Side hustles – revisited

James Howarth, Associate

In recent years, incidents of employees engaging in secondary employment, or “side hustles,” has risen, driven by ongoing financial pressures and the need for additional income, whilst such arrangements are also being accommodated by a more flexible employment market.

Claire Hollins in the team wrote about this trend in 2023 – Side hustles – what employers need to consider | Kuits Solicitors. This trend has not abated since 2023, with the team receiving more calls from businesses regarding this issue. It can be a legitimate concern for employers, not just in terms of potential lost productivity from employees, but also lost opportunities, with employees with secondary employment often syphoning away work from employers.

Let’s be clear there is no automatic rule preventing employees from having secondary employment. This is so long as the secondary employment does not breach an employee’s primary employment contract and is conducted outside of their contractual working hours. Employers therefore should be aware of the potential risks when an employee undertakes secondary employment and take proactive measures to mitigate these risks.

If an employer suspects an employee has engaged in secondary employment, they should, as a minimum:

1. Review the employee’s employment contract to assess whether there are any clauses that require the employee to seek permission before taking on secondary employment. If so, this may allow an employer to assess the potential impact on their business and address any concerns related to competitive activities or confidentiality breaches in accordance with the employment contract.
2. Evaluate an employee’s secondary employment to assess risks related to competition and confidentiality. Employees owe implied duties of confidentiality to employers, and breaches can lead to disciplinary action or dismissal without the need to rely on an employment contract (although express terms are always better).
3. Assess the nature of an employee’s secondary employment to consider whether it poses reputational risks to the employer. If so, it may allow for disciplinary action, although employers should carefully assess the facts and potential business links before taking any disciplinary action.
4. Consider the impact of an employee’s secondary employment, as any time spent working, when added to their primary employment may be in breach of the Working Time Regulations’ 48 hours limit, or could just generally be a health and safety risk due to the significant number of hours worked. Long hours may prevent the employee from safely working their secondary employment.
5. If, after taking these steps, an employer is satisfied that the employee can legitimately undertake their secondary employment, it may still make sense to require them to enter into some form of confidentiality agreement to protect the business moving forward.

In addition to reactive steps once an incident has occurred, there are preventative steps that employers can and should take now to protect their business.

1. Review and Update Contracts: Ensure employment contracts include provisions for seeking permission for secondary employment and include appropriate provisions around confidentiality, competitive restrictions and outside interests.
2. Conduct Risk Assessments: Regularly assess the potential impact of secondary employment on business operations and be observant of the wider market.
3. Engage in Open Communication: Foster a culture of transparency where employees feel comfortable discussing their secondary employment plans. Ensure that policies are in place that dictate what employees can and cannot do, and allow employees to engage in legitimate, non-competitive secondary employment.

For further advice on managing employees with secondary jobs or amending employment contracts, please contact James Howarth at 0161 912 6146 or james.howarth@kuits.com.