The story so far

Moonlighting — or employees working for remuneration with entities other than their employers — has been a hot topic in recent months.  During the pandemic, those with desk jobs had more time on their hands and thus it was easier to take on a few projects outside of work.

How are companies reacting to moonlighting?

1. Wipro company has sacked 300 employees following the discovery that they were working for rival firms on the side, leading to conflict of interest.
2. Another software firm DXC Technologies said that moonlighting by employees was a challenge for employers but that wouldn’t affect its WFH (work from home) policy that has worked well for both the firm and its staff.

What does the law say?

1. Moonlighting is not defined in any of the statutes in India.
2. However, there are enactments that deal with double employment.
3. Section 60 of the Factories Act deals with restriction on double employment stating that “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”. However, this enactment is applicable only to employees working in factories.
4. There are State enactments which deal with employment of persons working in offices, banks, shops, etc.
5. This case was not specifically about moonlighting but the court’s observation gives us an idea as to how the law may view such cases.
6. Moonlighting is subject to law of the land. 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.
7. In other words, the employee can choose to arrange his affairs as he pleases beyond the working hours of the employer.

Does the law lay out punitive action against moonlighting?

• Unless an employer is able to prove that an employee acted against the interest of the company, Courts may not uphold severe punishment of termination of employment.
• The Courts of law in India dealing with employment are Writ Courts and Labour Courts. These Courts exercise jurisdiction based on equity or fairness. Therefore, the Courts may lean in favour of the employee unless the contravention of the employee has led to serious prejudice and loss to the employer.
• In today’s world, every company ought to have a gig economy strategy. Paul Estes, author of the book Gig Mindset, said, “Not having one is like missing the Internet revolution of 1990 or the mobile revolution in 2010.”
• ‘Moonlighting’ is still a nouveau concept for Indian corporates and it will take some time for the firms to formulate clear guidelines on the same.