What can you do if your employee is ‘income stacking’?

It is becoming increasingly more common for employees to ‘income stack’, meaning they are working multiple jobs alongside their full-time contracted employment. This may be driven by increased taxation and the cost-of-living crisis, with employees needing to earn more money. However, there is also a noticeable increase in some employees taking advantage of the freedom arising from home working, enabling them to work multiple jobs at the same time.

How can employers manage this?

Employers can reasonably have grounds to object in both circumstances. In the former situation, the employee may be working excessive hours, giving rise to health and safety concerns for the employee, which might also lead to a decline in performance and conduct at work. In the latter situation, the employee is not working their contracted hours, and this may amount to a breach of contract and breach of trust and confidence. It is also arguably a form of fraud.

Ultimately, an employee is meant to devote their full time and attention to their work during their working hours. Most modern employment contracts expressly prohibit employees from engaging in additional work outside of their work for the employer, to protect against the health and safety risk for employees, the potential for breach of contract/fraud, and the potential for a decline in performance and conduct. In such circumstances, the employer will be in a strong position to take disciplinary action where the employee engages in other work at any time (paid or unpaid). Where an employee is income stacking, employers often notice this owing to a reduction in performance or conduct issues such as increased absence and lateness.

Even if an employee’s employment contract does not prohibit income stacking, it can still be a breach of their obligations to the employer if it impacts on their work at all. In practice, if an employee is already working full-time, undertaking another role on top of that is unlikely to be beneficial to the employer.

Is there a middle ground?

Some employers may be prepared to afford their employees a degree of flexibility in limited circumstances, still taking a cautious and structured approach to secondary employment, given the clear legal, health and safety, and commercial risks. A pragmatic approach in such circumstances may be for the employer to agree clear parameters around additional work.

For employers, this may mean setting out expectations in writing, such as requiring prior written disclosure of any proposed secondary employment (to include the name of the business, proposed hours of work, and duties to be performed), assessing potential conflicts of interest, and focusing on whether the additional work impacts or may impact performance, availability, or wellbeing. The employer may also want to retain a right to require the employee to terminate the secondary employment in the event of any actual or perceived conflict of interest. Where risks can be managed, outright refusal may not always be necessary.

Employees should seek prior written consent and demonstrate that any additional work will not result in an actual or potential conflict of interest and will not interfere with their contractual duties, working hours, or professional obligations.

Takeaways

An employer is entitled to require an employee to devote their full time and attention to their work and not to undertake other jobs where they are working full-time. However, provided the employee seeks advance written consent, the employee continues to meet their contractual obligations, and risks are properly managed, a balanced and flexible approach may be agreed between the parties. An employee should not assume they can take on another role without first obtaining prior written consent, otherwise they may face disciplinary action.

If you have questions or concerns about employees working multiple jobs, or any other employment issue, please contact Michelle Last.