Analysis of Dual Employment Laws in India

Analysis of Dual Employment Laws in India

Date : 03 Apr, 2021

Post By Adv. Rashmi Kumari

India is what economists call a labour surplus country that there is a surplus of labours in India. All these are attributed to the population of our country as being the second-largest country in the world in terms of population.

A large number of people working in the private sector are compelled to work long work hours and are paid less than minimum wages. This forced people to take double employment to meet their expenses.

Dual Employment or Double Employment is a generic term that means holding two employments at the same time. That is when an employee holds a full-time position and payroll with one employer and takes on additional employment with another employer. This definition may vary according to different sectors.

The concept of dual employment or double employment is still ambiguous in our legal system. It is known that in our circumstances the major reason for double employment is the oppressing working condition and lack of minimum wages. In order to constitute double employment, a person should be a hundred percent employee in one organization and extend his service to a similar establishment or organization.


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Organizations are not in favor of dual employment as it affects the efficiency of the employee. The efficiency of the employee will go down as handling two jobs at a time is tiring. The jobs may interfere with each other. The other thing which concerns the firms is that it will affect the confidentiality of their clients as there will be a conflict of interest. So dual employment is a cause of concern to companies as it affects the quality of their products.

The labour regulations in India can be said to broadly regulate the aspects of employment relating to Working conditions, Industrial relations, Wage, Welfare, and Social security. There is no provision under the Indian labour laws barring dual employment. Thus the Indian employment laws provide no specific provisions dealing with the legality of dual employment.  But in the case of employees working in factories section 60 of the Factories Act 1948 lays restriction on double employment in India. The provisions of the act apply to only those who are working at factories. According to the act, an adult worker shall not be required or allowed to engage in double employment.

The provisions contained in section 60 of the Factories Act 1948 apply only to factories and not all organizations come under the definition of factories under the act. Thus the provisions of the act which relate to double employment do not apply to those organizations which are not factories. 

In the case of institutions or organizations which do not fall within the meaning of factories under the Factories Act, they should provide clauses in the employment contract expressly and clearly regarding barring of dual/double employment. Through such clauses, they should unambiguously ban dual/double employment.

Along with the Factories Act, there are several specific state-wise enactments that are applied to organizations not covered by the IT act. The shops and establishment act lays down provisions applicable to organizations not covered by the Factories Act.

 The act contains provisions regarding dual employment in the same institution in India. The act is state legislation.  Since the shops and establishment act is a state legislature it is different from the factories act. The scope of the act may change from one state to another but it can be stated that the act provides for a bar on employment in the same institutions or organizations after work hours.

Thus the shops and establishments act would apply to organizations not mentioned as factories in section 2 (m) of the factories act. If we analyze various state enactments,

The Bombay Shops & Establishments Act: According to The Bombay Shops & Establishments 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.

The Delhi Shops and Establishments Act: The Delhi Shops and Establishments 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.

Industrial Employment (Standing Orders) Central Rules: Under section 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.

It is to be noted that the term dual/double employment in the shops and Establishment act is different from what is stated in the Factories Act. As per the provisions of the act, there is a direct obligation on the employee not to work on off days anywhere and puts an obligation on the employer not to permit such employment. The intent behind all the employment laws is the same even though the interpretations are different. 

Moonlight clauses: Moonlighting clause is an agreement of service which contains negative covenants restricting the employee from working elsewhere during/after the period covered by the agreement. It is used by employers as a  measure for protecting the company’s interest and for ensuring that employees provide their full time and energy to their current job. It is a clause that contains a negative covenant putting restrictions on the double employment of an employee. Thus, it restricts an employee from taking any other job while being employed by another employer. Moonlighting means holding another job during the working hours of employment. Moonlight clauses are added to the employment agreement with the aim of ensuring efficiency and focus of employees at their current employment. The condition for the moonlight clause is that it must be included and signed with the free consent of both the employer and employee. In India a moonlight clause is enforceable and it can be enforced under the law whenever necessary.

In an employment agreement in order to avoid dual employment, the employer should mention dual employment being a ground for termination of employment. This way he can ensure that dual employment is against his terms of employment.

 

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Even though the Indian labour laws are silent on the aspect of dual employment, dual employment is considered a valid ground for termination of employment. Employers can specify this on the employment agreement. Dual employment being an act which affects the wellbeing of individuals and organization the laws and courts accepts the actions taken against dual employment. The courts did not hold that termination on the ground of dual employment is a violation of the worker’s right. To tackle dual employment companies introduce moonlight clauses in their employment agreements. HR policies of the organizations should also establish a stand on dual employment by making a proper framework. Apart from legislation, what employers can do is to include moonlight clauses. The term itself means doing another job during the hours of principal employment.

Thus the Indian employment laws and regulations have the same intention in the case of dual employment. Man being a social animal requires family, social life, and rest, he is not a machine. Thus adequate rest and leisure time is necessary for the well-being of the individual and the society. The provisions of Indian employment laws are against dual employment.

Under the guidance of Advocate Rashmi Kumari, this article was written by Mr. Kamal M, BSc. LLB, Government Law College, Trivandrum.

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