Employee working a second job – what can employers do?

People have second jobs for many reasons. They may need to earn additional income, want to monetise on a hobby or perhaps they want to change career and are looking to learn new skills or gain experience in a particular work environment.

If you have learned that an employee is working a second job, it’s natural you will have some questions regarding the legal implications of working two jobs. There may be a conflict of interest if the employee is working in the same sector or you may be concerned that the employee will be less productive when working with you due to over-exertion.

Over-working also commonly results in workplace stress, which employers have a duty of care to help avoid. Workplace stress can have serious health implications on employees and can impact their performance and potentially lead to stress-related sickness absence.

Many employees may not want to disclose the fact they’re working a second job as they may feel that they’ll be treated unfavourably when it comes to new opportunities and promotions.

This guide on employees working a second job will help you understand your obligations when it comes to employees working second jobs.

What is the law on having two jobs?

There is no statute prohibiting employees from working two jobs or allowing employers to take disciplinary action against employees for simply having another job.

However, the employee’s contract must be considered as there may be provision that sets out agreed terms for secondary employment. If having a second job is prohibited under the contract, the employee could face disciplinary action due to a breach of contract.

Working Time Regulations

In relation to second jobs, one of the challenges employers face is where employees are working beyond the legal limit, which may result in the employer breaching Working Time Regulations 1998 (SI 1998/1833).

The Working Time Regulations were introduced to protect the health of employees and workers. They also avoid health and safety issues that could arise when employees are overworked and fatigued, leading to accidents at work.

Under Regulation 4 of the Working Time Regulations, employers are responsible for ensuring employees do not work over 48 hours per week. An employee’s hours are worked out by taking the average number of hours worked over a 17-week period.

Within the Working Time Regulations, employees are also entitled to a 20-minute break when working over 6 hours. Employees are also entitled to a certain amount of rest time per week. The Regulations set out that employees should have 11 hours rest period within 24 hours and at least 24 hours of rest within a week.

These regulations apply to all employees. However, employees can choose to opt-out of this requirement by submitting an agreement in writing to their employer.

If it has come to your attention that an employee is working a second job, you should ask them to confirm they are not working over 48 hours per week. If they are, you should request that they proceed with the opt-out agreement with the Working Time Regulation 1998 to limit your liability.

It’s also important that you consider if the employee working outside of their main job could have any health and safety implications and if any steps need to be taken to reduce risk.

What does the employment contract say?

When considering the legal implications of working two jobs, both employees and employers must consider what the employee’s contract says regarding this.

Some employers will insert a clause stating that the employee cannot work another job that could present a conflict of interest. It could also state that employees must seek permission before taking on a second job. Alternatively, you could include a clause requiring the employee to disclose having a second job to their employer.

If the employee is in breach of any provision within their contract, you may be able to bring disciplinary action against them.

When the contract is silent on second jobs, the employer cannot prohibit employees from having another job.

In either case, it is advisable to encourage open communication with your employees to ensure you are aware of their activities and any additional employment they may take on, and the potential implications of this, such as ensuring working another job does not affect their performance or ability to work with you.

Do employees have to tell their employer about a second job?

There is no statutory obligation for employees to tell their employer about their second job. There would need to be a contractual provision requiring the employee to disclose a second job.

However, under common law, employees cannot compete with their employers. These are under implied terms of ‘loyalty’.

Can an employee have a second job without their employer’s permission?

Employees don’t need the permission of their employer to take on a second job unless their contract requires them to do so.

If this is not provided for in the employee’s contract, employers can still ask about their employee’s second job to understand the full scope of the job to understand if it will interfere with their job with you.
An employer cannot refuse permission if this requirement isn’t included in the contract.

Can you stop an employee from having a second job?

You can prevent an employee from taking a second job by including a contractual provision prohibiting them from having one.

It’s also reasonable for employers to include a provision prohibiting the employee from having a second job that would raise a conflict of interest but doesn’t prohibit employees from taking on second jobs in general.

It’s common for employers to include such provisions for higher-level employees as employers want them to dedicate all their working time and energy to them. Higher-level employees are more likely to hold important or private information about the company that the employer would not want to risk them sharing with anyone else in the industry.

Can you amend an employee’s contract to add a clause to prohibit second jobs?

It may be possible to retrospectively add or amend a clause to an employee’s contract but to do this, you will first need to consult the employee and obtain their agreement to make the change.

If the employee refuses to agree to the new employment terms, some employers, somewhat controversially, opt for a ‘fire and rehire’ process, whereby they terminate the employee’s current contract and rehire them on the new terms.

While this is technically a legitimate measure, ‘hire and rehire’ remains controversial and can result in reputational damage for the employer.

As such, it’s generally advisable to try to come to an agreement with the employee if you wish to prohibit them from taking on a second job. From a talent retention perspective, it may also be worth exploring offering more in the way of compensation or benefits to entice your employees to remain loyal to you solely.

Can you dismiss someone for having a second job?

Whether you can dismiss someone fairly for having a second job depends on whether you have prohibited the employee from doing so within their contract. If they get a second job while their contract doesn’t allow it, they will be in breach and you may have grounds to dismiss them.

Furthermore, if their second job is interfering with their ability to perform their main job well, this may also constitute grounds for dismissal due to poor performance. But you should note that this would be a performance-related dismissal rather than dismissing them for having a second job outright.
If you dismiss your employee for having a second job where it hasn’t been prohibited in their contract, they could bring a claim for unfair dismissal against you.

What about ‘side hustles’?

A side hustle could involve the employee taking on freelancing or making money from a hobby, like arts and crafts or design, rather than having a second employer.

An employee’s ability to have a side hustle may also be stipulated in their contract. Legally, there is no difference between having a ‘side hustle’ and a second job, so you don’t need to add in an extra provision to prohibit an employee from having one.

Side hustles are generally not as alarming for employers as there is less chance for a conflict of interest as they aren’t working for a competing employer or an employer who may wish to take them on full-time.

However, an issue could arise if the employee is working within the same or a similar industry. There could be a risk of their second job interfering with your business or them taking advantage of their employment with you to access clients or particular software you possess. This could lead to a conduct issue as they are openly competing with you, which they are not allowed to do under common law.

A non-compete clause is very standard in employee contracts, but it doesn’t have to be expressly stated for you to take action.

What about working another job while on sick leave?

Some employees may decide to take on a second job while on sick leave to supplement their sick pay. Again, an employee’s ability to do this may be stipulated in their contract.

As an employer, you will need to look at the kind of work they are doing and if it indicates they should not be doing this while on sick leave. For example, someone who is off work with stress could be making money through a side hustle selling art and crafts. Stress wouldn’t stop someone from doing this, but it could hinder someone’s ability to go into a stressful and high-pressure working environment.

On the other hand, if the employee is taking on laborious manual work while off sick due to injury, this would clearly raise concern for the employer, and disciplinary could be taken if it were found the employee is not being truthful.

A key example of when it was found acceptable for an employee to have a second job while on sick leave was Perry v Imperial College Healthcare Trust UKEAT/0473/10/JOJ.

Here, a midwife was signed off sick due to a knee injury as she could not fulfil her role as it required her to be physically active. She took on a desk job with another employer while she was on sick pay. Imperial College dismissed her for fraudulently claiming sick pay and that her contract set out that she had to tell Imperial College if she was working a second job.

However, an appeal tribunal found that she was unfairly dismissed, as her contract only required her to disclose a second job if it meant she was working over the Working Time Regulation’s limit of 48 hours.
This case highlights the importance of the issue of Working Time Regulations. It could be easily misconceived by the employee that they can work over hours while on sick pay since they’re not technically fulfilling their hours. For example, an employee who works 35 hours a week takes on a second job during their sick leave in which they work 20 hours a week, would be going over the Working Time Regulations. An employee’s hours are worked out by taking the average number of hours worked over 17 weeks.

Therefore, it’s extremely important that you maintain open communication with your employees and ensure they are aware of the Working Time Regulations and the other legal implications of working two jobs.

Second job FAQs

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Legal disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.