Dual Employment – It’s more prominent but what is it?

As NRP advances, a lot has changed over these past two years; especially for those who have found themselves having to look for alternative arrangements to support themselves

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What is dual employment? Is it allowed? (Image for illustration purposes only)

As the National Recovery Plan (NRP) advances, the notion of economic operations being able to operate at 100% capacity no longer seems like a pipe-dream. Nevertheless, we have to acknowledge that a lot has changed over these past two years; especially for those who have found themselves having to look for alternative arrangements to support themselves due to pay cuts and unpaid leave schemes. More people have joined the world of delivery drivers or discovered the benefits of setting up online businesses to supplement their income.

What happens now when they need to return to their primary occupation full time? After finding benefits in being able to supplement their income either as a necessity or just for added spending money, will we now see a great section of the population working dual employment?

Let’s answer some pertinent questions; –

  • What is dual employment?
  • What impact does it have on an employer?
  • What does the law say?
  • How can employers manage the situation in a fair and reasonable manner?

What is dual employment or moonlighting?

Dual employment is a situation where an employee holds double paid jobs, either as an employee or as being self-employed. Many terms have been used to describe dual employment including double employment or the commonly used phrase moonlighting. The idea of employees having side income has been one that has existed for ages. With the rising popularity of entrepreneurialism, employees have switched from just selling from physical catalogues in the day of Avon and Tupperware to online businesses having almost dual full-time employment.

What impact does it have on an employer?

Dual employment may not sound so bad and employers understand that their control over an employee is not absolute. Employees have a right to do what they wish in their free time.

Nevertheless, research has shown that over time, having dual employment can contribute to an employee having poor performance issues, increased absenteeism, increased medical issues and heightened job stress as a consequence of having to juggle the responsibilities of dual employment with their own personal lives.

For an employer, this leads to an increase in disciplinary issues and having to oversee increased performance improvement plans (PIP’S) and less dedication to the organisation. In more serious cases, issues of conflict of interest may arise affecting the employer’s business. Further, with the newly introduced S.17A of the Malaysian Anti-Corruption Commission (Amendment) Act 2018, we need to ensure the employer won’t be found party to any bribery or corruption issues that may arise from the employee’s conduct.

What does the law say?

Malaysia does not actually have any laws that specifically address this issue. We are then left to rely on court awards. Cases in the past like Dato’ See Teow Chuan & Ors v Ooi Woon Chee & Ors and other appeals (2012) 6 CLJ 535 have linked dual employment to breaching fiduciary duties, “A fiduciary who acts for two principals with potentially conflicting interests without the informed consent of both is in breach of the obligation of undivided loyalty; he puts himself in a position where his duty to one principal may conflict with his duty to the other.”

Essentially, the law recognises mutual trust and confidence, the fiduciary relationship, between the employer and employee as key wherein the employee is expected to perform his duty duly and faithfully and failure of doing so will cause a possible termination of the employee by the employer.

It also recognises the fact that as long as the dual employment the employee is involved in is a private act and doesn’t affect the employer or (in legal terms, as long as the mutual trust and confidential relationship between an employee and employer is maintained and sustained throughout the whole employment), then the employer shall have no power to control over employees in such matters.

How can employers manage the situation in a fair and reasonable manner?

Employers now have options.

An employer can choose to take the strict approach and rule that dual employment is not permitted in the organisation as a term of the contract of employment. This makes any whiff of dual employment a potential breach of fiduciary duty to the employer – Simple and clear cut.

Otherwise following the line of the often quoted case of Fullwood v. Hurley – “No agent who has accepted an employment from one principal can in law accept an engagement inconsistent with his duty to the first principal from a second principal, unless he makes the fullest disclosure to each principal of his interest, and obtains the consent of each principal to the double employment.”

As dual employment involves private acts by employees, it would be better for the employer to be able to have awareness of dual employment occurring and some semblance of control over the issue.  It is advised that employers allow for dual employment to occur but only if the employee seeks the employer’s permission first, and upon scrutiny, it is assured that there is no conflict of interest or even a potential one between the principal employer’s business and the secondary one.

Accordingly, policies should be drafted to provide employees with guidance on the stand the employer takes including the do’s and don’ts in relation to its practice. Best to also provide the likely ramifications of the dual employment is found to interfere with the principal job- for example, poor performance action.

In conclusion, the issue of dual employment is an increasingly common one, more so as a result of the COVID-19 pandemic. Acts of Parliament like the Employees’ Security Act, 1966 do provide provisions pertaining to the contribution of SOCSO by multiple employers. Therefore, it is an issue that is here to stay.

In the absence of Government guidelines, it is left to the employers to regulate on their own. In the end, it would be best to have a relevant policy and require permission to be sought from the employer first should an employee wish to have or continue with dual employment especially once they are back to work full force.