Moonlighting Legal Case

Finally, employers who are willing to support the idea of “undeclared work” can enable this at the institutional level by imposing certain embargoes on workers not to contact direct competitors, to disclose confidential data to unauthorized persons, or to use laptops or company devices when working at a second workplace. A policy may be implemented by employers when prior written approval from management is required for an employee to work on an additional job, assignment or project while employed. The prohibition on cooperating with competitors is based on the fear of sharing or misusing confidential information of the first employer with the competitor, revealing trade secrets, proposals, business plans, strategies and other sensitive information. In addition, interaction with a competitor through undeclared work is likely to constitute a conflict of interest. Companies` preference for undeclared work has observed a change in attitudes towards work, especially among young people. In implementing an “undeclared work” policy, these companies have emphasized that the intention is to allow employees to pursue their passion in other areas, while developing skills and creativity without compromising work productivity. In fact, “undeclared work” can be seen as one of the reasons why many employees are reluctant to physically work in the office again. As a result, talent retention has become even more difficult for employers. For many companies, “undeclared work” may not be a major threat to their operations, but it is important for employers to ensure that such practices do not violate company policy, affect employee productivity, violate confidentiality obligations, or create conflicts of interest. As the idea gains traction, most companies are asking their legal departments to reconsider employee contracts. But where does the law stand? “The Information Technology Act 2000 and the IT Rules 2021 are silent on this,” says Pavan Duggal, a Supreme Court lawyer whose law firm provides legal services in cyberspace and e-commerce law.

But Cohen said: “The result of the Nicholson terminal does not mean the end of undeclared work, but reminds employers to be careful in [their] wording.” An alternative to focusing on undeclared work policies is to rethink pay practices that might better address underlying issues, Harris added. Another industry leader, Mumbai`s Himanshu Jain, President (Indian Subcontinent), Diversey, calls undeclared work a clear case of fraud, as almost all companies do not allow alternative employment in their contracts. “Human relations and relationships between companies and employees are similar. It`s like having a wife (parent company) and a girlfriend (alternative job). If they both know each other, it doesn`t matter, otherwise it`s cheating. To put it simply, “undeclared work” is the practice of an employee secretly working on a second job, usually after hours. The practice has gained popularity due to the COVID-19 pandemic, which has forced employers to switch to the “work from home” (“WFH”) model. The WFH`s constraints and flexibility in office travel allowed employees to take on additional projects and independent tasks outside of work. The WFH model made it difficult for managers to exercise absolute control over employees` work during and after hours. Most companies have issued statements against this practice and some have even taken action against undeclared work by employees.

However, some companies have indicated that they are open to employees being able to work within a defined framework. Employees can take a stand on not being paid slaves, but this position has not yet been legally tested. “From a moral and ethical point of view, undeclared work is not desirable, but in the absence of a clear policy or law, it is up to the government to provide legal clarity. A grey law has the potential to harass employees. The current debate is good because it can be a catalyst for the development of jurisprudence,” adds Mr. Duggal. Employers also have good reason to oppose undeclared work if it interferes with their business interests. For example, employers might want to prohibit workers from performing undeclared work for a competitor or even a related company. And they may want to prohibit workers from using company time or resources for secondary jobs.

Type of legal relationship: As mentioned above, this can lead to legal and practical complications if a person is employed by more than one employer. Accordingly, employers should indicate the type of legal relationship that employees can establish in relation to their second job (employment, counselling, etc.). The concept has always existed, but the term “moonlighting” has been circulating lately, says Supriya, a Bengaluru-based HR professional with 17 years of experience in various industries. “This has attracted attention lately for a variety of reasons. Even before Covid, people were performing other tasks/jobs in addition to their regular work, but usually reported it to their primary employer.