Moonlighting debate reaches Parliament; govt looks for answers in Industrial Disputes Act, 1947

The long-standing debate around moonlighting has now reached the parliament. The Centre, speaking on the issue, clarified on Monday that a worker shall not take any type of work against the interest of the employer in addition to his or her job as per the legal framework. In a written reply to the Lok Sabha, Minister of State for Labour & Employment Rameshwar Teli said that legally a worker cannot take any type of work against the interest of the employer. He added that the government is not taking up any study on the issue.

The issue of moonlighting has taken India's much-vaunted IT sector by storm, splitting the industry due to divergent views of many sectoral leaders on the matter. Moonlighting is defined as a practice when a full-time employee of a company takes up an extra or a side job, usually without the employer’s knowledge, earning from both sources. Several companies, like TCS, Wipro, and Infosys, among others, have been debating about side gigs for the past several weeks. Many companies have reported that several employees have reportedly taken up moonlighting since the Covid-19 pandemic for several reasons.

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Teli, who was replying to MP Sumalatha Ambareesh, said: "As per the Industrial Employment (Standing Orders) Act 1946, a workman shall not at any time work against the interest of the 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.”

MP Ambareesh had raised the moonlighting issue in the lower house and asked whether the Centre considers moonlighting to be an efficient reason for firing employees.

Teli, in his reply, added: “Employment and retrenchment including lay-offs are a regular phenomenon in industrial establishments. No specific information is available to indicate that layoffs are happening due to moonlighting.”

He added that the government has not undertaken any study on moonlighting in the country.

When asked about whether the government has instructed companies not to fire employees as a result of moonlighting, Teli said that the jurisdiction in the matters with regard to multinational and Indian companies in the IT, social media, edtech firms, and related sectors lie with the respective state governments.

He added that the layoffs and retrenchment in industrial establishments are governed by the provisions of the Industrial Disputes Act, 1947, (ID Act), which also regulates various aspects of lay-off and conditions precedent to retrenchment of workmen.

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What is Industrial Disputes Act 1947? 

Under the ID Act, establishments with 100 or more employees are required to seek prior permission from the appropriate government before effecting closure, retrenchment, or lay-off.

The ID Act also provides for the right of workmen laid off and retrenched for compensation and it also contains the provision for the re-employment of retrenched workmen.

Based on their respective jurisdictions as demarcated in the ID Act, central and state governments take actions to address the issues of the workmen and protect their interests as per the provision of the Act.

The minister in his reply said that any retrenchment and lay-off are deemed to be illegal, which is not carried out as per the provisions of the ID Act.

(With PTI inputs)

Also read: After Wipro's Rishad Premji, now Infosys' Salil Parekh confirms firing employees for moonlighting