The contracts or employees’ appointment letters of Indian IT companies are phrased to prevent ‘moonlighting’. The phrase ‘moonlighting’ refers to employees working for others in their free time. Even though the companies don’t use the word ‘moonlighting’, the contracts, in essence, are laden with warnings of strict action against employees who wish to venture out for freelance gigs while being employed with the company.
Business Today took a look at the employment contracts of IT majors TCS, Infosys, Wipro, Tech Mahindra, and HCL Tech, and found that all these IT behemoths have clauses that do not allow secondary employment.
TCS’ employment contract does not allow employees from taking up secondary employment. The only way employees can ‘moonlight’ is after taking written permission from the company. Failure to fulfill this condition would entitle TCS to withdraw the job offer at its discretion.
The contract reads, “Either during the period of your traineeship or during the period of your employment as a confirmed employee of TCSL, you are not permitted to undertake any other employment, business, assume any public or private office, honorary or remunerative, without the prior written permission of TCSL.”
N Ganapathy Subramaniam, the Chief Operating Officer (COO) and Executive Director at Tata Consultancy Services (TCS) recently told Business Today at India@100 Summit that employees might lose out in the long term if they chase short-term gains via moonlighting.
Also Read: Why IT majors TCS, Wipro and Infosys are scaling back on variable payout – BusinessToday
Subramaniam explained, “Moonlighting is an ethical issue, we need to inculcate the ethics and the idea of being right and if we make something like this for short-term gains, in the long-term we will lose out.” Subramaniam further said, “If you look at it as a war, it is a war. Business is all about operating within constraints.”
The Infosys employment contract also does not make it easy for employees to take up secondary employment. The terms and conditions section of the employment contracts highlights, “You agree not to undertake employment, whether full-time or part-time, as the Director / Partner Member/Employee of any other organization/entity engaged in any form of business activity without the consent of Infosys. The consent may be given subject to any terms and conditions that the Company may think fit and may be withdrawn at any time at the discretion of the Company.” This is a compulsory condition of employment.
Former Infosys director, Mohandas Pai, who in the past has called out the Indian IT companies, had expressed his displeasure on IT companies trying to prevent ‘moonlighting’. He told Business Today, “No, moonlighting is not cheating.” He further explained, “I would look at it from a different perspective. Employment is a contract between an employer who pays me for working for them for ‘n’ number of hours a day. During that time, I have to abide by their conditions, including client confidentiality, and I’m paid for that. At that time, I can’t work for anybody else. Now what I do after that time is my freedom, I can do what I want.”
Also Read: ‘No, moonlighting is not cheating’: Former Infosys director Mohandas Pai disagrees with Wipro’s Rishad Premji – BusinessToday
Interestingly, the Infosys contract also has a clause that deters employees from working with the company’s competitors for a period of 6 months after they end their employment with the IT company. The list of companies named in the agreement includes all major players in the IT sector.
The Non-Compete agreement section of the contract says,
“I agree that for a period of six (6) months following the termination of my employment with Infosys for any reason, I will not:
The. accept any offer of employment from any Customer, where I had worked in a professional capacity with that Customer in the twelve (12) months immediately preceding the termination of my employment with Infosys;
B. accept any offer of employment from a Named Competitor of Infosys, if my employment with such a Named Competitor would involve me having to work with a Customer with whom I had worked in the twelve (12) months immediately preceding the termination of my employment with Infosys.
For the purposes of this Non-Compete Agreement, “Named Competitor” shall mean the following entities and their wholly owned subsidiaries:
i. Tata Consultancy Services Limited
ii. Accenture Limited
iii. International Business Machines Corporation
iv. Cognizant Technology Solutions Corporation
v. Wipro Limited”
The appointment letter by Wipro clearly states that employees have to exclusively work for the company. In case they want to engage in secondary employment, they would need consent from their Business Unit Head. This is a compulsory condition of employment.
“You are required to engage yourself exclusively in the work assigned by Wipro and you shall not take up any independent or individual assignments (whether part-time or full time, in an advisory capacity or otherwise) directly or indirectly without the express written consent of your Business Unit Head.”
Despite this option of ‘moonlighting’ through consent, Wipro executive chairman Rishad Premji had recently made his view clear on the issue and tweeted saying moonlighting amounted to “cheating”.
Also Read: ‘It’s not cheating’: IT employees disagree with Wipro’s Rishad Premji on moonlighting – BusinessToday
Tech Mahindra’s employment agreement states that taking up secondary employment without the permission of the company would result in the termination of the employee without notice or liability.
“Your position with The Company calls for whole time employment and you will devote yourself exclusively to the business of The Company. You will not take up any other work for remuneration (part time or otherwise) or work on advisory capacity or be directly interested or indirectly (except as shareholder or debenture holder) in any other trade or business, during your employment with The Company, without written permission from The Company. Contravention of this will lead to termination of your services from The Company without any notice, with or without any liability on the part of The Company for payment of any compensation in lieu of such notice as per the procedure mentioned in Section 3.”
Unlike Premji, the Managing Director and Chief Executive Officer of Tech Mahindra, CP Gurnani, recently expressed his openness to the idea of ’moonlighting’. Gurnani told Business Today, “I have no problem. I would like to make it a policy.”
Also Read: Moonlighting debate: ‘I have no problem,’ says CP Gurnani of Tech Mahindra – BusinessToday
“If you go by my word if someone is meeting the efficiency and productivity norms, and he wants to make some extra money as long as he is not committing fraud, he is not doing anything against the values and ethics of his company,” Gurnani explained.
The employment contract at HCL Tech also frowns upon the practice. It says, “You agree not to undertake employment whether full time or part time, as the Director/Partner/member/employee of any other organization or entity engaged in any form of business activity without the consent of HCL. The consent may be given subject to any terms and conditions that the company may think fit and may be withdrawn at the discretion of the company.”
This is a compulsory condition that employees need to follow to continue working at HCL Tech.