Do labour laws in India allow a Worker to pursue a Business while working at a Factory?

Labour laws in India specifically prohibit ‘Double Employment’. Section 60 of the Factories Act, 1948 prohibits double employment. No worker to whom the Act applies may be permitted to work or made to work in any factory on the same day on which he has already worked in another factory. One of the purposes of this provision is to provide for adequate rest for the worker so as to maintain his efficiency, and to not cripple him with excessive work.

Under Indian employment law, with respect to employees working in a Commercial Establishment, such employees and Establishments are governed by the respective Shops and Establishments Act. In general, the relationship between and employer and an employee in a Commercial Establishment his governed by the Contract of Employment, the Service Rules and Policies of the Establishment.

The corresponding provision restricting Double Employment in a State, say, Maharashtra is contained in Section 65 the Bombay Shops and Establishment Act, 1948 and reads as under:

‘Section 65: Restriction on double employment on a holiday or during leave

“No employee shall work in any establishment, nor shall any employee knowingly permit an employee to work in any establishment, on a day on which the employee is given holiday or is on leave in accordance with the provisions of this Act.”

The above quoted provision lays down a negative obligation primarily on the employee not to work in an establishment on holidays or on days on which he is on leave. The purpose of this provision is to allow for the employee to tend his familial and social obligations, and to ensure that the employee is in a conducive state of mind and is physically fit to attend to his duties in the establishment.

It is an accepted principle under labour laws in India that if an employee extends his services to any other establishment without seeking the permission of the commercial establishment in which he is initially employed, it shall be considered an act subversive of discipline by Indian employment law, whether or not such services are extended during or after working hours of the initial commercial establishment.

An “act subversive of discipline” is a serious aberration and has wide connotations under Indian employment law. In general, any act which tends to prejudicial affect discipline may amount to an act subversive of discipline. A Company hires the services of an employee upon some compensation, usually in the form of a salary and other benefits. Every employee is, therefore, expected to devote his full time and energy to the affairs of the employing establishment during its working hours. The efficiency of any employee is a matter of high importance to an employer and hence, a drop in efficiency is a matter of concern for the employer.

After working hours, an employee is expected to return home to his family, or undertake a leisurely or social activity that will serve to alleviate work pressure and allow him to be mentally and physically prepared for the following workday. An employee is expected to work with dedication for his employer, and family tensions, or tendencies to drink excessively or gamble, or take up additional employment may directly affect the working of the employee for the employer. Even where an employee is employed in the absence of an Employment Agreement or absence of any fixed Service Rules or Policies in a Commercial Establishment, he is still bound to work with full efficiency and dedication.

It may also be noted that Section 35 of the Bombay Shops and Establishments Act, 1948 restricts the employer from making an employee work in a commercial establishment on four prescribed public holidays, and further provides that the employer requiring an employee to work on such days will have to pay double the average daily wages to such employee for every such day on which he works, and shall also have to grant a compensatory paid leave to the employee for every such day on which he works. This is further indicative of the fact that the employer is expected to provide employees with the opportunity to enjoy time with their family, etc., and the employee is expected to utilize this time to recharge and re-energise himself.

An employee hired on a full time basis is expected to dedicate his full time to the organization as aforementioned. As per labour laws in India, if such an employee works elsewhere even without any compensation or reward, it can still be considered as a violation in the standard of behaviour expected of him or Misconduct on his part and the Management can take strict action against the employee, including termination of his services if he is found to be working elsewhere. The Management can do so by recording reasons in internal order and after issuing a Show Cause Notice to the concerned employee as per procedure laid down under Indian employment law..

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