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Can a side hustle land you in hot water with your employer? An expert explains conflict of interest

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A lawyer explains when freelancing can lead to the suspension of an employee, and what legal recourse that employee has.
A lawyer explains when freelancing can lead to the suspension of an employee, and what legal recourse that employee has.
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Aside from needing the extra cash, you are good at managing your time and do not mind taking on freelance work.

As a result, you start a "side hustle" or accept a freelance job without disclosing it to your employer. 

When they learn of this, they suspend you from your duties.

This occurs often, according to Melanie Hart, an employment lawyer and Partner at Beech Veltman Incorporated, who explains why it is important to disclose if you are working elsewhere.

Recently a popular radio presenter, Rev Mzukisi Faleni, who presents the popular religious programme Imvuselelo (Revival) on Sunday evenings, was suspended for freelancing at another station.

It is reported that the radio personality who has been on the station for more than 20 years was suspended on 10 June 2022 by Umhlobo Wenene FM. 

"Employees have a common law duty of good faith towards their employers and, based on the duty of good faith, are obliged to disclose outside activities which may pose a conflict of interest," Melanie explains.  

Read more | Trying to negotiate a better salary? Here’s how to know if you’re being paid enough

Due to what she calls a conflict of interest, Melanie says employees are obliged to disclose if they are employed elsewhere, even if it's on a freelance basis. 

There's potential conflict of interest when an employee also works for another employer and, in effect, offers their services to two employers at the same time or conducts his/her own business for personal gain whilst employed, the lawyer explains.

Many contracts of employment contact clauses which prohibit an employee from performing any outside income-generating activities, she adds.

She explains that legally, employees who engage in side-line businesses without seeking prior permission from their employers are likely to face disciplinary action for conflict of interest or breaching the provisions of their contract of employment.

"In a recent judgment of Bakenrug t/a Joostenberg Meat v CCMA, the Labour Appeal Court found that an employee who had not disclosed her side-line business which was in the same market as her employer had been dishonest."

"The employee had been employed as a sales representative by her employer, which produced and sold a variety of meat products. Without having disclosed this to her employer, the employee conducted her own side-line business which promoted dried meat products.

"When this came to light, the employee was charged and dismissed for dishonesty," shares Melanie.

In some instances, the lawyer explains, as long as one discloses their 'side-hustle' and asks permission from their employer "it may be possible for an employee to seek permission upfront to freelance elsewhere".

"Certain moonlighting clauses confer a discretion on the employer to consent to the freelancing, provided that there is no conflict of interest and the freelancing does not impose on the discharge of the employee’s duties in terms of the employment relationship.

"The employer has the discretion to decide whether there is a conflict of interest.  It is not for employees to make judgment calls on whether their actions may give rise to a conflict of interest and should be declared." 

Read more | ‘I’m her equal. What gives my boss the right to give me a warning?’ – Aus Nthabi answers legal queries

An employer is entitled to impose suspension with pay when it is conducting an investigation into allegations of misconduct in order to ensure that there is no interference with the investigation, tampering with evidence or intimidation of witnesses  or pending the finalisation of disciplinary action, says Melanie.

"The suspension in the above instances would be with pay, unlike a suspension without pay which is imposed as a disciplinary sanction as an alternative to dismissal."

For the employee aggrieved by their suspension, there are legal steps they can take, Melanie adds.

"They can refer an unfair labour practice dispute relating to the suspension to the Commission for Conciliation, Mediation and Arbitration."

It is crucial that employees go through the terms and conditions of their employment as they are bound by them, the lawyer advises.

"Before signing a contract of employment, an employee should carefully scrutinise the provisions of the contract in order to ensure that these are reasonable and are not overly onerous.

"At the outset of the employment relationship, employees often sign a contract without properly considering the terms. Then, when it comes to resigning, the employee wishes to retract from certain agreed provisions, for example, a restraint of trade undertaking."

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