Dual Employment Dilemma: Can You Be Both an Employee and a Contractor for the Same Company?

Hi Everyone, I have a confusion about Dual Employment. Please help me.

Question on Dual Employment

For example, a person is working in a company as a permanent employee. Can he also do business in the same company as a manpower contractor?

Please answer me. If the answer is no, then why? If yes, how?

Regards

No organization would ever allow its employees to work for their vendors, customers, or suppliers. If any employee is found working as a freelancer, part-time, or has a share in their business, the organization terms it as illegal or dual employment, which in turn can lead to the termination of that employee on disciplinary grounds.

In your case, an employee can be terminated for outsourcing the company activities to his own company of which he is a member or owner. Legal action can also be taken against that employee, and his settlement can be withheld by the management.

As Ankit rightly pointed out, dual employment is unethical (as well as illegal if your firm has that in the HR policy). My recommendation on dual employment scenarios is specific—immediate termination.

Just to make sure that I understand you right—you are curious to know if 'X', who is an employee in your firm (any function or department), can provide your firm a service as a manpower consultant (even if X is not part of the HR or Recruiting team) and if this is termed as 'Dual Employment'?

If I have got your question correct, then my response is that this is dual employment since X is a full-time employee of your firm as well as a full-time employee of a business (as a proprietor, head, or associated in some capacity).

If you are X, then you are on a very shaky wicket.

I understand, but the thing is that the employee is conducting this manpower contract business with the knowledge of the company, and the company is also fine with this. My question is whether this is illegal. If the management is fine with this, can I proceed?

I know that there are certain big companies running satellite units in the names of their most confident employees. In fact, I had an occasion to handle a dispute of such a satellite unit regarding benefits to its employees on par with the employees of the parent unit. However, on verification of the documents, I found the incumbent to be a middle-management cadre employee, and there was no specific clause in the applicable service regulations barring such simultaneous extra engagement.

Interestingly, the individual argued that he was the real owner of the satellite unit, and the management of the parent company moved the High Court against taking cognizance of the dispute on the ground of misjoinder of party with an ulterior motive. Of course, it was an unethical practice or a benami transaction to circumvent labor laws.

Coming to your question, when it happens with the knowledge and concurrence of the management, how could it be termed as illegal?