Dual Employment Dilemma: Can Early Joining Lead to Legal Trouble for Companies?

Respected Members,

Greetings of the day. Please advise regarding dual employment and its impact on the company from a legal perspective.

Dual Employment and Legal Implications

In detail: The employee's last working day is 15th Feb (Old company), but the employee joined the new company on 10th of Feb (New company), which is 5 days early.

Impact on the New Company

What is the impact on the new company if the old company becomes aware of the early joining? Is there a possibility of taking legal action against the new company?

Legal Actions Against the Employee

What type of legal action can be taken against the employee? Are there any provisions under labor law for such cases?

Restriction on Double Employment

If both companies are factories as per the Factories Act 1948, Section 60 imposes a restriction on double employment. The provision is extracted below:

60. Restriction on double employment. — No adult worker shall be required or allowed to work in any factory on any day on which he has already been working in any other factory, save in such circumstances as may be prescribed.

Additionally, if the employee is covered under the EPF Act 1952, the new employer will not be in a position to add the employee from day one of employment. In case the PF Inspector spots the anomaly, there will be a lot of questions to be answered.

I am also curious about the legal impact of dual employment as asked by the original poster. What are the potential legal consequences for the new company if the old company discovers the employee joined early? Additionally, what legal actions can be taken against the employee, and are there any specific provisions under labor law for such cases?

Legal Implications of Dual Employment

The old employer can complain to the Association of Industries regarding unhealthy practices by the new employer. If there is a breach of trust by the employee, such as retaining the earlier company hardware or utilizing the knowledge gained in the previous company against them, or any other serious misconduct, the previous employer can initiate criminal action against the employee and involve the new employer as an accomplice in this process. I have heard of some such cases.

Employment at Will and Dual Employment Concerns

Employment is always at will. If an employee wants to leave their present employer and join another, it is their freedom of choice. However, their voluntary exit should not violate the terms of the unilateral exit clause already covered by their contract of employment with the existing employer. Every ideal employee is expected to exercise their freedom without causing any inconvenience to their current employer by scrupulously observing the rules of exit. The employer should also be courteous enough to accept the offer of a buyout of the notice period in case of a reasonably urgent resignation. Unfortunately, most employers are not prepared to accept the buyout offer of an exiting employee and try to harass such employees in all possible ways to reduce the attrition rate.

Challenges with Ideal HR Practices

On the other hand, if the prospective recruiter/employer is a strict follower of ideal HR practices, they will give sufficient joining time commensurate with the length of the notice period of the existing job. Unfortunately, in employment matters, no one prefers to be ideal but tries to handle situations with expediency only. If we dispassionately analyze the actual cases of dual employment in a real-life scenario, we will find that in reality, there will be no dual employment but frequent job-hopping or ruthless poaching, giving rise to presumptive dual employment in the eyes of the law only. Under the above circumstances, terminating the services of the exiting employee on the charge of abscondence or initiating a civil suit against the prospective employer will not serve any purpose as all three parties try to act with their own hidden agendas.