In India, employees of a company often engage in additional work so that they can earn additional income. There are cases where it’s difficult to get a job due to the competitive market due to which employees often engage in additional work with other companies. Now, the question is where does moonlighting hold a legal position in India? This article will discuss the concept of moonlighting and also the position of the same in India.


The Concept of Moonlighting

Moonlighting means that an employee takes additional work outside his or her job so that there can be earnings of extra income from the job. Here, the employer has no knowledge about the extra work taken by the employee of the company.

Reasons for Moonlighting

There are several reasons why moonlighting is done by employees in the course of their employment. The reasons are as follows:

  • The passion for other work is what makes the employee change the job without informing the employer. An employee who does not like his or her existing career usually prefers to make a switch to explore better opportunities in life.
  • Lay-offs in the big companies are a reason that makes employees look for a second job so that the lay-off doesn’t create a financial crisis in case, the company lays off its employees due to financial losses.
  • Financial stability is another reason due to which people look for additional sources of income to earn their livelihood.

Relevant Legal Provisions for Moonlighting

Under Section 27 of the Indian Contract Act of1872, any clause during an employment contract in an organization that prevents a person from exercising a profession would be alo initio in nature, as non-compete clauses are unconstitutional in nature. Indian courts have already said that such clauses in employment contracts are against public policy. However, Section 8 of the Industrial Employment (Standing Orders) Central Rules of 1946 prohibits the workman engaged in any industry from taking any kind of additional employment in addition to their current job. Section 60 of the Industrial Employment (Standing Orders) Central Rules, 1946, is an exceptional cause because it allows dual employment in the cases prescribed by each state government.

Double employment is also restricted by state-specific regulations such as the Delhi Shop and Establishment Act, 1954, which forbids work in more than two establishments for a longer period of time than the employee may be lawfully engaged under the Act.

While there are some laws which prevent others from engaging in other professions, the Section 27 of the Indian Contract Act of 1872 acts as a contradictory clause as it prevents employers to prevent employees to join other firms. Now, one needs to understand how the courts in India interpreted such clauses.


Case Laws

In the case of Superintendence Company of India (P) Ltd. v. Krishan Murgai (1980), the Supreme Court of India focused on the importance of the employer’s interests and also the interest of the employee in their livelihood. There was a significance as per the court to strike a fair balance between the employer’s right to protect the interests of the business and also the employee’s right to pursue a profession and earn a livelihood, which was also emphasized in this judgment of the Supreme Court of India. Here, the final decision of the Court was that the non-compete convent clauses must be tailored in a way to protect the rights of both the employers and the employees of the company.

There would be termination of employment if an employee was engaged in additional employment with another company. This judgment was passed by the Punjab and the Haryana High Court under the case of Gulbahar v. Presiding Officer, where there was a driver who was terminated from his employment after it was discovered that the driver was also working with another company. This had caused the respondent of the case to dismiss the petitioner from his course of employment. This judgment is very important as it clearly explains that during the course of full-time employment, an employee cannot engage in employment with another company as it conflicts with the interests of the employer.

Final Conclusion

In conclusion, the courts in India have been successful in interpreting the laws in the interests of justice for the protection of the rights of employers and employees. If there are laws to protect the interests of employers, then there are also laws to protect the interests of employees.

Contributed by: Abhiraj Singh

Sushant University (2021-26)

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