Employment or moonlighting, as informally called, is often referred to as holding multiple jobs simultaneously, which has become increasingly common in today's dynamic job market. While some individuals pursue dual employment to supplement their income or explore diverse career opportunities, others may engage in it inadvertently or out of necessity. However, the practice of dual employment raises complex legal, ethical, and practical questions for both employees and employers. This article explores the concept of dual employment, its implications, and the legal framework surrounding it.
What is Dual Employment?
Dual employment, also known as multiple job holding, occurs when an individual holds two or more jobs concurrently. These jobs may be with different employers or within the same organisation, but in distinct roles or departments. Dual employment can take various forms, including part-time positions, freelance work, consulting gigs, or entrepreneurial ventures alongside full-time employment. As long as it is within the same organisation but in different departments, it should not be an issue, but when the employees are in different organisations (both being separate legal entities), then it becomes a matter of concern both legally and ethically.
Understanding Moonlighting
Moonlighting is a colloquial term often used interchangeably with dual employment. It refers to the practice of working a second job, typically during evenings or weekends, in addition to one's primary employment. Moonlighting may involve unrelated work or leverage the individual's skills and expertise in a different capacity.
Factors Contributing to Increased Cases of Dual Employment
In recent years, several factors have contributed to the rise in cases of dual employment. The COVID-19 pandemic, in particular, has reshaped the labour market dynamics, leading to widespread job losses, remote work arrangements, and a surge in freelance and gig economy opportunities. Financial pressures, career aspirations, and the desire for flexibility have driven many individuals to seek additional sources of income through dual employment. The “Work from Home” or WFH, as they say, has contributed significantly to this menace of dual employment. Since in WFH there it was easy to quit the present company and join the new company, so employees resorted to sending resignation emails to their current employers and even before serving the whole notice period or before the last day of working or exit date, the employees were joining the next company. Some of them did inadvertently without knowing the consequences, but a few did this deliberately with an expectation that nothing would transpire later on, which can create problems for them.
How dual employment is being detected
While the employees were having a jolly good time hopping from company the company, they had the feeling and knowledge that no one would come to know about it and they would escape the wrath, if any.
But alas! Here came in the EPFO- The Employee Provident Fund Organisation. EPF being a statutory liability, the employer is supposed to open an account (for new joiners and freshers) and for lateral entries to continue to credit the PF into the EPF account. For that matter, even if an employee has worked for a day, the employer is supposed to credit and or update the EPF. As per the norm, the employer is supposed to update the joining date and exit date of an employee on the EPF portal, and this brought the cat out of the bag.
During the Background Verification (BGV) of new employment, the EPF portal is being verified, and therefore, the records speak whether there is dual employment or not for any previous period.
Legality and Ethical Considerations of Dual Employment
There is no single law in India that specifically forbids dual employment in any work sector. There are some laws and rules that bear relation to the issue of dual employment. The Factories Act, 1948, Section 60 forbids double employment in respect of employees who are employed in factories or industrial establishments. In other fields, the terms and conditions of the employment contract shall prevail. When the contract is subject to exclusive or non-compete clauses, double employment can subsequently be considered a breach of contract that may attract discharge or disciplinary action. Public sector and government workers are also typically barred from securing double employment.
While dual employment is not inherently illegal, it can raise legal and ethical concerns, especially when contractual obligations are breached or conflicts of interest arise. Many employment contracts contain clauses prohibiting employees from engaging in secondary employment without the employer's consent.
This is because dual employment may compromise an individual's ability to fulfil their duties effectively, result in conflicts of interest, or disclose confidential information. Employers generally discourage dual employment due to concerns about productivity, loyalty, and potential conflicts. From an ethical standpoint, dual employment may be perceived as unfair to both employers, as it divides an employee's time and attention, potentially jeopardising the quality of work and professional relationships.
Legal provisions, such as the Contract Labour (Regulation and Abolition) Act, 1970, and the Industrial Employment (Standing Orders) Act, 1946, may explicitly or implicitly prohibit dual employment by imposing restrictions on working conditions, termination procedures, and contractual obligations. Government jobs, in particular, often have strict regulations prohibiting dual employment to maintain the integrity and impartiality of public service.
Section 60 of the Factories Act, 1948, explicitly restricts individuals from working in two factories simultaneously, ensuring the safety and efficiency of industrial operations. While some government employers may allow deputation or temporary assignments to other organisations, stringent regulations often govern such arrangements.
Government jobs, in particular, often have strict regulations prohibiting dual employment to maintain the integrity and impartiality of public service. Employees in government positions are typically barred from holding concurrent employment in the private sector to avoid conflicts of interest and ensure undivided loyalty to their primary role.
Impact of Dual Employment
Dual employment can have significant implications for both employees and employers, especially when it violates relevant regulations and contractual obligations. From an employee's perspective, engaging in dual employment may impact their eligibility for benefits, such as provident fund contributions and insurance coverage. Employers may view dual employment unfavourably, fearing reduced productivity, compromised confidentiality, or conflicts of interest. As a result, individuals with a history of dual employment may face challenges in securing new job opportunities or advancing their careers due to concerns about their commitment and reliability. Understanding the consequences of non-compliance is crucial, as any breach of these regulations can lead to adverse actions, including termination, legal action, financial penalties, reputation damage, non-compliance risks, and conflicts of interest.
Case Laws
Several landmark cases have shaped the legal landscape surrounding dual employment, providing insights into the interpretation and application of relevant laws and regulations.
For instance, in "Food Corporation of India v. Kamdhenu Cattle Feed Industries (2003)”, the Supreme Court of India deliberated on the legality of an employee engaging in dual employment without the consent of the primary employer. The court's ruling underscored the importance of upholding contractual obligations and employer policies regarding secondary employment.
Similarly, the case of "Sukhdev Singh vs. Bhagat Ram Sardar Singh Raghuvanshi & Anr (1975)” addressed the rights of employees in the context of dual employment, particularly concerning termination procedures and the duty of loyalty to the primary employer. This case emphasised the need for fairness and procedural safeguards in employment matters, highlighting the complexities inherent in dual employment arrangements.
Double Employment and EPFO Results
The Employees' Provident Fund Organisation (EPFO) does not specifically disallow dual employment, although it monitors contributions to an individual's Universal Account Number (UAN). If an individual is employed by two organisations and both are contributing to the EPF on the same UAN, then it might raise some questions. The EPFO would have a closer evaluation of the circumstances to ascertain if the dual employment was legal or not, particularly if the dual employment was either not reported or even permitted using the terms of the employment agreements.
Remedies or Resolution- How to resolve the issue of dual employment?
Well, dual employment as such is not a criminal act, but is certainly illegal as far as employment agreements are concerned, as it is an example of direct breach of the contract. The status of dual employment could be there because of a puerile ignorance or conscious action on the part of the employees. Whatever may be the reason, in my view, the youngsters should not be made to suffer throughout their careers due to this reason. In my honest view, this issue of dual employment or double entry in EPF can be resolved in the following manner:
A) Since this is a breach of a contract between the employer and employee hence the employer can let go by putting some penalty on the employee and rectifying/modifying the entries with EPFO.
B) The employer can issue a conditional/qualified experience certificate mentioning the same so that the future employer is aware of the same and can take a call before rolling out the offer. This would bring down the heartburn as employees are asked to leave after joining, since the BGV is done post-joining.
C) The employer can seek a penalty or compensation for not serving the notice period.
D) In case the earlier employer is not ready to modify the EPF entries, then the employee can have and issue the following issued to the future employer.
A declaration in the form of an affidavit that what was done was done out of misunderstanding and was a blunder on his part; and
An indemnity bond stating that it won’t be repeated, and if the employer is going to suffer any losses due to this, then the employee shall indemnify accordingly.
The employer can issue a legal notice and dismiss the employee for unauthorised dual employment and contractual breach. There can be a civil liability too, based on the circumstances. General cases involving dual employment do not give a person criminal culpability in India unless it is fraud, misappropriation, or exploitation of confidential information. Dual employment is typically addressed through language in the contract, HR policy, and employment declaration to avoid duplication. Legal advisors will often recommend that businesses and workers have the employment terms scrutinised carefully and consult professionally in the dual employment scenario to steer clear of costly litigation.
Conclusion
Dual employment presents both opportunities and challenges for individuals navigating the modern workforce. While it offers flexibility and supplemental income, it also raises legal, ethical, and practical considerations for employees and employers alike. By understanding the legal framework, contractual obligations, and potential implications of dual employment, individuals can make informed decisions and mitigate risks in their professional endeavours. Employers, meanwhile, must establish clear policies and procedures and raise awareness to address dual employment issues effectively and maintain a productive and ethical work environment.
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