Why Do Labour Laws Prohibit Dual Employment? Let's Explore the Real Reasons and Impacts

Understanding the Mysteries of Labour Laws

It is strange that there are certain mysteries surrounding Labour Laws that escape the attention of even seasoned HRM practitioners. It is a valid and fair assumption that a considerable amount of thought and deliberation goes into the making of any Act; every "section," "clause," and nuance is discussed, debated, and deliberated before it is passed by the Legislature. When it is notified, the Executive, who has the responsibility to implement it, frames Rules for its implementation. However, there can still be some gaps or grey areas, in which case such incidences are referred to the Judiciary, who interprets the Law.

This is how democracy functions. Laws are made, implemented, and any disputes are solved. While interpreting the Law, the Judiciary takes it upon itself to delve into the thinking and rationale of why any clause or provision has been put in by the Legislature, their motive, and the issues it addresses.

In light of the above, it is surprising that certain terms, contingencies, and provisions are interpreted by laymen and the general public to mean contrary or differently to what they may have been intended for.

The Case of "Dual Employment"

Let us consider the case of the term "Dual employment" as used by employees while seeking clarification on how their interest in another vocation or pastime shall be treated. One can understand the well-established cases of a government servant, say a police officer moonlighting as a paid hitman for a gangster company; a government doctor merrily taking money from patients as part of his flourishing "private" practice; or a government teacher taking private tuition from students in an effort to "pass" them!

However, when used in industrial or business settings in the private sector, what is the purpose of the government in banning dual employment? Does the government want workers and employees to earn less money and lead a miserable life? Does the government want an industrialist to not employ more talented people if a worker is capable of doing the work?

Purpose of Prohibiting "Dual Employment"

What is the purpose of having the prohibition of "dual employment" clause in the Mines Act, Factories Act, Shops and Establishment, or other such Acts? All these Acts are meant to regulate employment and provide for Safety, Working Conditions, and Welfare, etc., of employees and workers.

What happens if a worker has already completed his shift in one factory, and the employer sends him to another factory of his to work another shift? Of course, the employer will pay him for both shifts, but how long will the workmen survive if he does another shift? So is the case of a Miner who has worked his shifts in an underground mine; will he have enough energy left to work another shift in another mine of another company?

What about a salesman who has made a hectic round of selling the company's product in his territory and the owner asks him to do another shift in another office? Or is the clause meant to prevent a female salesgirl in a private company or shop from teaching Bharatnatyam to children of her locality during her spare time on payment of certain tuition fees?

A member has asked whether his investment in a friend's partnership business can be called "dual employment" by his employer and if he is liable to face the "consequences"?

I think knowing the purpose, background, and rationale behind any Act or its provisions will make us more proficient in interpreting the Laws, which is a very relevant skill for any HR professional. I invite more inputs on this from our members.

Dual Employment Challenges

In dual employment, one cannot do justice to the job. It will also be difficult for the individual working in two companies unless it is on a part-time basis. Although the Factories Act prevents double employment, some individuals engage in dual employment to support their overburdened livelihood, which is common in Spinning Mills. For example, one might work day shifts at one mill and do overtime at another nearby mill.

Regards,
D. Gurumurthy

Firstly, in my opinion, a person who is doing a dual job is snatching the livelihood of another person and causing, to some extent, unemployment. He is also not taking care of his family, children's affairs, as well as his health.

24 hours of the day are divided into three phases of 8 hours: 8 hours working, 8 hours for day-to-day activities, and 8 hours of rest to regain energy used in working and daily activities. Since the legislature takes care of the life and health of its citizens, dual employment is prohibited in most Acts.

Yes, money is everything in life, yet we cannot devote our whole life just to earn.

Regards,
V K Gupta

This is a law; it's made by people like us only. But the most appreciated thing is that Mr. Raj Kumar has probably pointed this out in the context of employment and economic situations prevailing today in the industry. However, Mr. Vk Gupta has answered the fact. Nevertheless, I feel that one is ever free to do the work as much as he/she wants. It (This Law) is a social welfare measure to help and support society at large so that shrewd and selfish business owners/employers should not take undue advantages of employees.

Workers/employees who want more earnings will always be ready to work for more hours at one or more places, but lawmakers know that if such laws are not imposed, things may worsen the socio-economic balance, and more exploitation of manpower will be there. I value employees as human beings, and hence they need to be educated to understand the very purpose of the law and respect it.

Thanks, Bijay

I appreciate your comments. You have truly understood my sentiments behind this thread and pointed this out in the context of employment and economic situations prevailing today in the industry. Also, you have correctly understood the spirit behind imposing this restriction by law. It is not, as some would probably think, to prevent workers from earning more, but to safeguard their health, especially in mines and factories, where physical work is involved, and the working conditions are very tough.

I look forward to more suggestions and comments.

Warm regards.

I have been away from India and worked in the UK for nearly 40 years. Hence, I am not conversant with the law now. In the days I worked in Bangalore in the 1960s, I worked full-time (8 till 4 from Monday to Friday and 8 till 12 noon on Saturdays) in a defense establishment. The organization started evening classes for their staff, and I volunteered to teach (I was paid for that) and taught two nights a week. I was single, and it did not affect my family life.

In the UK, while working full-time, many of us enrolled in part-time evening courses to change our lines/improve employment prospects. That's with a young family. If that is allowed, I wonder whether the law about dual employment is about improving family life. I also did part-time teaching to get a lead into the teaching profession, as well as to try out whether it's a line which I would like to pursue on a full-time basis. However, people working in two different organizations like that had to take permission from the parent organization to ensure that there was no conflict of interest.

I know of a person in the USA who had started a firm with a friend before taking up employment. He told the would-be employer about that, and the employer said it's okay, as long as he was a sleeping partner and not an active one.

In many American-owned firms, the world over, staff work all sorts of hours, and I wonder whether there is any law that prevents them from being overworked!!

This is one of my favorite threads! In the age of Google, where firms allow 20% of their productive time to explore, dual employment has a new meaning. Drawing a line to avoid misuse of skills for which one is employed is essential. Would want to see where do we conclude this?

My gratitude to everyone who is joining this discussion with their experience and practices.

I am extremely thrilled with the inputs from Mr. Simhan and Ms. (Cite Contribution)! Mr. Simhan has been kind enough to provide his own experiences along with his views. As rightly pointed out by Ms. (Cite Contribution), the world has changed a lot and continues to.

It would be very unfair to restrain someone's talent and potential to the confines of a single employment, especially considering the economic scenario where the income of even working couples is not sufficient to take care of their present and future requirements and financial safety.

For the HR fraternity, it is not enough to accept and implement the status quo. Those who have spent a considerable part of their life dealing with such issues must have become aware of every aspect of the Labour Laws, many of which date back to the 19th century and many got their present shape during the post-World War era. While one cannot dispute the philosophy of labour welfare, which was foremost in the conscience of the lawmakers, it cannot be under-emphasized.

Post-independence, in a socialist economy, the presence of the government represented by the public sector was seen in every sort of economic activity, whether it was a bank, airlines, telecommunications, power sector, even in specialized trading by organizations like STC, MMTC, manufacture of consumer electronics, and two-wheelers to other items of public consumption except commodities.

The growing presence of a fledgling private sector brought out many more employment opportunities, wherein the employers enjoyed the benefits of stripping the employees of their privileges which were assured in a government sector, except those that were strictly applicable by the Law; such as the employment privileges enjoyed by the Workers under such acts as the Factories Acts, Mines Act, Industrial Disputes Act, EPF Act, ESI Act, etc.

While stripping the employees of their privileges which were restricted by Law to a certain class of employees, it has been observed that those rules and laws that were to the disadvantage of the employees were carried over intact, even to those employees who were not entitled to any privileges.

For example, the employer emphasized his right to hire and fire managers, and in some cases, without providing them the notice pay, in case they resign, arguing that the notice of resignation itself is sufficient to fire the employee without giving him any notice pay; in a way implying that only when the employer fires an employee, he is entitled to notice pay.

With the advent of Liberalization and entry of companies from western and developed countries, all their employment practices were adopted which favored the employers; whereas any policy or practice that apparently favored the employees was discarded with impunity.

Examples of some of such casualties were the fair treatment of employees without any prejudice to their sex, age, race, disabilities, etc.; the personal freedom and independence enjoyed by the employees, etc.

Not to mention, the WORK CULTURE of these countries, which values work, and where a housekeeper, janitor, or a babysitter commands more respect than even the MANAGERS in blue-chip Indian companies!

Another point, quite often overlooked by those who subscribe to the culture of Hire-and-Fire, is the economic realities of these countries where even the IMMIGRANTS get dole from the government for a living (which is much better than even the best salaries given to certain employees by Indian companies), the low rate of Unemployment in these countries, the Unemployment allowances or Social Security provided to its citizens; the free Medical facilities and assistance provided by the government during exigencies; are often ignored or not known by many.

So when we accept the liberal interpretations when it comes to those favoring the employers, we should also take note of THOSE FAVORING THE EMPLOYEES!

I would like to quote from Mr. Simhan's post:

"However, people working in two different organizations like that had to take permission from the parent organization to ensure that there was no conflict of interest.

I know of a person in the USA, who had started a firm with a friend before taking up employment. He told the would-be employer about that and the employer said it's ok, as long as he was a sleeping partner and not an active one.

In many American-owned firms, the world over, staff work all sorts of hours and I wonder whether there is any law that prevents them from being overworked!"

In America, as in other developed nations, having two employment streams is neither banned, nor any stigma is attached to it.

In fact, the amusing term "MOONLIGHTING" is used for such activities. So an under-worked young lawyer may moonlight as a cab-driver or work in a fast-food joint if he wants to pay the installments for his new car or house.

Taking into consideration what Ms. has written on this:

"In the age of Google, where firms allow 20% of their productive time to explore, Dual Employment has a new meaning.

Drawing a line to avoid misuse of skills for which one is employed is essential."

The term "dual employment" needs to be questioned and discussed threadbare.

If dual employment means doing the same job, having the same profile of work; in another organization, most likely a competitor or obviously in the same industry; then it's a strict No-No.

The same goes for a worker in a factory or mines - it would be killing.

However, what about a job which is in an entirely different area, which is of casual nature and helps the employee in providing relief, de-stressing, or enhancing his abilities and well-being.

A software professional may find much relief and fulfillment if he is a part-time paid faculty in a computer institute; or maintain his physical fitness as a part-time instructor in a gym or karate school.

Similarly, if a manager wishes to utilize his managerial skills in a private venture with a friend or family, that does not take up his official time and there is no conflict of interest; why should he be debarred from giving the benefit of his business acumen to his family.

I think the only considerations that should go into prohibiting the so-called "double-employment" should be:

- The other employment should not be full-time (comprising of 8 hours or a shift) or a regular job.
- It should not conflict with the working hours or performance of the employee.
- There should not be a conflict of interest, and it should not be with any agency that has any dealing with the company.
- An employee should disclose such information to the company.

There should not be any compulsion to take permission, as it would only unnecessarily work and give the company undue influence over the employees. However, there is no harm in giving information to the company, as such disclosure and transparency will help the company in supplementing its competency pool to benefit in contingencies or starting a new venture.

Warm regards.

As VK Gupta mentioned, the logic and reasoning behind the laws related to dual employment focus on a combination of economic, social, and health aspects of the employee—very valid ones then and also now. However, I think that the gamut of reasons has only increased in this age of the Internet, knowledge, and frequent/regular technological advancements.

Earlier, many, and maybe even most, employment opportunities were of using the 'Brawn' but today more and more fields include the use of the 'Brain' much more than the brawn—including those fields that were essentially lacking in any great technical upgrades regularly. A couple of fields come to my mind right away—Civil Engineering, Automotive, and many more—that hardly had any regular technological advancements in earlier days [typically the timeframe mentioned by Simhan], which was unlike other engineering branches like Electrical, Electronics, etc.

The Changing Face of Civil Engineering

The face of Civil Engineering has changed in the past couple of decades so much that there are so many specializations within the super-set of Civil Engineering—with software being a regular part of every specialization.

Dual Employment and Conflict of Interest

One very strong possibility is 'Conflict of Interest' that will be quite tough to track, let alone prove. The second aspect would be adhering—in both practice and spirit—by the employees to the various Non-Disclosure and similar clauses in today's offer letters—by themselves very valid and necessary parts where 'knowledge' forms a very important part of most employees' job roles and responsibilities.

I am not sure what (Cite Contribution) mentioned "...where the firm allows 20% of their productive time to explore..." is related to dual employment. 'Exploring' is a different ball-game when applied to the private sector, which to the extent I understand, is to inculcate and encourage the exploration-temper in the employee—THAT BENEFITS THE ORGANIZATION... this being the key.

Exploration in Defense vs. Private Sector

But in fact, Defense Organizations have had this practice for decades [Simhan would corroborate for it I guess]—with quite a large chunk of time, as a part of the regular work, going towards areas that have NO IMMEDIATE application/value. But NOT many private sector companies are OK with an employee exploring a totally unrelated area... though there surely are some companies that do so... since at the end of the day, it boils down to economics from the Company's perspective.

Potential for Dual Employment in Unrelated Areas

But this aspect COULD lead to another angle to the application and practice of dual employment in the present-day environment. Maybe it's not such a bad idea of allowing dual employment in unrelated areas... unrelated vis-a-vis the company's operational domains/areas... based on the individual's interest? However, that would need a lot of tweaking the existing laws to ensure there's no misuse of such provisions.

Regards,

TS

I appreciate TS's views, which offer a different perspective. According to him, the emphasis has shifted from "brawn" to "brain." In my opinion, the former is why lawmakers made the provision of not allowing "dual employment." Since this is no longer true in the absolute sense, with many professions and their development—which he acknowledges—this reason should not be an impediment.

However, he goes on to give a counter-argument:

"How does this mix with Dual-Employment? One very strong possibility is 'Conflict of Interest' that will be quite tough to track, let alone prove. The second aspect would be adhering—in both practice and spirit—by the employees to the various Non-Disclosure and similar clauses in today's offer letters—by themselves very valid and necessary parts where 'knowledge' forms a very important part of most employees' job roles and responsibilities."

Attribution: https://www.citehr.com/487134-why-du...#ixzz2w3dCBmk9

However, there is another angle: that of "Dual-employment in unrelated areas"!

"But NOT many private sector companies are OK with an employee exploring a totally unrelated area... though there surely are some companies that do so..."

"But this aspect COULD lead to another angle to the application and practice of Dual-Employment in the present-day environment. Maybe it's not such a bad idea of allowing Dual-employment in unrelated areas... unrelated vis-a-vis the company's operational domains/areas... based on the individual's interest?"

Attribution: https://www.citehr.com/487134-why-du...#ixzz2w3fMSxFa

In fact, as a beginning in this direction, we as HRs can explore "Dual-employment in unrelated areas."

As Mr. Simhan has rightly observed:

"In higher educational establishments, higher-level staff are encouraged to take up consultancy work. Universities and colleges in the UK take a part of the money earned."

Attribution: https://www.citehr.com/487134-why-du...#ixzz2w3gU1LDP

I know this for a fact, as it is a widely prevalent practice in the IIMs and IITs. What is more, this is in a RELATED AREA. So, what is the payoff for the employer, in this case, IIMs, IITs, and Universities? Apart from the pecuniary benefits, it gives prominence to the Institute, enables their faculties to keep themselves up-to-date, indulge and contribute to the state-of-the-art status of their chosen profession. Needless to add, it gives the 'employees' an outlet for their creative energies and gains excellence besides some financial gains.

It is a Win-Win scenario for both. So, whether it is a related area or entirely unrelated, the issue needs some fresh thinking and deliberation. Especially, in the case of the latter, unrelated area, there seems to be absolutely no problem except a change in the mindset.

In fact, it can be a retention tool—the freedom to choose and pursue any unrelated vocation during their spare time! It might help in building employee motivation and make for more employee engagement, as well as making the organization (appear, if not really make), more employee-friendly.

As has been done in accepting new policies and work culture coming from the West, although at the behest of the employers, which favors the employer; it is time we shed our inhibitions and rigidity in respect of policies that would favor the employees. This can be a good start in shaping the workplace of the future.

Warm regards.

Laws govern the systems of work and working procedures with a specific purpose. In corporate settings, these laws provide social security. However, they never restrict anybody's growth and development. Considering the overall vision of legislation, I do not find any problems. Amendments in laws also change the course of law as per present needs. In terms of dual employment, "Yes, I agree people can do this, but the question is everyone has limitations as well as certain obligations that need to be addressed in a proper fashion, order, and within legal boundaries.

Today, talent acquisition and retaining talent have become great challenges for companies. Companies invest immense efforts and significant amounts in training and sustaining such talents, expecting their employees to dedicate all their talent and energy to them. Thus, a person opting for dual employment even in an unrelated domain may perform poorly due to low energy levels or overworking in another place.

In summary, talented individuals can earn enough by dedicating just a few hours, while low performers may consider options like dual employment. Ultimately, we are all humans, and laws are not our gods or bosses. You can work as much as you want, but your skill and talent will determine how much time you need to work for earning.

Thank you.

Thank you once again for your inputs. The problem is exactly what you have stated in your last paragraph:

"At the end of the day, we are all humans and laws are not our God or boss. You do work as much as you want, but your skill and talent will decide how much time you have to work for earning." (Attribution: https://www.citehr.com/487134-why-du...#ixzz2w3xfYTw7)

It's not just your "skill and talent" that decide how much time you have to work. In certain cases, the law rightly decides how much one should work. In other cases where there is no legal compulsion, the organization decides this issue. Although earning is important, it is not just a question of earning alone.

Warm regards.

It is great to see such a brainstorming thread on the subject of Prohibition of Dual Employment. We are seeing many high-level people (Directors) and their advisors engaged in multiple companies. For them, as well as for those in service industries (such as Medical and Teaching), the work may not exhaust their energy as they are not engaged in laborious tasks. However, individuals involved in strenuous activities like construction workers, factory workers, and miners can get exhausted within an 8-hour shift and require rest. If they immediately engage in another company, it will obviously affect their health. The Prohibition of Dual Employment is in place to safeguard their health. If any workplace deaths occur due to sleeplessness or tiredness from excessive work hours, it will have a significant impact on both the workforce and the industry.

It's indeed a great feeling to be back on CiteHR again. Plus, after logging in, I found this thread at the top... Awesome! Valuable inputs by all. Enjoyed going through them.

As far as my experience and thoughts are concerned, I would love to add that when the Law for Dual Employment was initially made, the situation was diverse, and experienced functionaries might have faced the cons of Dual Employment. But now, yes, the economic condition, working environment, and patterns have changed, so definitely, amendments should be made. The points suggested by Raj Kumar Hansdah Sir are practical.

Thanks, Vijeta