of terms of employment. But in case, the employment agreement does not contain such clauses or provides relaxation, moonlighting cannot be considered cheating.
This blog is an introduction to the concept of Moonlighting and the Ethical and Legal Issues in the IT/ITES Sector. The Part II of the Series shall discuss the Essential Clauses in the IT/ITES Sector along with Moonlighting being the Need of the hour.
Team AMLEGALS
For any queries or feedback, please feel free to get in touch with chaitali.sadayat@amlegals.com or aditi.tiwari@amlegals.com.
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