Moonlighting and dismissal

[manhav]

Moonlighting refers to the situation where an employee hold a second job, whilst in the service of the employer.

The question I want to ask is whether the fact that the employee holds on a second job, with or without the consent and permission of the employer, warrants a conclusion that there exists a breakdown of the trust relationship between the employer and employee, which in turn would make the continued employment relationship intolerable. In other words: May I dismiss an employ who is moonlighting?

Moonlighting presupposes an employee offering services to two employers in exchange for reward. It may vary from an employee merely trying to raise extra cash, to a situation where the employee effectively – whether directly or indirectly – competes with the business of the employer thereby deriving secret profits.

I am of the opinion that we must first consider the employment contract and/or company policy. Thus, if the employment contract or policy prohibits moonlighting, then an employee who engages in it commits an offence that should be dealt with according to the applicable prescripts of that employment policy.

However, if the employment contract or policy requires that an employee should obtain prior permission from the employer before engaging in moonlighting, then the employer must ascertain whether the employee has not obtained such permission and deal with him accordingly.

In the absence of any provision from the employment contract or policy dealing with the issue of moonlighting, it will be legally wrong to discipline the employee on the basis of misconduct. Instead, the employer may have to investigate the impact that the moonlighting has had on the work normally carried out by the employee. Should it be found that moonlighting negatively affected the employee’s performance, then a disciplinary course to be followed would have to be the one of a form of incapacity known as ‘poor work performance’ for which item 9, schedule 8 of the Code of Good Practice: Dismissal (the Code) set out the necessary guidelines.

The absence of a clause or provision in an employment contract or policy prohibiting or regulating moonlighting, means absence of a sanction if an employee engages in moonlighting. As such, an employee who is found to have engaged in moonlighting cannot legally be accused of having broken the trust relationship merely by moonlighting.

I think that everyone will agree with me that moonlighting has practical implications of depriving the employer of the full attention and skilled services of its employees.

On the other hand, it is equally true that the employers cannot unreasonably deprive employees the right to engage in additional external remunerative employment where the intention is merely to gain extra cash as opposed to prejudicing the employee, provided permission is first sought, if moonlighting is regulated.

Thus, in order to prevent uncertainties, moonlighting has to be regulated and controlled. Policies must be put in place and their terms must be incorporated in the employment contract for employees to know and appreciate the consequences of breaching them.

Our courts cannot readily assume and accept the breakdown of the trust relationship – the employer have to present persuasive evidence thereof. I will over the next few days discuss some relevant case law on my blog, and you are welcome to follow my blog for a discussion of these cases.

[AndyD]

Moonlighting is rarely that clear cut. Apart from using skills often attained at one place of employment to earn extra money in another job, there is usually an issue with company transport being used for non-company business, this can lead to insurance complications etc. Also company petrol, and tools, safety equipment, clothing with company logos, may be involved as well as a possible conflict of interests and even intellectual property misappropriation if the moonlight job is a competitor. There's also the company reputation that can be damaged by unsupervised employees moonlighting without a quality control structure.

The legislative aspects of this one only scratch the surface.

[desA]

A company has no right to 'own' an employee - this is a violation of their human rights.

It is generally accepted international practice that an employee is paid for the time he/she works at the place of employment. If the employee manages to hold down a day job, but can successfully manage alternative work after hours, without prejudicing his day job - then there should be no contest. This alternative work can take on various forms - own business, family business, hobbies etc.

SA companies have a nasty habit of wanting to 'own' their staff. This is immoral.

Perhaps instead of yet another round of new laws, the employer should seek guidance in regards to the human rights of their employees.

[manhav]

Andy D, I agree with you in that regard. However, the discussion I started was aimed at laying a basis for the discussions to follow. I will be discussing some case law with specific reference of examples of what the courts regard as a breakdown of the trust relationship.

I am fully aware that the discussion will, at some time, revolve around the issue of restraint of trade, which is incorporated into most employment contracts. That is, however, quite another topic, which may keep us busy for a couple of days.

A company has no right to 'own' an employee - this is a violation of their human rights.

Posted by DesA

You are right in the sense that the employer does not own the employee. Slavery has been abolished years and years ago.

But, does the employee have the right to utilize the time and equipment of his employer to promote his second job or even his own part-time business?
Does the employee have the right to moonlight for a competitor of the employer? Does the employee have the right to divulge trade secrets and other confidential information of the employer in order to promote his second job and/or own business?

If one presupposes that the employee has these rights, then the employer and his business, which includes all the other employees, are at the mercy of the ambitious employee. If you assume that the ambitious employee is moonlighting for a competitor of the employer, then it is possible that the employer can, on the long run, suffer damages to such an extent that he has to close down business. This will have an impact on the other employees. What about their rights?

[sterne.law@gmail.com]

I think at this juncture lets divide moonlighting into 2 classes or time frames -
a) During working hours
b) After working hours (with the principal employer)

I think manhav post is related to b) where the employee does work after hours. As per desA one must question the moral issue and naturally there is a Constitutional issue as to if the employee may do other work. Competitors or similiar business aside, there really should be no limiting an employee, provided it does not affect the employers business. (refer later to best interests). Of course an issue that crops up, is the BCEA lays down conditions relating to down time or turn around time. ie the employee must have a continous 36 hour break once a week, 12 hours in between shift and the employee MUST take annual leave. These laws are for the health and the welfare of the employee. By doing an alternative job, the employee is now, in essence, violating these laws. hmmm...food for thought. This said, I agree taht the employee shoudl be free to do other work, provided taht the afore mentiond, conflicts and performance issues are met.

If the employee is doing it during working hours that is a seperate issue and far more in the employers favour.
However, in both instances, if the employee is using company property, then a charge of misuse of company property is available.
Another issue, such as trade secrets etc, would be that an employee is bound to always act in the best interest of the employer, this includes after hours. This often arises in lets say panel beaters - they work at a panel shop and also do work at home. Does the employee act in the best interest of the company by taking the business and not referring to the company? And with out doubt if the employee is using techniques or methodologies unique to the employer this strenghthens the employer position.

[desA]

To set the record straight:
To use the 1st employer's time, information, resources to operate other busniesses, is stealing. I do not condone this, in the least.

What is done, after hours, with own resources, should be up to the individual. If the alternative work does impact his/her efficacy in discharging his duties towards his 1st employer, then a conflict of interests may occur.

In other words, the moment the employee clocks out & leaves the 1st employer's premises, under own steam, then he/she becomes a free person to exercise their right to make a fair living. The 1st employer should have no rights over the person, unless these off-duty services are pre-agreed per contract, & importantly - paid for. The scales need to be balanced in terms of give-take. It cannot all be take on the part of the employer - this is a form of modern-day slavery.

[Dave A]

In other words, the moment the employee clocks out & leaves the 1st employer's premises, under own steam, then he/she becomes a free person to exercise their right to make a fair living.

Unless that work is in competition to the employer, surely. Can you possibly condone this if it's in the same line of work?

There is another aspect to this - the issue of disclosure. Should the employee be disclosing this other activity to the employer? If the employee is reluctant to do so, you have to wonder why.

[daveob]

How many times have you heard a contractor ( actually, an employee thereof ) say that he could do the job a bit cheaper later in the day / week / week-end if the client pays cash ?

He's moonlighting and using the employers name, transport, tools, and stealing the legitimate clientele of the company.

And even if it's in a completely different line of expertise that he's moonlighting, is it fair to the full time employer to get the half hearted attention and concentration of the worker 'cos he's so tired from the extra hours he puts into the other job ? It's definately going to affect performance.

[Dave A]

I'm looking forward to those precedents, Manie. Could you link to them as you put them up on your blog, just so we can read 'em nice and fresh

[desA]

Unless that work is in competition to the employer, surely. Can you possibly condone this if it's in the same line of work?

Of course. This would be a simple case of conflict of interests. It is also not ethical.

There is another aspect to this - the issue of disclosure. Should the employee be disclosing this other activity to the employer? If the employee is reluctant to do so, you have to wonder why.

What the person does in their own time, should have nothing to do with the 1st employer - unless they are prepared to compensate the person for 24 hours per day of fulltime employment. Of course conflict-of-interest situations should be ethically excluded.

South Africans are vey hung up about the employee ownership/slavery aspects. Running 2 & 3 jobs is common in other parts of the world, to make ends meet. The rules-of-conduct are understood by all. In most cases it is simply a non-issue.

For instance, Joe Blogs leaves work, heads off to the supplier to get some components for his after-hours job - fixing fridges. He then goes home & works on repairing a fridge for a local person in his area. He drops the fridge off on the way to his day job & arrives in time to provide another 8-9 hours day's service - as a design engineer. Cycle repeats. On the weekend, he travels into the countryside & paints landscapes. These are offered for sale 4 times per year.

Is this moonlighting?

[manhav]

Hi guys, sorry for not posting that case law yet. I have had 5 criminal trials in the past week, and next week I have 4 more trials. I will, however, as soon as possible post those court cases I referred.

[Yvonne]

How many times have you heard a contractor ( actually, an employee thereof ) say that he could do the job a bit cheaper later in the day / week / week-end if the client pays cash ?

He's moonlighting and using the employers name, transport, tools, and stealing the legitimate clientele of the company.

Surely an employer is entitled to fair expectation of the employee to not do anything that is to the detrement of his employer! even if it is not in the employment contract.

Just as a comment - I am constantly amased at how often people who to all intents and purposes appear to have fair moral values, will gladly take advantage of an offer of an contractors employee to do the work in their own time, to save them some cost. I have had frequent arguments with friends over this issue. It is stealing - plain and simple!

Surely this is a "trust" issue and the many options of actual situations should have a different outcome, and cannot all be covered by legal clauses.

This is precisely the sort of situation that must have a negative affect on the willingness to employ in small business, as it is impossible to cover every possible situation in an employment contract (If anyone has an employment contract of this sort - please, please let us have a copy - happy and willing to pay for it!)

Yvonne

[AndyD]

Just as a comment - I am constantly amased at how often people who to all intents and purposes appear to have fair moral values, will gladly take advantage of an offer of an contractors employee to do the work in their own time, to save them some cost. I have had frequent arguments with friends over this issue. It is stealing - plain and simple!
Yvonne

These would be the same people who will happily buy goods of dubious origin to save a few bucks but complain bitterly when their house gets burgled.

[sterne.law@gmail.com]

This is precisely the sort of situation that must have a negative affect on the willingness to employ in small business, as it is impossible to cover every possible situation in an employment contract (If anyone has an employment contract of this sort - please, please let us have a copy - happy and willing to pay for it!)

Yvonne

On the contract issue - The law allows for the fact that not every rule and or condition can be set down on paper. Thus many disputes are covered by past practice or common knowledge and then of course the common law. An excellent example of the common law principle is the need to act in good faith towards the employer and best interest. This would take care of the "actions that are detrimental to the employer." This in turn would mean that even where their is no written agreement on moon lighting, if the moonlighting is in some way detrimental to the employer, eg advising potential clients to come to me after hours to do the work for less, would not be in good faith and actionable.
Also many transgressions such as moonlighting are normally covered in most Code of Conduct Policies.

[tec0]

This is not so clear cut. Let me explain.

Firstly if an employer expects his / her employees to ONLY work for her / him then that must be stipulated in the contract. Secondly if the employer expects the employee to survive on a crappy salary then the courts love to take into consideration “what is and is not humanly possible and or acceptable”

If the person used his skill after hours to perform work then it is done so on his time. Did the employee use equipment or anything else from the company to do the work in question? Well that is left up to speculation.

It IS of note that most companies understand that times are hard and will allow workers to bring in some extra work for themselves. I can point to two companies that is actually very encouraging and support their workers in there undertakings.

When I was employed as a computer technician I did a lot of private work at night and when my boss found out I was dismissed. However those where early times and I was still new to the “work thing” I had no contract and my commission was not paid to me so I did what I had to do to keep the clothing on my back.

To this day I have the right to survive! I have the right to eat and I have a right to good health. Now if I am willing to work for it and my boss said to me sorry this is our policy and contract and the money is not much well then I will just keep my mouth shut and work after hours until I am dismissed because I have the right to live.

This is just my opinion on this post...