Ukmitra
Business Development, Employee Relations,
Adv. Manoj Liyonzon
Advocate, Chennai
Cite Contribution
Community Manager
Raj Kumar Hansdah
Shrm, Od, Hrd, Pms
Sushilkluthra@gmail.com
Consultant In Legal Matters
+3 Others

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Hi, I am employed in a big organisation and also I have a partnership business. The business is registered with 4 partners and I am one of the sleeping partner. I do not have any role or responsibility in the business. Its just kind of an investment i did for some extra earning. Can my current employer take it as a dual employment and sue me for that? Is dual employment is only valid if I am hired with two different employer or business can also be considered as dual employment? And what are the consequences I may have to bear? Can my employer take any legal action against me?
Killersaves,

It is entirely on your employer as to how your engagement with another firm as a partner, though a mere sleeping one, is treated. There are certain clauses in most of the laws that direct towards avoidance of dual employment.

1. Factories Act Section 60 pronounces Restriction on dual employment

Even regard to establishments which are not coming under the definition of factories act, some the provisions mentioned here-under would help for preventing double employment:

a. The Bombay Shops & Establishments Act, 1961.

Sec 65: Restriction of double employment on a holiday or during leave

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

Similar provision should be there in the respective states shops and establishment act.

b. Industrial Employment (standing Orders) Act,1946

In terms of model standing orders number 8 under schedule IA of central rules “ A workman shall not at any time work against the interest of 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.

Even if everything mention above is negated, every employer draft text of employment contracts and if required bring interpretations to suit them, to deter the employee from any gainful activity and activities that shall consume his/her time attention i.e an employee not covered under the Shops & Establishment Act and the Industrial Dispute Act is governed by the Contract of Service, which, in most cases, is the Appointment Letter.

So, I would suggest not traversing that path. However, my learned friends would be able to correct me and throw more light on the very matter discussed by you.

Greetings,
You have already received a clear view on how the legalities work. I echo Sajal ! Please understand your employer's definition for Dual Employment.
Holding two offices for profit accounts for dual employment, when you are using the same skills and competencies.
Let us assume a situation where you are employed as a Software Engineer and you are running your tutorials for Indian Classical music or Dance. This may not account for Dual employment as the areas of work as essentially different, even if both are 'for profit'.
Did you received an Appointment letter mentioning the Terms and Conditions for 'Employment at will' ?
You need to check the Code of Conduct within your firm and that would set your boundaries right.

Hi,
According to me there is no harm in investing in business as partner and more so as "Sleeping Partner", wherein you are not involved in day to day administration of the business, which would have otherwise effected your current employment. So, relax. Yes, ofcourse, to be on safer side, its always best to disclose the same to employer if there is a slight clash of business interest besides its always better to be be more transparent with your company. Company cannot file a dual employment breach just becoz you are a Partner in "x" firm, provided they have enough evidence that "Your business interest in other firms" is/are effecting their business etc and you are a potential threat who would leak their business secrets.
Ukmitra

I agree with Ukmitra. While you may only be an ianctive partner or investor and the firm maybe doing business which is in no way related to your current job or the industry you are working in, you may want to disclose it to your employer to be on the safer side.
I know of an instance where a lady was working in a corporate and wantex to do modeling assignments. She had to disclose it to the employer and also sign a document that she would not model for a competitor or do anything that may tarnish the image of the company. Since some modeling assignments can be looked down upon.

Dear friend
I have taken up this matter on a separate thread.
Apart from commenting here, you can also give your opinion, on this thread :
https://www.citehr.com/487134-why-du...ml#post2133136
Warm regards.

- Dual employement is contrary to law & your organisation Code of Conduct & HR Regulation.
- A sleeping partner can be hired as an employee by an employer only upon its discretion.
- An employee if proceeds to become a sleeping partner, should get prior approval from employer. Else it
is illegal (Only if it is inheritance busines or even if new).
conteary to all these subjected to offence. COmpany can sue you

In addition to Sajal's complete and comprehensive legal position, please check your appointment letter. You are most likely to find an omnibus clause that reads something like this..".... prohibited from taking any gainful activity while in our employment."
And, whether you are or are not receiving any profit from the business in which you are a sleeping partner, it will be treated as "Gainful activity" as there is always an expectation of profit from any business.
I can think of two options. First one is honest course of action: Retain only one activity; either the job or business. Second option: A legal workaround is to transfer the business interest to a family member.
Cheers,
Ganesh

I appreciate the insightful comments, without tending to cast any aspersion on the motives of a fellow-HR. It is interesting to read these comments; esp:

" whether you are or are not receiving any profit from the business in which you are a sleeping partner, it will be treated as "Gainful activity" as there is always an expectation of profit from any business."

It appears to be like the "long arms"of the Law; in this case the company's influence represented by the HR. It does not matter that one needs to PROVE the indulgence in gainful activity in terms of time or effort; or whether there is any actual gain.

Writing books, which go on to become best-sellers, can also be termed a gainful activity. Yet it is astounding to find that many well-known authors are in employment and have written their books during their tenure with companies.

In any case, it seems that some companies are more bothered about any activity wherein the person can expect a gain; rather than focussing on activities which might be detrimental to the interest of the company or where there is a conflict of interest.

More power to such companies and their HRs !!

They have a whip to beat any employee with, and this gives them "power"or feeling of power.

It is no mystery now why in some organizations, HR continues to be the least liked department.

Warm regards.


Four points Mr. Raj Kumar,

1. I am not from HR which you say is the "least liked' department in some companies. I am a retired general management and marketing person and presently a freelance consultant. I don't know how much these roles are "liked." Hope you will take this in a lighter vein.

2. My intention was a simple one; to protect killersaves (the member who asked the original query) from facing any difficulty from her/his employer and to help in both legal as well as safe way to deal with the situation.

3. Regarding dual employment per se, there can be lengthy debates that bat for both sides: the employers as well as the employees.

Conflict of interest is subjective, depends upon merits of each case and raises many questions like teachers giving private tuition, the now legalised private practice by government doctors, employees running chits and loan business on the shopfloor. How a freelancer like me can be effective while managing work for different principals? Are not employers themselves running many businesses? Is it safe to permit a night-shift driver to undertake some other daytime job? The questions are endless.

The fourth point is this; How many employees can manage dual employment with equal dedication? May be some of the authors who write books may have the maturity and dedication to do justification to both occupations.

Warm regards,

Ganesh


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