Dual Employment Laws in India


Posted On : June 19, 2023
Dual Employment Laws in India
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Introduction

In today's dynamic and competitive job market, it is not uncommon for individuals to seek additional sources of income or explore diverse professional opportunities. However, it is essential to understand the legal aspects surrounding dual employment to ensure compliance with the law and avoid potential legal consequences. In India, dual employment is a complex subject governed by various statutes and regulations. This article aims to provide an overview of dual employment laws in India, shedding light on the legal framework and the implications for both employees and employers.

What is Dual Employment?

Dual employment is the practice of working for one or more employers or working for oneself in different capacities at the same time. Dual employment is not specifically defined under a single comprehensive law in India; rather, it is covered by a number of statutes and regulations.

Applicable Legislation

It is acceptable to work in numerous jobs in India without breaking the law. A person with a similar set of jobs may express concerns about a breach of confidence even though many organizations include such restrictions in their employment agreements in addition to rules prohibiting holding down other jobs. It might be seen as cheating if an employee's contract calls for non-compete and exclusive employment, as is the case with the majority of conventional employment contracts.

It is not deemed as cheating if the employment contracts don't include this clause or include exceptions. The Indian legal system does not specifically address the idea of "dual employment." However, it provides some of the following laws;

  • The Factories Act, 1948 and the Industrial Employment (Standing Order) Rules, 1946

Under the above-mentioned provision, adult workers are not allowed to hold down two jobs. Also covered by state-specific labour laws, such as the Delhi Shops and Establishments Act of 1954, there are regulations pertaining to concurrent employment.

  • Section 9, Delhi Shops and Establishments Act, 1954 

Employees are prohibited from working in two or more places of business for a longer amount of time than is permitted by law for them to be employed. However, because it is related to the amount of time an employee may be engaged to work, this rule, which reads as a restriction on dual employment, can also be read as a restriction on overtime work.

  • Schedule I-B, Industrial Employment (Standing Order) Rules, 1946

It forbids employees from accepting any jobs that might jeopardize the interests of the industrial enterprise where they are employed.

  • Section 60, The Factories Act, 1948

It prohibits factory workers in India from holding two jobs at once while they are currently employed in a plant.

  • Clause 22 of the draft Model Standing Orders for Service Sector, 2020: 

The relevant clause of the Industrial Relations Code, 2020 states that a worker is expected to refrain from working against the interests of the establishment in which he is employed and shall not take up any other employment that may have a negative impact on his employer's interests, despite the fact that these model standing orders are not notified under that code. However, a worker who has secured the required approval from his employer may accept extra employment, with or without restrictions. The new labour laws therefore appear to take into account the realities of the industrial sector, where workers frequently hold down two or more jobs, and gig workers are frequently employed in such businesses.

Implications for Employees

Employees engaging in dual employment should be aware of the potential implications it may have on their legal rights and obligations. Some key points to consider are:

  1. Employment Contracts

    Employees should review their employment contracts to understand any clauses or restrictions related to dual employment. Violation of such clauses may lead to disciplinary actions or termination.

  2. Working Hours and Rest Periods

    Dual employment may affect an employee's ability to comply with the prescribed working hours, rest intervals, and weekly off requirements. Ensuring compliance with these regulations is crucial to avoid legal repercussions.

  3. Social Security Contributions

    Dual employment may impact an employee's eligibility and contributions towards social security schemes such as the Employees' Provident Fund (EPF) and Employees' State Insurance (ESI). It is essential to understand the implications on contributions and benefits under these schemes.

 

Implications for Employers

Employers must also navigate dual employment issues carefully, considering the following aspects:

  1. Employment Policies

    Employers should have clear policies addressing dual employment to maintain transparency and avoid disputes. These policies should outline any restrictions, disclosure requirements, and consequences for non-compliance.

  2. Confidentiality and Conflict of Interest

    Employers must ensure that employees engaging in dual employment do not disclose confidential information or engage in activities that create conflicts of interest. Adequate safeguards and non-disclosure agreements can help protect the employer's interests

  3. Contractual Provisions

    Employers can include specific contractual provisions in employment contracts to regulate or restrict dual employment based on their industry, business requirements, or competition concerns. However, such provisions should be reasonable and enforceable under applicable laws.

 

Some Leading Case Laws

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

    The Supreme Court noted the following in a case involving the transfer of an employee from a factory to the corporate headquarters, that "The general rule in respect of relationship of master and servant is that a subsisting contract of service with one master is a bar to service with other master unless the contract otherwise provides or the master consents”.
  1. Government of Tamil Nadu vs. Tamil Nadu Racecourse General Employees Union (1993 ILLJ 977 Mad)

    The Madras High Court in the aforesaid case citing the decision of Supreme Court  in case of Pyarchand Kesarimal Ponwal Bidi Factory vs. Omkar Laxman Thange and Othersruled  that "there may not be any prohibition to have dual employers if the contract otherwise provides, or the master consents."
  1. Board of Trustees of the Port of Bombay v. Dilipkumar Raghavendranath Nandkarni (1983) 1 SCC 124

    Personal freedom and the right to life are both covered by Article 21 of the constitution. In the case, the right to life was liberally interpreted to include the right to subsistence. The Court came to the conclusion that "the right to life" protected by Article 21 includes "the right to subsistence."

Conclusion

Dual employment laws in India are a complex web of various statutes, regulations, and contractual obligations. Both employees and employers need to understand their rights, obligations, and the potential consequences associated with engaging in dual employment. Adherence to the legal framework surrounding dual employment is crucial to ensure compliance, maintain healthy employment relationships, and mitigate legal risks. Seeking professional legal advice and staying updated on changes in employment laws are prudent steps to navigate the intricacies of dual employment in India. However, if you are facing any such issues it is advisable to consult experienced Labour and Employment Lawyers in your relevant jurisdiction.

Written By:
Vidhikarya

Vidhikarya

Kolkata | Delhi | Mumbai | Bangalore | Chennai | Pune | Vadodara | Nagpur | Goa | Anand

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