Whom does moonlighting hurt, how and what to do about it?

The moral dilemma

Swetha Harikrishnan, human resource (HR) director, HackerEarth, says moonlighting might have some benefits, like helping employers attract better talent. “The talent, especially the tech talent out there today, has the potential, aspiration and market opportunity to get their hands on multiple challenging problems the world over, so this is a boon for them,” she says.

Harikrishnan, however, adds that one cannot follow a ‘one size fits all’ approach here. “Each organisation needs to check in and see if this works for them instead of blindly following trends.”

Narayan Bhargava, managing director and chairman, Calibehr, says moonlighting raises some concerns regarding data privacy and productivity that must be addressed. “Dual employment can lead to breach of data privacy and a loss in productivity for the employees. It is possible that the training and employment given from the employer is used by the employee for a different organisation,” he adds.

Ruhie Pande, CHRO at Godrej Capital, echoes Bhargava’s thoughts. She says one needs to assess the ethical damages of moonlighting despite the guardrails that prohibit dual employment. “I personally believe as the world moves towards roles operating in the gig economy, it will become important for us to define ethical damages of moonlighting and place the onus of the same on an employee.”

The perils of having a side hustle

The experts, in addition to sharing their stance on moonlighting, also opined on why employees choose to moonlight in the first place.

Godrej Capital CHRO Ruhie Pande says that the pandemic put more financial pressure on some employees who then needed to maximize income.

Calibehr MD Narayan Bhargava agrees: “The pandemic, which led to slashed salaries and loss of employment and income, could play a role here. Employees, in order to earn additional income for their family, choose to go for two jobs.”

Asked if moonlighting could, in fact, harm the mental health of employees and increase work pressure, Harikrishnan, HR Director at HackerEarth, says, “That’s not our decision or assumption to make... Every individual’s drivers, ambition, planning and capacity is different. If they are able to manage, great. If it affects their wellbeing, then they’ll check-in on it and alter the decision, or spend lesser hours on moonlighting,” she adds.

The future of moonlighting

What are some corrective measures an employer can take so their employees do not moonlight? Calibehr MD recommends having a special clause in the contract which prohibits moonlighting. He believes the clause will stop employees from going for dual employment.

Godrej Capital CHRO Ruhie Pande adds, “There are several corrective measures that can be introduced which include tracking performance outcomes/measure and monitoring employee log-in/remote working activities and schedules.”

Meanwhile, Harikrishnan holds the opinion that moonlighting can be dealt with in a two-step process. “Employees need to ask for such opportunities and policies if they want it; which would then challenge organisations to think through how to make it happen, if they are not doing so already.”

Harikrishnan says that moonlighting could, in the near future, become an industry norm. For that, Harikrishnan suggests, corporates need to make peace with the gig economy and accept that it is likely to emerge as a new means of hiring as opposed to the traditional full-time mode of employment. “Organisations that continue to structurally resist this phenomenon could be at risk of losing out on that pool of diverse talent. If this picks up slowly in time, they even run the risk of conflicts at the workplace by retaining talent who actively seek opportunities to moonlight in other companies,” she adds.

Legal angle

Almost everyone knows that confidentiality and conflict of interest clauses in the employment contract are legally binding and overstepping these could lead to termination. But what happens if the two jobs are in completely different domains? What if an employee has two jobs - one in media and the other in a tech company?

To this, Arjun Paleri, partner at BTG Legal, who specializes in HR laws, says: “When considering breach of confidentiality and conflict of interest, the type of industry will have low relevance if there is a prima facie breach... In other words, it is not a valid defence that there is no breach of confidentiality or conflict of interest if a person works for two employers but in different industries.”

Another commonly asked question is if freelancing or having a side gig along with full-time employment is legally permissible. “The risk of moonlighting is not reduced if a person works as an employee on one hand and as a freelancer on the other. The restrictions in the employer’s policy against moonlighting are normally very broad and cover any form of direct or indirect employment either as an employee or as a freelancer,” Paleri says.

Paleri, however, clarifies that there is no IPC section which specifically prohibits moonlighting. “Moonlighting is usually governed by contractual requirements and obligations; it is unlikely to be treated as a criminal offence. However, if the moonlighting itself leads to criminal actions by the employee, then the risk of action under the IPC cannot be ruled,” he adds.

Paleri, much like Bhargava, recommends adding a moonlighting clause in the employment contract. “At the very least, every employment contract should have a provision which prohibits moonlighting and dual employment in any capacity,” he concludes.