Can your side hustle get you fired?

The term ‘side hustle’ is new to me, yet the concept or principle is as old as the mountains. The term relates to old fashioned ‘moonlighting’, ‘out work’ or ‘private work’. In July 2019 the Henley Business School published an in-depth report/white paper on ‘Examining the “Side Hustle” Economy’. (The Report)

The reality of today, especially in the current economic climate, is that an increasing number of full-time employees (MISA Members included) have a second income, through a side hustle, which varies from having a second job; freelancing, or running their own business. According to the Report, the survey revealed that the most common response among ‘side hustlers’ (that is 71.3%), was that they need to earn additional income. Reliance on a single income only, seems to be limiting and unsustainable as, according to the report in 2019, one out of every three South Africans are working additional jobs.

Equally so, having a ‘side hustle’ and relying on this second income is a dangerous position to be in, especially when your employment is regulated by your Employment Contract and Collective Agreements, prohibiting side hustling.

Retail Motor Industry and ‘Side Hustling’

The MIBCO Main Collective Agreement (The Agreement) regulates the Retail Motor Industry. In this regard the Agreement prohibits ‘out-work’, which is in essence side hustling. This prohibition on out-work is found in Clause 9.1 of the Agreement and reads as follows: ‘No employee shall…solicit or take orders for or undertake any work falling within the scope of the Motor Industry as defined in this Agreement, whether for gain or not, other than for his employer: Provided that this paragraph shall not be construed to prohibit an employee from working on a motor vehicle registered in his own name.’ (Own Emphasis)

The clause continues to prohibit an employee in the Retail Motor Industry to ‘engage in trading in motor vehicles or accessories on his own account or on behalf of any person or firm other than his employer.’

Important to note is that an argument of ‘no financial benefit/remuneration’ will not mitigate the breach, should you be found guilty of outwork/side hustling/moonlighting (Hustling).

The default position in the Retail Motor Industry is that hustling is prohibited. Bear in mind that the Code of Good Practice: Dismissal in item 7, gives the aspects to consider in evaluating whether an employee is guilty of misconduct and whether the misconduct is dismissible. That is whether there is a rule in place, and if so: was the employee aware of the rule; was this a valid rule and does the employer apply the rule consistently. The reality is, there is a rule!

Conflict of Interest and Duty of Good Faith

Employers might consider authorizing your hustling and only once authorised, you will be protected. Employees are contractually obligated to dedicate their focus to the duties they were employed to perform for the contractual hours of employment. Employers are entitled to expect that their employees devote their full attention to their contractual duties during working hours. MISA did an article on ‘Duty of Good Faith’ which is in essence the foundation of the employee-employer relationship. It is in the spirit of good faith that employees should not engage in activities that is in conflict with the contractual duties with their employer.

This principle was confirmed by the Supreme Court of Appeal in Ganes v Telecom Namibia Ltd (2004) (3) SA 615 (SCA) and had the following to say in regard to ‘duty of good faith’: ‘As an employee of the (company) and in the absence of an agreement to the contrary the (employee) owed the (company) a duty of good faith. This duty entailed that he was obliged not to work against the (company’s) interests; not to place himself in a position where his interests conflicted with those of the (company); not to make a secret profit at the expense of the (company); and not to receive from a third party a bribe, secret profit or commission in the course of or by means of his position as employee of the (company).” (Own Emphasis)

In 2016 the Labour Court, in Martin & East (Pty) Ltd v Bulbring N.O. and Others [2016] 5 BLLR 475 (LC), overturned the decision of a CCMA Commissioner. The employer in this instance charged the employee with dishonesty, fraud, bringing the company’s name into disrepute and breaching the company’s rule in respect of ‘moonlighting’. The employer stated that the employee had contravened the rule in that he ‘did not declare or obtain written approval to present training to an external company for remuneration over the period 27 February 2013 to 3 March 2013.’

The CCMA found in favour of the employee and held that the rule was not consistently applied by the employer and awarded the employee compensation. The Labour Court on review overturned the award and held that the employee was guilty of all charges levelled against him including breaching the company’s rule in respect of moonlighting. The court further held that the employee had acted to the prejudice of his employer for his own benefit. This, according to the court, destroyed the relationship of trust between the employee and the employer.

Conclusion

Despite a very poor economic climate, facing financial challenges and still recovering from the financial prejudice suffered as a result of the COVID-19 pandemic and/or possible retrenchments, I urge you to not take matters into your own hands! Please evaluate your position, if you are currently engaged in hustling, at the hand of your current job security versus possible dismissal.

Engage with your employer, be transparent and obtain permission prior any undertaking or consideration of engaging in outwork/side hustling/moonlighting.

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