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Working A Side Hustle? Here’s What The Law Says

With the ravages of COVID-19 since early 2020, has come a rise in employees in full time employment taking on a ‘side hustle’ to supplement income. Further to this, remote working provides employees with a great opportunity to engage in secondary jobs, especially where once being at the office may have been a hindrance.

However, striking a balance between the demands of a second line of employment, whilst maintaining deliverables in one’s primary 9-5, can result in blurred lines. There are potentially two practices at play; the first being moonlighting, or the more “woke” concept of a ‘side hustle’. Moonlighting is when employees, during their own time (or even during employer time), and outside working hours of their primary employment undertake to offer services to another employer for reward. A ‘side hustle’ is typically defined as additional work which a person is more passionate about than their full-time day job that supplements their income.

The second practice at play is contractual obligations between the employer and employee. South African law does not explicitly preclude an employee from earning an additional income, and the general principle is that an employee cannot be unreasonably kept from supplementing their income. However, there are circumstances in which this may not be allowed, such as being expressly prohibited in terms of the employment contract, a workplace policy, and when it actually or potentially harms the primary employer’s business, or when it negatively impacts the persons capacity to work. 

To prevent uncertainties in the workplace, employers typically regulate this practice by expressly prohibiting a secondary occupation in employment contracts, workplace policies and/or collective agreements. This is mostly considered as best practice, and employers who do not have these forms of restrictions, are advised to do so, especially in the existing economic climate.

In addition, an employer may also limit the practice by providing that an employee must disclose the practice in advance and that it would be subject to the employer’s discretion for the employee to continue with their additional venture.

If a prohibiting clause or workplace policy does not exist, an employee may have a secondary job provided that it does not contravene the standards of the primary employment relationship. Additionally, it should be stipulated that there is no conflict of interest with the primary employer and the primary employer is not prejudiced for instance by the employee incapacitating himself in some form by reduced output or performance. At the heart of the employment relationship are trust and confidence, and an employee is expected under the law to be honest, loyal and promote the business in the best interests of the employer. 

If the employee’s secondary job compromises the employment relationship it may result in possible disciplinary action and dismissal depending on the circumstances.  The Labour Appeal Court has held that for moonlighting to be effectively prohibited there must be a specific rule stating that it is not permissible, and the rule should be known to employees.

There have also been instances where an employee takes sick leave to attend to their secondary job. When an employer suspects this is occurring in the workplace, the employer should conduct a fair investigation. Where the conduct is established in addition to moonlighting the employee would be guilty of dishonesty or fraud which would be a basis for dismissal.

In closing, employees who moonlight or ‘side hustle’ should do so with eyes wide open.  Employers who do not regulate moonlighting or ‘side hustles’ should do so, as it is important to establish clear boundaries in the employment relationship.