The Rising Trend of Moonlighting in India: A Legal and Ethical Perspective

Introduction

Moonlighting is on the increase within the Indian service industry as workers attempt to augment their wages with part-time employment or side companies while keeping onto their core full-time positions. This development has given rise to ethical and legal difficulties, with various firms having varied attitudes on moonlighting, and the legal consequences of such acts remain a source of intense dispute.

Within the context of India's current labor laws, moonlighting may be considered as a type of dual employment, subject to regulation via multiple regulations. For instance, the Factories Act of 1948[1] stipulates that every worker employed in a certain factory on a given day is barred from working in any other factory other than the one they are now involved with. Similarly, the Industrial Employment (Standing Orders) Central Rules of 1946[2] created the notion of "exclusive service," forbidding workers from taking on jobs that would be damaging to the interests of their principal company.

Why Moonlighting Occurs?

Moonlighting is occasionally called out as immoral and a possible danger to a company's productivity and privacy regulations. However, getting insight into the reasons for persons engaging in multiple works may throw light on this phenomenon.

Creating Additional Income Streams

As any financially knowledgeable person would suggest, having a backup plan or an alternative source of income is a wise step toward reaching financial stability and assuring a safe future. The global economy has suffered its most hard periods since World War II, resulting in massive job losses and bringing many people to the edge of starvation.

In September 2022, a private group named the Centre for Monitoring Indian Economy recorded an unemployment rate of 6.50% in India. In metropolitan areas, this percentage is as high as 7.70%, while in rural parts, it sits at 6.00%. Given these conditions, it's only reasonable for individuals to seek additional revenue sources[3].

Coping with Layoffs

Layoffs comprise the temporary or permanent firing of workers from a firm, and this has become a distressingly prevalent event in today's economy. In reality, more than 15,000 people have been let off this year, including those at notable firms like BYJU and Meesho. These incidents put people into economically and emotionally vulnerable positions, leading them to seek a second job they can depend on in case of more layoffs.

Exploring New Career Paths

Individuals who wish to shift their career paths frequently take on second jobs to get expertise and familiarity with their intended professions. If they lack a formal background in their chosen field, many decide to moonlight in side jobs to gain the skills essential for securing more lucrative opportunities later on. This technique enables people to remain in their existing careers while seeking side jobs or freelancing options in their chosen industry.

Fueling Passion and Creativity

At times, core professions may become repetitive and uninspired, resulting in diminished productivity and mental strain for workers. To get away from the regular boring responsibilities, some people take up moonlighting chances that correspond with their unique hobbies and passions.

What are the issues associated with moonlighting?

In the IT sector, there are differing viewpoints on moonlighting. Some tech companies view moonlighting as a form of cheating and a violation of the employment contract between the worker and the employer, citing concerns about privacy and confidentiality.

Others argue that it can harm employee productivity, which, in turn, affects a company's overall output. A July survey by Kotak Institutional Equities involving 400 IT & ITES industry employees found that "65% were aware of individuals seeking part-time jobs or engaging in moonlighting while working from home."

This trend has been linked to the COVID-19 era, where remote work became widespread, and many people struggled to make ends meet in challenging circumstances.

However, some companies like Swiggy have formally introduced a 'moonlighting policy' that permits their employees to work in additional roles under specific conditions. Employees can engage in such activities outside their official working hours or during weekends to avoid conflicts with Swiggy's business interests and productivity.

Regulations Governing Secondary Employment in India

Moonlighting is legal in nations like the USA and the UK without any tax-related difficulties[4]. In contrast, there is no explicit regulation in India that controls moonlighting. The Factories Act of 1948, under Section 60, bans simultaneous employment, banning industrial workers from working in more than one workplace on the same day unless particular requirements are satisfied. Similarly, Section 65 of the Bombay Shops and Establishment Act of 1948[5] and Section 9 of the Delhi Shops and Establishment Act of 1954[6] set prohibitions on having numerous occupations, however, these laws are largely limited to specialized industries. Section 60 of the Factories Act of 1948[7] forbids workers from holding two jobs at once, while it eliminates IT professionals and personnel in administrative or managerial duties from the worker group.

According to the Industrial Job (Standing Orders) Central Rules of 1946, workers shall not participate in any secondary occupation that might hurt their employer's interests or go against the interests of the industrial establishment.

The Shops and Establishments Act applies to workers in different areas, including retail, eating, entertainment, and information technology, with each state having its particular version. For instance, the Delhi Shops and Establishments Act of 1954 outlaws having multiple occupations.

Under Article 19(1)(g) of the Indian constitution[8], all people have the freedom to follow any profession or activity, including moonlighting. However, this privilege is subject to reasonable constraints.

Legal Precedents

In a notable case revolving around the relocation of an employee from a factory to the head office, as seen in Manager, Pyarchand Kesarimal Ponwal Bidi Factory vs. Omkar Laxman Thange and Others[9] the Supreme Court rendered the following observation: "The general principle governing the employer-employee relationship dictates that an existing employment contract with one employer typically prevents simultaneous employment with another unless the contract explicitly allows for such an arrangement or the original employer consents."

Drawing inspiration from the aforementioned Supreme Court decision, the Madras High Court passed a verdict in the case of Government of Tamil Nadu vs. Tamil Nadu Racecourse General Employees Union[10], stating that "there might not be any legal impediment to having two employers if the employment contract explicitly permits it or if the original employer gives their consent."

Article 21[11] of the Constitution contains the right to life and personal liberty. In the case of the Board of Trustees of the Port of Bombay v. Dilipkumar Raghavendranath Nandkarni[12], the Court found that the "right to life" covered by Article 21 also covers "the right to livelihood."

PROPOSED PATH FORWARD

To address the ongoing debate surrounding the legality of moonlighting, a potential solution lies in the implementation of clear and precise regulations governing this practice. The need for individuals to engage in multiple employments often arises from insufficient remuneration in their primary job, compelling them to seek additional sources of income. One way to mitigate moonlighting is to ensure that employees receive a suitable wage, which, to a certain extent, could alleviate the need for multiple jobs. Adequate compensation, job satisfaction, and financial support can collectively contribute to overcoming the challenge of dual employment.

Furthermore, a reduction in the prevalence of moonlighting can be achieved through increased awareness of its disadvantages. The government can play a crucial role in establishing rules that classify professions as either moonlighting or not, particularly in highly competitive sectors where dual employment may pose privacy concerns or other issues. These regulations should also adapt to the changing landscape of employment, encompassing emerging career opportunities such as YouTubers and influencers who pursue these vocations alongside their primary occupations.

It is essential to permit moonlighting in industries unrelated to individuals' primary jobs. While employers have the right to govern their employees during working hours, they should not impede their freedom to seek additional employment, provided that it does not jeopardize the efficiency, productivity, or privacy of their primary role.

CONCLUDING REMARKS

In India, the practice of moonlighting and engaging in multiple jobs is rapidly expanding. The advantages of moonlighting, including supplementary income, skill development, risk diversification, networking, creativity, and flexibility, must be weighed against the drawbacks, such as burnout, privacy concerns, conflicts of interest, absenteeism, time management challenges, and strained relationships.

Hence, it is imperative to establish regulations that govern moonlighting in India while taking into consideration the full spectrum of its pros and cons. With the advent of globalization and technological innovations, new career opportunities have emerged, such as part-time positions in online gaming or as influencers on platforms like Instagram and YouTube. The government should enact rules that encompass these evolving employment options, all while considering the needs and circumstances of those engaging in multiple employments. Moonlighting is currently allowed due to the absence of explicit laws prohibiting it, with only a few exceptions typically associated with industrial labor. To ensure clarity and consistency, both employers and employees should receive education on moonlighting, highlighting the need for well-defined and standardized rules to govern this practice without compromising the productivity of primary employment.

Reference(s):

[1] Factories Act 1948

[2] Industrial Employment Act, 1946

[3] Mukhopadhyay S, “Moonlighting: Why Do People Take up a Second Job Anyway? | Mint” (mint, September 14, 2022) <https://www.livemint.com/news/india/why-moonlighting-why-do-people-take-up-a-second-job-anyway-11661918379778.html> accessed on 10 October 2023

[4] ‘Perspective – Moonlighting Culture’ (Drishti IAS, 21 September 2022) <https://www.drishtiias.com/loksabha-rajyasabha-discussions/perspective-moonlighting-culture > accessed 12 October 2023

[5] Bombay Shops and Establishment Act, 1948, s 65

[6] Delhi Shops and Establishment Act 1954, s 9

[7] Factories Act 1948, s 60

[8] Constitution of India, art. 19 (1) (g)

[9] Pyarchand Kesarimal Ponwal Bidi Factory vs. Omkar Laxman Thange and Others (1970) AIR 1970 SC 823

[10] Government of Tamil Nadu vs. Tamil Nadu Racecourse General Employees Union (1993) ILLJ 977 Mad

[11] Constitution of India, art. 21

[12] Board of Trustees of the Port of Bombay v. Dilipkumar Raghavendranath Nandkarni (1983) 1 SCC 124

The author affirms that this article is an entirely original work, never before submitted for publication at any journal, blog, or other publication avenue. Any unintentional resemblance to previously published material is purely coincidental. This article is intended solely for academic and scholarly discussion. The author takes personal responsibility for any potential infringement of intellectual property rights belonging to any individuals, organizations, governments, or institutions.