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Cheating, Right Or A Harmless Idea: Why Moonlighting Has Wreaked Havoc In The IT Industry

A permissible practice in the UK and the US, moonlighting has not found many takers in India yet. But is India’s IT industry even fit for the concept?

Cheating, Right Or A Harmless Idea: Why Moonlighting Has Wreaked Havoc In The IT Industry
Vinay Dominic, Outlook Business
POSTED ON October 07, 2022 5:51 PM

When Swiggy announced its moonlighting policy in August this year, it possibly did not know the heated debate that it would ignite. Since the launch of the policy, an industry first in India, companies are divided over whether moonlighting—where employees can take up gigs or projects outside of their regular employment at the company during the hours away from work—should be allowed.

Wipro firing 300 employees over them working for its competitors while being on the company’s payroll only added more fuel to the fire. But it was Wipro’s executive chairman Rishad Premji’s stand on moonlighting that made it a national debate. 

Expressing his disagreement, Premji tweeted: “There is a lot of chatter about people moonlighting in the tech industry. This is cheating - plain and simple." On a separate occasion, he had also said that it is a complete violation of integrity in its deepest form. 

While the industry leaders’ views about the policy are seemingly varied, what really needs to be understood is its long-term impact on the overall ethics and culture of companies and whether the concept itself is relevant in India today.

Why Employees Moonlight

People often take up more than one job when they are in different cycles of life and career. They might want to supplement income, make career shifts, try entrepreneurship, etc., which should allow for people to work away or in addition to their current jobs. 

Kaustav Dey, senior analyst at Gartner, gives the example of Europe where multiple employment is legal. “You have no obligation with an employer beyond 40 hours contractually, people can work in multiple places, most of the time, by informing their employer even though it is not mandatory,” he says. Currently, the US has the highest number of people on double full-time jobs, amounting to 70 hours of work, adds the London-based analyst.

The two basic assumptions that allow for single employment are: when salary is enough for the employee to not look for a second job and when an employee's current line of work is such that it does not allow him/her to make big shifts. Both are often not true because most start-ups are moonlighting and expanding beyond normal jobs.

Often, money is not the key factor. “I believe the key driver of this trend is not money but satisfaction and feeling that my skills are valued and of use to someone. The high you get when you feel wanted and respected is the key driver as employees do not see that happening inside the organisation,” says Vineet Nayar, founder and chairman of Sampark Foundation and former vice chairman and CEO of HCL Technologies.

While there is no overarching law that prohibits moonlighting in India, a person in jobs of a similar nature may spark confidentiality issues

The challenge, however, comes from the situation when there is conflict of interest. While there is no overarching law that prohibits moonlighting in India, a person in jobs of a similar nature may spark confidentiality issues. 

“Like, someone working for a banking software and working for a bank. That is dangerous and should be restricted. But, in the absence of a clear policy or guideline, people will hide it,” says Dey.  

The Debate

For employees, particularly contractual ones, it is a good opportunity to earn more money and utilise time after their regular working hours. For companies, keeping more contractual workers means less cost in terms of salaries, perks and other incentives. 

Union Minister of State for IT and Electronics Rajeev Chandrasekhar believes that it is about a change in the entire model. In a recent media event, he came out positively on moonlighting and said, “Moonlighting represents two very significant phenomena. One, the entrepreneurial bug that has bitten every techie. Two, the talent deficit or demand for talent. For a company to forbid a young engineer from dabbling in a start-up…they (companies) do not understand the change in model.”

Covid-induced work-from-home models gave rise to people taking up parallel gigs to earn extra income and the practice has caught the fancy of a large chunk of the IT workforce. Having said that, most traditional IT companies still prohibit external work on commercial terms. 

A July Kotak Institutional Equities survey of 400 people across the IT and ITeS industry revealed that 65 per cent knew of people pursuing part-time opportunities or moonlighting while working from home. Not allowing work from home is also a reason for people to take up moonlighting. 42 per cent participants in the survey said they would consider changing their job if work from home was disallowed.

Vineet Nayar, founder and chairman of Sampark Foundation and former vice chairman and CEO of HCL Tec
Vineet Nayar, founder and chairman of Sampark Foundation and former vice chairman and CEO of HCL Technologies

Nayyar raises some pertinent points in favour of moonlighting. “The use of the word ‘moonlighting’ is wrong. Is the senior management being part of other company boards ‘moonlighting’? When they invest their own money in start-ups and make profits, is that moonlighting? Is their trading in stock markets moonlighting? Is an editor writing a book or an article for other publications moonlighting? So, why do we call everything an employee does outside work as moonlighting?” he asks.

Also, moonlighting after regular working hours can cause fatigue and may impact the performance of the employee, which, in turn, may go against the entire concept of moonlighting and discourage companies from introducing such a policy.

“From an organisation's perspective, beyond the legal and ethical complications, there is the issue of work-life balance. When an employee indulges in moonlighting and self-rationalises that they are doing it only in the "after hours", they are missing the whole point. There is simply no way a person can juggle multiple jobs in a sustained manner and live a satisfied life without having an impact on their mental wellbeing,” says Rajendran Dandapani, director of technology, Zoho Corp. and president at Zoho Schools of Learning.

But Dandapani also believes that there is a need to look at various shades of grey inherent in the culture of moonlighting. “If an employee has a financial crunch that is pushing him/her to take up another side job, is there a way the person can communicate and get the required help from his/her company? Second, we are in the age of the creator economy. Individuals have passions and creative outlets that give them solace, help them unwind and might add to their personal goals.”

Akhil Gupta, co-founder and CTO, NoBroker, however, is absolutely against moonlighting and does not mince words in conveying so. 
Echoing Dandapani's views, he says, “I feel that it (moonlighting) is not an ethical practice. Other than that, if an employee works 40 hours a week (as recommended by many studies and World Health Organization) for a firm and dedicates another 10-20 hours a week for the side hustle, it disturbs work-life balance and there are chances of a burnout. For younger companies, especially, sitting in groups to brainstorm is more important as greater involvement is required. The same level of dedication cannot be accomplished from employees who are moonlighting.” He also goes on to say that NoBroker will not appreciate moonlighting and will not consider the policy or candidature.

Then there is the possibility of moonlighting backfiring on employees from a long-term job security perspective.

Rajendran Dandapani, director of technology, Zoho Corp. and president at Zoho Schools of Learning
Rajendran Dandapani, director of technology, Zoho Corp. and president at Zoho Schools of Learning

“Companies may start engaging and firing employees for short duration based on project requirements. Also, the company would not have any incentive to invest in the professional development of the employee and may even be tempted to have multiple employees working on small elements of the same job so that none can have an overall idea of the project and thus, avoid leakage of business secretes or its IP,” says Salman Waris, founder and managing partner, TechLegis Advocates & Solicitors.

Policy Factor

Under the Factories Act, dual employment is prohibited. However, in some states, IT companies are exempted from that rule. 

Before looking for side jobs or starting a business, it is crucial for employees to carefully check their employment contract with their regular job to ensure compliance with any moonlighting policies. 

Incidentally, if a company's employee contract explicitly prohibits moonlighting, it becomes illegal but restricting an employee's freedom through such a contract itself may be a violation of their constitutional rights.

There is also the point of what moonlighting comprises. Often, what comes under the purview of moonlighting is not clear and also not very well-defined. “If I work and take tuitions, is it moonlighting? If I develop software and drive an Uber in the evening, is it moonlighting? If I work in a bank and also have an Amazon/eBay vendor license to sell toys online, is it moonlighting? If I am a consultant and also direct movies or sell art, am I moonlighting? What consists of moonlighting is difficult to determine,” says Gartner’s Dey.

If adopted without proper safeguards, it could lead to employer performance and ethical issues and also legal disputes, specially relating to breach of confidentiality and also IP infringement where the same employee is working for two competing companies without their knowledge and consent. In spite of the employees' own intentions and care, there is bound to be certain overlap in IP generation and this could in the long run lead to disputes between the two companies.

“Whether moonlighting can be embraced as an industry norm shall only depend upon the maturity, nature and the internal policies of businesses. Sectors that employ or rely more upon consultant work may find it easier to adapt to moonlighting after making relevant changes and putting in place the appropriate legal safeguards, while businesses working in high tech, R&D and innovation space may find it difficult to adapt or accept the practice due to genuine concerns of breach of confidentiality,” says Waris, summing it up.

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