Article: ‘Moonlighting is an idea whose time has come, mindsets need to change’

Employee Engagement

‘Moonlighting is an idea whose time has come, mindsets need to change’

Organisations need to reimagine age-old employment contracts and work on a framework to enable moonlighting rather than pushing it back in the post-pandemic world, say industry experts.
‘Moonlighting is an idea whose time has come, mindsets need to change’

Rishad Premji, executive chairman of Indian IT services giant Wipro, last week revealed that the company terminated 300 employees after finding out that they were working for one of its competitors at the same time.

He had termed moonlighting, or the practice of taking up extra jobs or multiple work assignments outside while working full time with an organisation, usually without the employer's knowledge, a complete violation of integrity "in its deepest form".

Moonlighting has taken the IT industry by storm with major players coming out strongly opposing the practice, calling it unethical, cheating and a violation of integrity.

Premji also sparked a debate last month by tweeting his view on the practice. “There is a lot of chatter about people moonlighting in the tech industry. This is cheating - plain and simple,” he tweeted, leading to another round of chatter on social media among professionals on the issue.

Weeks after Premji’s tweet, another IT major, Infosys, echoed similar sentiments and warned its employees that moonlighting could lead to termination, and was followed by US-based IT major IBM making it clear that moonlighting, as a practice, is not ethical and the company does not promote such behaviour at the workplace.

"All of our workers when they are employed, they sign an agreement which says that they are going to be working full-time for IBM. So moonlighting is not ethically right for them to get into,” said Sandip Patel, managing director, IBM India.

All this is in contrast to food delivery start-up Swiggy's latest employee-first ‘Moonlighting Policy’ which allows its employees to pick up gigs or projects beyond work that add to their professional and mental well-being. However, this is subject to approvals.

However, there is a difference between a Swiggy driver working for Amazon vs a software engineer working for the same client through two companies.

“The idea of a Swiggy rider also working for Amazon or an Uber driver also driving for Ola is NOT moonlighting! They are all gig workers. Moonlighting is when an individual employed by a company also does paid gigs for others,” says Hari TN, co-founder, Artha School of Entrepreneurship, author and an angel investor.

Employers' perspective on the issue of moonlighting remains divided. Whereas some regard it as cheating/deceitful and, therefore, unethical, others do not see much harm, provided that the freelance project, or second job, does not impact the  employee’s productivity or involve cross-leveraging of confidential data.

“Consequently, based on business requirements, including confidentiality and intellectual property rights (IPR) issues, an emergence of company policies that are either restricting moonlighting and dismissing defaulting employees from service, or allowing their employees to take up internal or external gigs, is being observed,” says Minu Dwivedi, partner at corporate law firm JSA.

Rohitash Gupta, an ex-CFO at an NSE500 firm, feels the noise against moonlighting is just the latest expression of the same age-old struggle that human history is filled with - old gen versus new gen, an attempt to tilt power in favour of the already powerful, maintain status quo, etc.

“We know who will silently lose this battle, but employers are probably delaying accepting the defeat,” he adds.

Moonlighting also found support from union minister of state for electronics and IT and skill development Rajeev Chandrashekhar  recently. 

While addressing an event of the Public Affairs Forum of India (PAFI) on Friday, Chandrashekhar said this is the age of employee-entrepreneurs and the corporates, and companies must now understand there has been a structural shift in the minds and attitudes of the young Indian tech workforce. “The days when employees signed up with big tech majors and spent their lives on the job were long gone. 

Chandrashekhar added that today’s youngsters have every sense of confidence and purpose about wanting to monetise, create more values…So, the efforts of companies that want to pin their employees down and say that you should not work on your own start-up are doomed to fail. 

“Any captive models will fade. Employers expect employees to be entrepreneurial while serving them. The same people can apply it personally to themselves," he said, adding that a time will come when there will be a community of product builders who will divide their time on multiple projects. Just like lawyers or consultants do. "This is the future of work."

He, however, agreed that moonlighting should not be in violation of any contractual obligations.

What does the law say?

Moonlighting in all forms - another full-time job, part-time job or side hustle - has been clearly prohibited in most employment contracts present today as well as laws.

“In India, certain statutory provisions provide for exclusive service and impose restrictions on double employment such as the Delhi Shops and Establishments Act, 1954, the Factories Act, 1948, and the Industrial Employment (Standing Orders) Central Rules, 1946. Further, restrictive covenants in employment contracts which are intended to operate during the subsistence of an employee’s employment are also enforceable under the Indian laws. Hence, the contractual provisions against moonlighting will be enforceable by employers against a defaulting employee,” Dwivedi says.

Industry experts say most of the employment contracts prevailing today are remnants of same age-old one-sided agreements in favour of employers. Employees have to sign blindly because they have no power left once they have accepted a particular job offer.

“Without taking the cover of an unfairly drafted employment contract, can a company come out and say that what their employees do during their spare time is a violation of a contract? And then expect that employees will continue to give their best and not consider forming employee unions?,” contends Hari in an article in Founding Fuel.

“When a client pays a services provider, like say Wipro, for 8 hours of an employee’s time, is it fair for Wipro to prevent that employee from doing what she wishes to do beyond the 8 hours? Even in outcome-based contracts, is it fair for a company to say that their employees are not allowed to do what they want to do in their spare time? Even after returning home from work, is an employee not allowed to indulge in her passion for painting and putting up her paintings for sale at an art gallery? Will Wipro determine what she does over the weekend and in her time-off? Does this constitute moonlighting?” he asks.

Gupta says to be able to guess the future of moonlighting, one needs to look at what happened to all the other sacrosanct legal clauses in the same one-sided employment contract - e.g. confidentiality, protection of IP, no conflict, non-solicit, and non-compete.

He notes that any employee, who is changing jobs, starts searching for a job, on average of six months, before actual resignation, or in other words, while employed, they are giving interviews in competing firms, potentially sharing confidential know-how gained at the current employer.

Most junior to mid-level employees invariably join a competitor within the non-compete period and then most successful startup founders did side hustle and their unicorns were born while they were employed in large firms.

A leading example, he says, is Steve Jobs, after having a dispute with John Scully, created a competing company called Next by poaching Apple employees. "There goes non-solicit, IP and non-compete clauses of today."

The Ambanis, Musks and Adanis create new companies every now and then and successfully run those companies in parallel and are seen as visionaries, says Gupta, adding that nobody tells them that their attention will be divided.

Independent directors (probably the highest governing role in a public company) are allowed to be running their own full-time business and be independent directors in seven public firms and many more private firms - are their attention, and interest not divided? he asks.

Gupta also says that employers themselves hire contract staff for the same job roles for which they concurrently hire full-time employees and many times pay much higher. Since contractor staff are not explicitly barred from taking up other jobs, such employers are definitely not averse to the concept of moonlighting and just that they want it to happen on their watch, want it to control it and allow it when it suits them.

“Employers are aware that their sacrosanct employment clauses have been blatantly violated every single day by countless seemingly powerless employees and yet they refrain from taking legal action for good business reasons. Name-calling such people as cheating is a preposterous knee jerk reaction and neither explains the business problems of moonlighting nor paves the way for a mutually acceptable solution,” he contends.

For example, when a client-vendor dispute arises, most mature business people sort it through negotiation and make a contractual amendment to effect the revised understanding and neither go to the media calling each other cheats, nor move courts for contractual breach, he says, recommending that organisations need to deal with this issue in a mature way while keeping the future in mind.

What should a good/ unambiguous moonlighting policy look like ?

Hari says companies can establish a few reasonable restrictions on what their employees can or can't do. For instance, they can say that disclosure of confidential information is unacceptable. Working for a set of named competitors is unacceptable. And employees must give a certain number of defined hours to the company (say 45 hours a week).

Beyond that, what employees do is none of their business. Not should an employee have to disclose this. It's a violation of an employee's privacy rights.

Gupta lobbies for the need to evolve mutually beneficial solutions. Just like whistleblowers get protection in most companies, similar protection should be given to people who disclose their other gigs.

“This will allow companies to know about any potential conflicts etc and assert some degree of control. Employers can also give option to full time employees to move to fixed term or part-time contract if they are found doing other undisclosed non-conflicting gigs. Companies who want to prohibit moonlighting at all costs can surely do so but should set an example at the top to earn a moral right.The board of directors and CXOs should not take up any role or pecuniary interest in unrelated companies or businesses. Companies should think hard on how to achieve the goal of paying per output and outcomes rather than a mere number of hours,” he adds.

Raj Tanwar, chief strategy officer and HR head at global employee engagement platform Advantage Club adds that from a policy framework, all risks in COEBC (Code of Ethical Business Conduct) must be covered.

“There are some deal breakers such as breach of non-compete, working during stipulated hours, data security, IT or other assets misuse, cross-selling (selective), performance dropping, POSH and many other aspects which we would cover to maintain a good working culture.

"On the softer aspects, we must provide excellent support on factors like well-being and educate on how to balance it or deal with health impacts as deemed fit,” he adds.

Gupta feels newer and smaller organisations with hunger to differentiate themselves against the powerful large companies will change their policies first to accommodate moonlighting, albeit with some degree of control and oversight. However, larger companies may be the last to accept it and will first spend most of their energies in lobbying with regulators, setting legal precedents etc.

Among the labour law reforms that are in the pipeline, the Occupational Safety, Health and Working Conditions Code, 2020 imposes a restriction on double employment in a factory and mine. 

“However, the draft Model Standing Orders for the Services Sector, 2020, which will be applicable to the IT sector too, while retaining the provision on 'exclusive service' goes a step ahead by enabling workers to take up an additional job/assignment with their employer’s prior permission and subject to conditions, if any, imposed by their employer,” Dwivedi says.

Is moonlighting more conducive to certain industries or roles?

Moonlighting is more possible in a sustainable way for knowledge industries, with high demand for certain skills and which allow WFH or hybrid, feels Gupta.

“Blue collar jobs and the informal sector have an age-old accepted tradition of moonlighting the world over and that is neither an issue nor a new trend.”

Critical considerations for HR leaders on moonlighting

HR leaders should not think like lawyers and should start to think like fellow employees and humans doing justice to the word "human resources", says Gupta.

“The framing of the question needs to change from 'moonlighting is cheating' to 'moonlighting is an issue for my business because....' or 'will moonlighting be called cheating a decade ahead?' - such alternative framing of the problem will pave the way for a mutually beneficial future. Critical considerations while permitting moonlighting are giving employees fair choices, protecting confidentiality, respecting personal time and privacy, and measuring productivity for the pay to be able to say whether it works for them or not,” he adds.

Tanwar says there was so much talk about contractual, part-time, retainers, gig workers but they finally had to be accommodated. The same is true for moonlighting.  “Accept it today rather than being late and use it to your advantage to create a strong EVP and stand out as an employer of choice. It's in your hand whether you see it as a threat or as an opportunity,” he adds.  

Is ethical moonlighting the way ahead?

“Of course, it's an idea whose time has come. Mindsets need to change. If a company sticks to old fashioned ideas in a new world, it will fail to attract talent,” says Hari.

Tanwar too feels that it is the need of the hour.

“Encompassing all perspectives, we have to work on a framework to enable it rather than pushing it back. Also, not everyone will be adopting moonlighting in the same way as not everyone is a part of the gig or contractual workforce. Still, we have robust frameworks to enable such types of employment or engagements. In the same way, we need to find ways to allow/enable moonlighting.

“For a minute, we have to think of moonlighting as a concept to fulfill our dreams, not as a medium to earn money only i.e. there are loads of people with different passions, but due to parental pressure, they adopt another career. So today if they wish to live their dreams again and can make some money too, why not? It does add up to make a great place to work,” he adds.

Gupta says we do not yet know in which shape and form and after which external shock will the final avatar of moonlighting emerge, while two other important things that are happening behind the scenes.

Definition of Privacy - Data privacy acts in the future will probably make it impossible for employers or any institution to know what their employees are doing outside their job. Employers may not be able to charge employees for misrepresentation about their moonlighting gig in a court of law if the employee takes a fifth amendment in the US or uses rights given in the Indian Constitution under article 20(3).

Definition and value of time - Employees world over want clarity on the definition of "Full time". Is it 24x7 or 40 hours a week? Legally it is 40 hours a week while archaic employment contracts hint at 24X7 control. Recent noise about a young Prime Minister dancing at a private party is a demonstration of a similar archaic mentality where a full time role person is supposed to be doing work 24x7.

“Best is to work with the trend to be able to shape the future rather than work against it,” he notes.

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Topics: Employee Engagement, Culture, Strategic HR, #FutureOfWork, #GigEconomy, #HybridWorkplace

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