Regulations Need Transformation to Accommodate Moonlighting
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Regulations Need Transformation to Accommodate Moonlighting as Until Then, Pro and Anti Tussle Will Continue On Both Sides Unabated


Karma Management Global Consulting Solutions Pvt. Ltd. one of the top 5 consultancy firms, was established in the year 2004, with headquarters in the business district of Santacruz East, Mumbai, India, and full-scale operation in all the States having about 200 direct and indirect staff on its roll is a leading service provider for payroll and payroll compliances, outsourcing, facility services, HR services, Training & Development, Recruitment & Talent Acquisition, Legal and Para legal services, Disputes and Litigation Handling,  Inspection Management and Liaisoning, Advisory Services, Social, Environment and Vendor Audits, Regulatory compliances ad Governance.

Compliance with labour and employment laws has become one of the most important issues that many establishments in India have to deal with. Many employment disputes result in litigation.  Karma is an Indian HR, Payroll, and Compliance firm advising clients worldwide on local, regional and global regulatory compliances in relation to their business goals, business strategies, and resolving disputes.

It gives valuable suggestions and advice to corporates, investors, institutions, contractors, establishments, industries, etc. on the need for lowering employment risk across all levels and adhering to the laws of the land. It has a lot of expertise on employment-related compliance issues, as well as day-to-day support for the human resource department and in-house counsels. Karma is also into employment agreements and policies, structuring of compensation and benefits, employment aspects of mergers and takeovers, etc. 

Karma’s force, strength, and reach have brought in tremendous change over from its earlier image of being a consultancy firm in the period of 2000, to now embarking on setting practices abroad in highly regulated markets and competing in the global arena.  

With India overtaking the UK to emerge as the fifth largest economy in the world and setting to become the third largest by2029, Karma Global is all poised for long-term value in terms of client outreach and giving state-of-the-art technology and excellent services to global clients better than ever before,


For the sake of good reading and understanding, let us take a look closely at whether the laws are capable of biting this new so-called phenomenon of covertly taking up additional work!!


The Factories Act 1948 –

The Factories Act 1948 u/s 60 prohibits dual employment. However, this is limited to factory workers and does not govern other sectors of employment.


A.P. Shops Act

Under the AP Shops Act, no employee is allowed to work in any establishment. In the case of full-time employment, the employee is generally expected not to take up work for another employer, including while they are serving their notice period for their existing employer.


Delhi Shop Act

Delhi Shop Act states that no person shall work for the business of an establishment or two or more establishments or an establishment and a factory for a period in excess of which he may lawfully be employed under the act.

Bombay Shop Act,

Bombay Shop Act, which provides in section 65 of the act that no employee shall work in any establishment, nor shall any employer knowingly permit an employee to extend services to another establishment on an off day as per the Act.


Industrial Employment (Standing Orders) Act

U/s 8 of schedule I-B the Industrial Employment (Standing Orders) Central Rules, 1946 states that a workman cannot by doing dual employment work against the interest of an industrial establishment.

The draft model standing orders under the Industrial Relations (IR) Code contain a similar restriction; however, the employer may, at their discretion, permit the worker to take up an additional job or assignment with or without conditions.

The above laws have limited application as they do not cover certain establishments and categories of employees.


In India, there is no legal restriction on dual employment in certain States.

However, in the absence of a specific legal prohibition, it is advisable to include such a restriction in the employment contract. Moonlight clauses are added to the employment agreement with the aim of ensuring the efficiency and focus of employees at their current employment.

If the employment letter does not forbid dual employment and there is no non-compete clause, an employee can engage in moonlighting.


New labour codes

Indian laws do not define ‘moonlighting’. However, the laws mentioned below regulate dual or double employment to a certain extent.


Views of the Courts

 The Supreme Court, while deciding the eligibility of a LIC employee for the membership of a local authority, observed that the restriction is not on the candidature for election but on the nature of employment itself.

The court further observed that if the employee participates in local administration or other elections, they may well have to forfeit their position as a government servant if handling two positions affects their efficiency. They might also be subject to disciplinary action.

The High Court of Punjab and Haryana upheld the termination of employment of a driver who had engaged in dual employment.

Moonlighting may also be coupled with other issues such as a conflict of interest, breach of confidentiality and/or proprietary information, competition, solicitation of co-employees or vendors, compromise of intellectual properties, and attrition.


Dictionary meaning of Moonlighting

The dictionary defines the term moonlighting as working clandestinely in a second job, typically at night.

Moonlighting essentially means the pursuit of a job carried out by an employee of a company after his regular office hours.


Is freelancing the other name for it

This is not even Freelancing as freelancers work for many companies simultaneously and are not permanent employees of a certain company.


Is the Pandemic the cause of moonlighting

It evolved as an adjunct to the now-accepted norm of working from home (WFH). The pandemic became the trigger both for WFH as well as work from literally anywhere. Young professionals shifted base to beaches and mountains from where they were able to conduct their work activities without a hiccup. Along with this change of location, they found they could also juggle several assignments or projects from different corporates with the same seamless ease.


Who says cheating and two-timing, let us see!

  • Wipro took the unprecedented step of sacking 300 employees for indulging in this activity.
  • Wipro’s actions have sent tremors through India’s $227-billion information technology industry as the debate rages over whether this is the right response to the issue
  • On September 16, Infosys sent an email to its employees, reminding them that they were not allowed to hold dual employment
  • Tech Mahindra, a mid-sized IT firm, has said, it may consider framing a policy that allows dual employment, as long as “someone is meeting the efficiency and productivity norms.”


Views of the Minister

Meanwhile, India’s minister of state for electronics and information technology, Rajeev Chandrasekhar, came out in support of the practice, saying, “This is the age of employee-entrepreneurs and companies must now understand there has been a structural shift in the minds and attitudes of the young Indian tech workforce


What is the approach taken now?

Some employers are ranged on the side of Wipro, but others are taking a different approach, prepared to accept moonlighting activities as long as employees are transparent about it.



In this country, the privilege of WFH and working for multiple employers is confined to a few sectors but the trend is expected to spread rapidly in the future.

Recognizing the fact that moonlighting is going to be a reality in the technology workplace of the future, some corporates are trying to embrace the concept so that it becomes a win-win for both employers and employees.

Those on the other side of the divide, including giants like IBM and industry leaders like Infosys, are sticking to the norms surrounding the traditional systems of full-time employment where moonlighting becomes an illegal activity.

Undoubtedly, they have concerns over confidentiality and losing out to competitors. Bringing about transparency would allay much of these fears as employees would be able to share information about their extra projects or assignments.

But it must be conceded that employers are not worried about start-ups, they are more focused on the possibility of their patented data being handed over to direct competitors.

It is for this reason that transparency needs to be brought into the process, so that employees who are seeking to either upgrade their skills or simply make more money are allowed to achieve their goals, without compromising on issues of data privacy.

In fact, IT employees are reported to have stressed that one of the major factors for taking on extra assignments beyond their day jobs is to upgrade skill sets in the industry where technology quickly becomes out of date and where it is imperative to remain on the cutting edge, whether it is in terms of artificial intelligence or other high-tech areas. This is enabling them to become employable in more lucrative fields in the long run. So, while earning more is important, it is not just about the money.

Furthermore, moonlighting may be considered unethical if an employee’s contract includes non-compete clauses and exclusive employment, as is the case with the vast majority of traditional employment contracts.

If employment contracts do not include this clause or provide exceptions, it may not be considered a breach of confidence or trust by the employees.

Karma is a fully home-grown successful Organization, operating both with contract employees as well as with the permanent type of employees who are placed in the locations of global and domestic clients.

Karma has traditionally been a dynamic regulatory compliance-driven organization with an integrated and up-to-mark approach to HR Services.

Karma has always set its sights on keeping a tab and interpreting the regulatory changes in the manner required by authorities with a focus on the implementation of these new rules coupled with the adeptness to sophisticated technology, which has placed them in the top 5 today as far as HR Service Organization is concerned.

Karma’s experts at the office catering to over 400 clients are fully intertwined with the workflow and processes that are leading most of its clients to convert their value drivers into the transformation of their businesses.

 Karma’s technology securely integrates regulatory compliance across all types of businesses from trading to operations to investor services to financials and banks while also providing the clients access to these technologies with the power to control process operations with a dashboard and ready updates on the workflows done monthly and timely as per stipulated dates set by the authorities.

The greatest satisfaction comes from the outflow of communication to clients for future reviews and analysis of the monthly work done with data visualization tools that surface their activities done by the professional team of Karma in its corporate headquarters in Mumbai and Branch Offices in Bangalore, Tamil Nadu, Gurgaon, Gujarat, etc.


Proprietary blog of Karma Management Global Tech Firm

This blog has been collated and compiled by the internal staff of Karma Management with the knowledge and expertise that they possess, for its monthly newsletter Issue 05 of November   2022 in case of specific or general information or compliance updates for that matter, kindly reach out to the

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