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Blog Overview Chronicles 3 things you must know about ‘dual employment’ in India

3 things you must know about ‘dual employment’ in India

3 things you must know about ‘dual employment’ in India

Two-timing. Whether the receiver’s a romantic partner or an employer, the phrase just doesn’t bode well with either of them.

Such is the story of ‘dual employment’. It is technically a fraudulent employee two-timing the employers.

dual-employment-definition

Not long ago, The Economic Times published an article about how the pandemic has fuelled fraud types like fake job history and dual employment. And, given the high adoption of remote and hybrid work cultures, these fraud types won’t decrease in numbers. To say the least, dual employment is a pressing issue in India.

In this blog, I will share 3 things that you must know about dual employment in India to safeguard your company.

1. Dual employment law in India

Can a person work in two companies in India? Is dual employment legal in India? Let’s find out.

There are multiple Indian laws that put restrictions on dual employment. Only each one speaks for a different kind of employing entity. Let’s look at them. 

1. The Factories Act, 1948

Extending to the whole of India, in its section 60, this act puts a restriction on double employment for employees employed at factories. It says ‘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.’ 

2. The Shops and Establishments Act

The employing entities that aren’t a ‘factory’ (as per section 2 (m) of the Factories Act) fall under this act. Employment and working conditions in shops, commercial establishments, residential hotels, restaurants, eating houses, theaters, other places of public amusement or entertainment, and other establishments are regulated by this act. 

Every state has its own Shops and Establishments Act. Let’s look at some: 

  • Shops and Establishments Act, Bombay 

Section: 65

What: Restriction on double employment on a holiday or during leave

It says that: ‘No employee shall work in any establishment, nor shall any employer knowingly permit an employee to work in any establishment, on a day on which the employee is given a holiday or is on leave in accordance with the provisions of this Act.’

  • Shops and Establishments Act, Delhi

Section: 9 

What: Restriction on double employment

It says: ‘No person shall work about the business of an establishment or two or more establishments or an establishment and a factory in excess of the period during which he may be lawfully employed under this Act.’

Other states that have put a restriction on dual employment are J&K/Ladakh, Goa, Daman & Diu / Dadra & Nagar, Telangana, Andhra Pradesh, Puducherry, Assam, Meghalaya, and Mizoram. Find more details here.

3. Industrial employment (standing orders) Central Rules

Under section 8 in its Schedule I B, this act issues an order for ‘exclusive service’. It says:

‘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.’

Inference:

According to the Factories Act, during an employee’s working period at a factory, he/she cannot work at any other factory. 

In addition, the Shops and Establishments Act talks about how an employee cannot work with other employers on holidays or leaves. It further puts the onus on the employee to make sure that he/she is only working with one employer at once. Yet, it also puts the responsibility on the employers to take proper precautionary measures. 

Any breach in these acts by an employee can lead to adverse actions against him/her. Termination, a lawsuit, hefty payment to the employer, etc. are some end actions taken against the employee. 

As different as these acts seem, they are all trying to achieve the same aim: stopping dual employment. A man can only provide so much quality work. And yet, it’s again divided into multiple receivers, as in the case of multiple employments, no receiver can fully benefit. 

2. Company policy against dual employment in India

It’s called the ‘Moonlighting Clause’. 

Moonlighting is the practice of working on a second job outside the normal working hours of the primary job. A visual representation would look something like this:

 

moonlighting-clause-in-employment

 

The moonlighting clause is a ‘Negative Covenant’, that is, a clause that stops employees from performing ‘moonlighting’ or having more than one job at once. This clause is agreed upon and signed with the consent of both the parties (the employee and the employer). 

An employer usually conveys the Moonlighting Clause to the employee via the offer letter, an agreement, or an employment contract. In India this clause is enforceable and it can be enforced wherever necessary.

Here is an in-depth blog, if you want to know more about Moonlighting Clause.  

Here are some samples of the clause. 

3. How to check for dual employment in India

To prevent dual employment fraud, pre-employment background verification is a must to make sure that the candidate’s slate is clean before s/he joins your company. 

Digital BGV checks like an EPFO check (Employee Provident Fund Organization) can help in identifying dual employment fraud. Here’s how:

1. Send your candidate’s UAN number to your BGV vendor 

2. Your BGV vendor will quickly run it via EPFO’s official database 

3. If any current employment (other than your company’s), or a discrepancy in the leaving date of a past job is spotted, it’s a red flag 

IDfy’s digital EPFO check is instant and gives you results in real-time. It’s reliable and trusted by the likes of Amazon, HDFC, Zomato, and more.

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