Introduction:
CLOCK IT BEFORE IT CLOCKS YOU: You clock out of work… and clock into your side hustle, but are you actually free from a legal duty in the eyes of the law?
In South Africa’s volatile and inconsistent economic climate, employees are often driven to generate additional streams of income to remain financially afloat. This practice of holding multiple jobs while employed by a primary employer, is commonly referred to as “moonlighting.”[1]
Legal Framework:
This practice is not expressly governed by statute in South African labour law; however, that does not exclude it from being regarded as a punishable offence. Thus, each form of practice should be analysed in terms of the broader framework and on a case-by-case analysis. The Basic Conditions of Employment Act 75 of 1997 (hereinafter referred to as the “BCEA”), ultimately provides for the basic working conditions and ensures that they are fair.[2] Essentially, the BCEA establishes the terms and conditions for employees to abide by. On the other hand, the Labour Relations Act 66 of 1995 (hereinafter referred to as the “LRA”), ultimately provides for the management of each individual relationship between employee and employer.[3] Therefore, it is responsible for regulating dismissals, breaches and the methods to resolve conflict within the workplace. Accordingly, although neither Act expressly regulates moonlighting, together they provide the foundational rules governing the employment relationship.
Duty of Good Faith:
Employment contracts are legally binding documents that exist between an employer and an employee which are enforceable upon either party. This agreement is crucial in understanding whether moonlighting is illegal or has other contractual or labour law ramifications. It is the cardinal duty of any employment relationship for the employee to act in the best interest of his/her employer and to furthermore protect and promote those interests above their own.[4] Thus, moonlighting raises the question as to whether these interests would be promoted while employees take on additional work.
Case by Case analysis:
Moonlighting was not expressly prohibited, yet South African case law has supported the Common Law principle that provides that an employee possesses a duty to always act in good faith towards their employer.
In the case of Sappi Novaboard (Pty) Ltd v Bolleurs[5], the court held that an employee has an implied duty to act in good faith towards their employer, which ultimately encapsulates the spirit of honesty. In this sense, moonlighting represents a contradiction where the spirit of honesty and good faith may be negated. Furthermore, if the duty to act in good faith is impinged, an employer then possesses the ability to dismiss an employee on the grounds of moonlighting as it is imperative that an employee always ensure that his fiduciary interests do not contradict with that of his employers.
In addition, moonlighting can also amount to a punishable offence where a conflict of interest occurs. Seen in Bakenrug Meat (PTY) Ltd t/a Joostenburg Meat v CCMA and Others[6], an employee was dismissed from her position where her involvement in moonlighting amounted to dishonesty and created a conflict of interest. Here, her own personal fiduciary interest involved selling meat similar to that of her employer, which resulted in a failure of her to give her full attention to the work of the primary employer. This ultimately took customers away from her employer, which is a direct conflict of interest.[7]
In respect of Vilakazi v CCMA and others[8], the court more recently ruled on a conflict of interest which was the result of employee moonlighting. In this case, an employee was employed as a full-time lecturer while taking up a full-time post at a reputable company.[9] In this instance, working hours became an obvious point of contention as the employee was obliged by both contracts to work the full-time hours. As a result of this, it was found that the conduct of the employee amounted to misconduct and would therefore once again be seen as a conflict of interest.[10] Therefore, the Labour Court considered the principles of conflicts of interest in relation to the practice of moonlighting and deemed it unacceptable and punishable. Furthermore, in relation to these cases it can be deduced that the discretion to allow for secondary employment should always fall on the employer, so to avoid future conflicts of interest.
Is it Unlawful?
The common trend across employment relationships is that the duty of good faith and similarly the spirit of honesty are inherent aspects to such an agreement. Hence, it is imperative for the employee to uphold these aspects, as failure to do so (when engaging in moonlighting practices) could lead to breaches of the contractual agreement. This can occur in instances where an employee lies about their work capacity and engages in other work during the hours of their primary source of employment. This presents a practical example of where a breach of the employment contract from moonlighting and can amount to dismissal. Thus, conflicts of interest and instances where the aspects of the employee relationship are negated in the practice of moonlighting are instances that will be deemed as unlawful as it leads to a direct competition with the employer and their own fiduciary interests.
Conclusion:
Moonlighting in South Africa is not inherently unlawful; however, it is not entirely risk free. As the legal framework and case law precedents state that, any secondary employment in terms of moonlighting is punishable in instances where the duty of good faith is not upheld, contractual terms are not complied with and there is a conflict-of-interest present. Furthermore, as an employer, the onus rests on them to ensure that restrictions on secondary employment are made clear, both contractually and through HR handbooks and that they are enforced properly.
Whether you are an employee navigating tough working restrictions and seeking advice on potential secondary employment, or an employer looking to protect your businesses interests whilst remaining compliant with regards to the disciplinary action against moonlighting, our firm provides tailored employment law advice to assist with interpreting contracts, managing conflicts and resolving disputes.
If moonlighting is creating increased risk for you or your business, clock-it before it clocks you.
Bibliography:
Case Law:
Bakenrug Meat (PTY) Ltd t/a Joostenburg Meat v CCMA and Others (CA8/2020) (LAC).
Sappi Novaboard (Pty) Ltd v Bolleurs (1998) 19 ILJ 784 (LAC).
Vilakazi v CCMA and others (JR164/20) [2023] ZALCJHB 319.
Journal Articles:
Tshoose, CI & Kgaphola, JM (2023) ‘The pros and cons of a side hustle in an employment relationship: Bakenrug Meat (Pty) Ltd t/a Joostenburg Meat v CCMA [2022] 4 BLLR 319 (LAC)’. Obiter 447- 458.
Legislation:
The Basic Conditions of Employment Act 75 of 1997.
The Labour Relations Act 66 of 1995.
[1] Tshoose, CI & Kgaphola, JM (2023) ‘The pros and cons of a side hustle in an employment relationship: Bakenrug Meat (Pty) Ltd t/a Joostenburg Meat v CCMA [2022] 4 BLLR 319 (LAC)’ page 447. [2] The Basic Conditions of Employment Act 75 of 1997. [3] The Labour Relations Act 66 of 1995. [4] Tshoose, CI & Kgaphola, JM (2023) page 448. [5] Sappi Novaboard (Pty) Ltd v Bolleurs (1998) 19 ILJ 784 (LAC) para 7. [6] Bakenrug Meat (PTY) Ltd t/a Joostenburg Meat v CCMA and Others (CA8/2020) (LAC) para 1. [7] Bakenrug Meat (para 4). [8] Vilakazi v CCMA and others (JR164/20) [2023] ZALCJHB 319 para 34. [9] Vilakazi para 40. [10] Vilakazi para 79.By Jordan Meyer
Candidate Attorney at Adriaans Attorneys
While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of the articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes and should not be construed as legal advice.
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