South Africa: Thinking About Moonlighting Or Having A "Side Hustle"? Think Twice…

What is moonlighting?

The term "moonlighting" refers to the practice of an employee having an extra job or a "side hustle" in addition to their ordinary job, usually without the knowledge of their employer. Typically, the employee will devote extra hours to the "side hustle" after their ordinary working hours and sometimes, depending on the nature of work, during their ordinary working hours.

Moonlighting does not necessarily constitute a breach of the employment contract, although in some instances it may, depending on the contractual provisions. Notwithstanding this, moonlighting may nevertheless create a conflict of interest and result in a breach of the duty of good faith owed by the employee towards the employer. This conflict may take various forms. For example, the additional job may take the form of competing with the employer or making use of the employer's assets. It may also arise from the fact that the activities associated with the additional job mean that the employee is unable to perform their obligations towards their employer adequately. It is on that basis that it remains necessary for an employee to obtain prior approval for moonlighting before they engage in it.

Recently, the Labour Court in Vilakazi v Commission for Conciliation, Mediation and Arbitration and Others, was confronted with a situation where an employee had engaged in moonlighting and was consequently dismissed as a result of her conduct.

Factual background

Dr Sibongile Vilakazi ("Dr Vilakazi") was initially employed by the University of Witwatersrand ("Wits University") as a part-time lecturer on 1 August 2017. At this time, Dr Vilakazi was also employed by Alexander Forbes. She declared her employment by Alexander Forbes. Wits University was nevertheless prepared to employ her on this basis.

In May 2018, Dr Vilakazi resigned from Alexander Forbes and took up full-time employment with Wits University as a lecturer. In terms of her new contract of employment, her remuneration package was R787,520.00 per annum. In her contract, she agreed to familiarise herself with all policies applicable to Wits University's permanent academic staff. The Wits University's Declaration of Interests Policy ("Declaration Policy") required that any involvement in any external institutional affairs, including moonlighting, had to be approved by the Vice-Chancellor's office.

Shortly after taking up full-time employment with Wits University, Dr Vilakazi also took up full-time employment with Kantar South Africa (Pty) Ltd ("Kantar") as an Accounts Director. At Kantar, Dr Vilakazi earned a monthly salary package of R91,667.00 per month, approximately R36,000.00 more than what she was earning at Wits University. In terms of her contract with Kantar, Dr Vilakazi agreed not to be directly or indirectly interested in any business of any kind whatsoever, without Kantar's prior written permission. She even agreed to a restraint of trade.

Dr Vilakazi did not disclose her intention to take up employment with Kantar to Wits University and did not obtain prior written approval, as required by the Declarations Policy. When Wits University discovered this state of affairs, Dr Vilakazi was subjected to a disciplinary hearing in which she was accused and found guilty of misconduct as a consequence of her employment with Kantar. She was subsequently dismissed.

Aggrieved by her dismissal, she referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration ("CCMA"). The CCMA Commissioner found that Dr Vilakazi's dismissal was procedurally and substantively fair. Dr Vilakazi then launched a review application in the Labour Court to review and set aside the CCMA arbitration award.

Labour Court's decision

At the outset, the Labour Court expressed its full agreement with the findings of the CCMA Commissioner.

The Labour Court found that Dr Vilakazi's obligations arising out of her employment relationships with both Wits University and Kantar did not contemplate, and would be incompatible with, Dr Vilakazi taking up full-time employment with another employer. The two contractual relationships she had with the two employers were mutually destructive and could not practically co-exist.

The Labour Court reiterated that employees have a common law duty of good faith towards their employers and that duty includes always acting in the employer's best interests. In this case, the Labour Court found that the fact that Dr Vilakazi earned more at Kantar meant that she would choose Kantar's work, should both of her employers require work to be performed at the same time. Accordingly, the Labour Court found that a conflict of interest which would prejudice Wits University existed.

Dr Vilakazi contended she could do the work of the two positions, her position at Kantar would not prejudice Wits University, and there was no conflict of interest. The Labour Court dismissed this contention and emphasized that it is not for an employee to determine the appropriateness of moonlighting and that, instead, the employer is best placed to make that determination.

Accordingly, the Labour Court found that Dr Vilakazi had earned her dismissal, which was, in the circumstances, substantively and procedurally fair.

Commentary

In this decision, the Labour Court appears to have accepted that the dismissal was fair for two reasons. The first was that Dr Vilakazi had breached Wits University's Declaration Policy. The second was that, irrespective of the policy, she had breached the duty of good faith owed to her employer.

The first point that can be made in this regard is that an employer can justify a dismissal based on moonlighting, even if there is no express prohibition of this activity in the contract of employment or a policy. This will be the case where there is a breach of the duty of good faith. Secondly, in the interests of certainty and to ensure that employees know what is expected of them, employers should preferably regulate the issue by contract or in a policy. Finally, a dismissal could be unfair even if an employee has breached the contract or a policy. This would be the case, for example, where the nature of prohibitions contained in the policy are so extensive and restrictive that it would be unfair or contrary to public policy, given the status of the employee and/or the type of duties the employee performs, to apply it to that employee.

Reviewed by Peter le Roux, an Executive Consultant in ENS' Employment practice.

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