Moonlighting Dilemma: Can Full-Time Employees Legally Work as Consultants Elsewhere?

One of the employees working with my firm is also working sometimes for another organization as a consultant. Is any full-time employee permitted to work as a consultant anywhere else?

Hi, a person should not be on the payrolls of two different companies at the same time. However, they can earn money through part-time jobs or work as a consultant. This is my view. People, please correct me if I am wrong.

It purely depends on the policy regulations that the present employer has in practice. Many companies don't allow their employees to work for any other company part-time, as consultants, advisors, etc.

Thank you.

First of all, please let me know if there is any existing alternative work policy in your organization. From my understanding, this policy varies from one company to another. Some sectors, like the IT industry, allow for consultant work. Could you provide me with information about the nature of your company and industry?

Regards

Difference Between Full-Time Employment and Consultancy

There is a difference between full-time employment on one hand and consultancy or similar assignments on the other hand.

Even in government and public sectors (where such rules are most stringent), there is no bar on "consultancy" work unless otherwise specified or prohibited. For example, doctors who receive Non-Practising Allowances (NPA) are prohibited from doing any private consultations. Similarly, government teachers are barred from taking private tuitions.

I have myself invited senior government officials, such as secretaries and senior professors/HODs of government institutions, to deliver talks, lectures, workshops, and training sessions. These are done on an honorarium basis, with travel and stay arrangements being provided by the company.

Hope this clears the doubt on this matter.

Warm regards.

Generally, the terms and conditions of an appointment order describe that an employee should dedicate their time entirely to the betterment of the organization where they are employed. They cannot, by any stretch of the imagination, devote their time to other organizations. This is usually done to prevent the leaking of organizational secrets and to ensure total devotion to the employer.

However, they can dedicate their leisure time during holidays to offer their services to NGOs purely for social service.

Permission Required for Dual Employment

Definitely not unless and until the current employer has given permission. If any employee is found to be working with another organization as a part-time employee, consultant, etc., the current employer can take action against such an employee.

Thank you.

There are multiple ways of looking at it. True, you cannot normally take up additional employment as most employers will contractually forbid you from doing so. Even so, in your free time, you might do some work that is not related to the work you do at your company or the business of your company, as a hobby that could give you remuneration. For instance, if you play the guitar at a concert and earn a few bucks while working as a software engineer, it cannot be normally treated as additional employment. Hence, the answer is more on a case-to-case basis.

Some Pun: Unless you are sure, never ask your current employer...  He might think you are not adequately loaded and change your workday from a 12-hour workday to a 14-hour workday. 

Dual Employment and Breach of Contract

Dual employment without prior information or permission (in writing) to both organizations concerned would amount to a breach of the employment contract. If one is employed by two organizations simultaneously without informing the concerned parties, it constitutes concealing vital information, which may be considered fraud and could lead to action under the respective service conditions of both organizations, as well as under general laws like the Contract Act and the Indian Penal Code.

Employment vs. Honorary Assignments

It is important to differentiate between the terms "employment" and "honorary assignments." Providing free services or receiving honorary payments or reimbursements does not constitute employment.

Regards,

I am quite a bit confused. Most people say there are legal bindings, okay, fine. What can we do? We can terminate the employee. Nothing else. But that is not the solution. As HR professionals, we are here for the benefits of both employees and employers. If this employee gives his 100% during his term of employment and maintains the organization's legal perspectives intact, then if he works as a consultant, where is the problem? We have to understand his needs and feelings. If it is going in the wrong way, then we have the option of termination as per our legal perspectives.

Thanks and Regards,
Dipak Kumar Saha

No, provided you have an explicit policy prohibiting people from taking part-time jobs. If it is not conflicting with your business, usually companies don't bother. You need to make a call on what his business/job is outside your office hours, then take action.

Regards,
Vijay
HR Advisor

One of the employees working with my firm also works sometimes for other organizations as a consultant. Is any full-time employee permitted to work as a consultant anywhere else?

In my opinion, it all depends on whether, while performing the job elsewhere, there is a conflict of interest. One has to be careful about releasing confidential information, directly or indirectly, to potentially competitive firms. There must be a policy concerning outside business activities where none exists. Otherwise, it is also a question of ethical behavior.

I hope this helps.

Regards, Eddy

Can an Employee Work as a Consultant Anywhere Else

In my opinion, a full-time employee cannot work as a consultant anywhere else. If they do so, they are not being fair to their employer. However, for a part-time employee, there are no restrictions.

If a full-time employee is found working with another organization, they can be charged and dismissed from service on the grounds of unprofessional ethics.

Regards,
RL Dhingra, Advocate Labor Law Consultant [Phone Number Removed For Privacy Reasons]

Though most organizations do not allow nor encourage dual employment, there are a few that have policies allowing such practice. In one of the organizations where I have worked before, they did have a provision for dual employment, subject to approval from the department head and the HR.

They review the second job profile and evaluate if that role would have any negative impact on the employee's current position. If everything checks out, they approve the second employment. However, I don't think there is any law that prevents a person from working in a private firm and taking up a second job, whether as a consultant or a full-timer. If the individual is employed by a government organization, the law strictly prohibits a second job.

In the case of government-funded organizations, depending on the nature of the entity, there may be provisions allowed.

Regards,
John P Vijay
Managing Director
WULFGARDS LEARNING CENTER

The issue cannot be generalized as this depends upon the language of the appointment letter specifying the terms and conditions of the work and the service. It is wrong to contend that government officials, even at the level of secretaries, are allowed to work as consultants and receive paid honorarium. A government servant is a 24-hour employee and cannot accept any other type of employment whatsoever. Attending seminars, workshops, or giving lectures is not considered employment; these activities classify individuals as guest faculties who are experts and authorities on the subject. If the standing orders do not provide or the terms of employment do not in any way restrict part-time employment, it may be deemed permissible. It is observed that certain employees, possessing expertise due to their extensive experience, provide part-time consultancy unofficially.

 Wish it were possible. Yes, I do agree that if a person is employed on the rolls of the company, then they are bound to work for that company only. But what if they are working in a company and also working as a consultant from their residence, but not related to any company? This means that the work is being outsourced, and they work as a consultant.

I am assuming your company's recruitment policy includes a provision of "Non-Compete." If the same is not breached, it should be okay. In other words, he or she cannot be consulting for a similar-natured business.

There are companies that cover all companies (either competing or not) under their non-compete provision. If so, then working anywhere else under any arrangement is not permissible.

Thanks

Unless he/she is a government servant, he/she can do so, as long as he/she is not violating the corporate culture and terms of the offer.

Normally, part-time consultancy is not barred under any law. However, ethically, one should not engage in consultancy in the same field in which they are performing their duties within the organization they work for, or in the line of business of that organization.

Even government officers, including secretaries, when invited to take on an assignment, seek permission from the government to participate. Without permission, they are not allowed to undertake such assignments. I have experience working with the government, and this is a reality.

Consulting While Employed: Ethical and Legal Considerations

The employment letter or contract will determine whether or not the employee can be associated with another organization. Consulting while in employment may bring a conflict of interest. While legally okay (provided the fees received are subject to TDS and are duly included as earnings), it may not be ethically correct.

Most organizations have no objection to employees being associated with educational or professional bodies gratis or for a nominal stipend, as this amounts to "reaching out" on behalf of the organization. Part-time or contractual employees would be able to consult freely, provided their contracts are worded as such.

It is best to be clear and inform the concerned authorities in the organization before accepting any consulting assignment (whether paid or not) to ensure that the commitment to the employer is not infringed upon in terms of time, resources, and patented information.

If the consultancy work doesn't hamper the official time and work in the organization, I suppose it should not be a problem. The work should be different and should not be competing with the existing organizational work. Only then can an individual have another source of income in the form of consulting, freelancing, etc.

Regards

My dear friend Tikam, this was in connection with matters related to the propagation and proper implementation of the government's policy (and not any contractual work pertaining to the private sector). We had invited a senior Secretary-level official of a Central Ministry to help as a faculty member in a workshop to implement one of the government's policies. I am certain that the senior official must have taken due permission, as the program/event was widely reported in newspapers and other media.

Kindly have an open mind about situations and new information. Please do not subscribe to the NIH (Not Invented Here) syndrome; i.e., if anything does not happen in one's organization or if one has no idea or information, it DOES NOT MEAN that it does not happen.

Warm regards.

I agree with the clarification given above by Satish Kumar Bhargava. The "consultant" needs to be defined/explained properly in the query itself so that members can give appropriate responses specific to the matter under discussion. I request hhurmade, who started this discussion, to cite the instance with more information such as the nature of the organization, details about the employee, and the kind of "consultancy" work he is rendering outside. Merely mentioning 'as a consultant' does not clarify the matter and sends members on the 'wrong trail'.

Warm regards.

Request for Permission to Allow Employees to Work for Another Company

I am writing to seek permission for our employees to work for another company for a specific purpose. We believe that this opportunity will not only benefit our employees personally but also enhance their skills and knowledge, which can be valuable for our organization in the long run.

We assure you that this request is made with careful consideration of our business needs and with the intention of fostering a positive working relationship with your company.

We kindly request your approval for this arrangement and would appreciate any guidelines or conditions you may have regarding our employees' engagement with the other company.

Thank you for considering our request. We look forward to your favorable response.

Warm regards,
[Your Position]
[Your Contact Information]

Please tell me how to write a letter to request permission to allow our employees to work for another company for a specific purpose.