The term "moonlighting" refers to doing many jobs in addition to one's regular job. Moonlighting is the phrase used to describe the practice of working for other organisations while dedicating oneself to one's primary workplace, usually without the employer's knowledge.  While employees believe they are well within their rights to take up additional employment in their personal time, companies believe that this is unethical and a breach of confidentiality.


The main reason for rise in moonlighting among the white collar professionals in India is the pandemic which has exacerbated the situation and work from home model which has led to compliance issues within the companies and has agitated a debate over the issue. Moonlighting by employees post the pandemic has gained prominence with many IT firms raising the issue. It has taken the IT industry by storm and has received viewpoints with some in support and some in opposition.


What does the Indian Law say?


Indian laws does not define ‘moonlighting’ or deal with dual employment. However, prohibition with regard to the inclusion of a non-compete clause is laid down in Section 27  of the Indian Contract Act, 1872. Non-compete Clause prevents an employee from starting his own business or accepting an offer from a competitor.

The Supreme Court in Niranjan Shankar Golikari versus The Century Spinning & Mfg. Co. (1967)  upheld the non-compete clause of an employment contract, thereby preventing an employee from joining their employer’s competitor during the term of the employment contract. The court further held that a negative covenant can be enforced only if it is reasonable, and not excessively harsh and one-sided.

The Delhi High Court, in Wipro Limited v. Beckman Coulter International SA (2006)  held that non-solicitation clauses which impose a duty upon the employee to not disclose and solicit clients are permitted. Even the Madras High Court, in Government of Tamil Nadu versus Tamil Nadu Race Course General Employees Union (1993)  observed that dual employment will be permitted if there is no prohibition in the employment contract or if the employer consents. Thus, in order to avoid indulgence in moonlighting by an employee, the contract of employment must be examined.

Moonlighting could be considered cheating if an employee’s contract calls for a non-compete clause and single employment, which is the situation with the majority of conventional employment contracts. However, it is not cheating if the employment contracts do not have such a clause or provide relaxations. However, the laws mentioned below regulate dual or double employment to a certain extent.


The Factories Act, 1948

Section 60 prohibits dual employment. It restricts an employer from requiring or allowing an adult worker to work in the factory on any day on which they have already been working in another factory. However, this is limited to factory workers and does not govern other sectors of employment.


The Occupational Safety, Health & Working Conditions Code, 2020

Section 30 states that “No worker shall be required or allowed to work in a mine or factory if he has already been working in any other such similar establishment within the preceding twelve hours, save in such circumstances as may be prescribed by the appropriate Government”.


The Shops and Establishments Act

Every state has its Shops and Establishments Act.


Section 65 of Shops and Establishments Act, Bombay:

It says that: ‘No employee shall work in any establishment, nor shall any employer knowingly permit an employee to work in any establishment, on a day on which the employee is given a holiday or is on leave in accordance with the provisions of this Act.’


Section 9 of Shops and Establishments Act, Delhi:

It says: ‘No person shall work about the business of an establishment or two or more establishments or an establishment and a factory in excess of the period during which he may be lawfully employed under this Act.’


Other states that have put a restriction on dual employment are Assam, Telangana, Mizoram, J&K/Ladakh, Daman & Diu / Dadra & Nagar, Goa, Andhra Pradesh, Puducherry and Meghalaya.


The Industrial Employment (Standing Orders) Central Rules, 1946

Under section 8 in its Schedule I B, this act issues an order for ‘exclusive service’. It says:

“A workman shall not at any time work against the interest of the industrial establishment in which he is employed and shall not take any employment in addition to his job in the establishment, which may adversely affect the interest of his employer.”


Is Moonlighting Ethical?


In the last couple of years, moonlighting has become a big concern in the IT industry due to loss of productivity and skilled workforce. The moonlighting clause is a ‘Negative Covenant’ i.e. a clause that restricts employees from performing ‘moonlighting’ or having more than one job at once. This clause is agreed upon and signed with the consent of both the parties i.e. the employee and the employer. An employer conveys the Moonlighting Clause to the employee via an offer letter, an agreement or an employment contract. In India, this clause is enforceable and it can be enforced wherever necessary. Going by the contract if it includes non-compete clause or exclusive employment, any employee who is moonlighting, especially with competition is in clear violation of the contract both in law and spirit.


The perspective on the issue of moonlighting remains divided. Whereas Employers regard it as unethical, cheating and  deceitful, the employees does not see much harm given growth and additional income. The companies should have clear policies defining the terms of employment and restrictions stating whether the employment is on a full-time basis or the employee is allowed to be employed in any other organization on a temporary or part-time basis, without the prior consent of the employer.


Thecompanies are reaching out to law firms pursuing help in redrafting employment agreements, figuring out loopholes, formulating contracts more vigorous, enforcing regulations, or what kind of policies can be formulated to confirm that employees treat their employment as an important job, set out restrictive alliances from taking jobs with competitors during employment and ways to preserve themselves in terms of privacy.The companies wants to ensure contracts are more watertight and clear boundaries laid down.