Howard Levitt: Side gigs can have potentially dire ramifications for employees and employers alike

In some jobs, by their status, pay and nature, second jobs are never acceptable

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By Howard Levitt and Stephen Gillman

For as long as we can remember, the notion of a full-time employee also having a part-time or “weekend” job was commonplace. This was particularly true among younger workers. However, we have more recently noticed employees increasingly engaging in a new trend, that being the so-called side job.

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The precise definition of a side job varies depending on whom you ask. But to most, it involves some type of entrepreneurial endeavour as opposed to a traditional part-time or second job. It comes in all varieties and includes anything from outside consultancy work to running a neighbourhood dog-walking service.

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Regardless of the specific activity, its rise appears to be in full swing, as a recent nationwide survey indicates that 28 per cent of Canadian workers are now taking on side jobs. While this figure is staggering, it is not altogether surprising given the arrival of the gig economy and the requirement of many to supplement their income in the face of an ever-rising cost of living.

The enterprising spirit may be commendable, but traditional employers have cause for concern since an employee’s second job will impact their overall productivity on their primary job. Indeed, there is a tenuous balance to be struck between an employee’s outside aspirations and the legal duty owed to their primary employer.

A recent court case in British Columbia has provided some direction. In Dove vs. Destiny Media Technologies Inc., the court considered a scenario where the overall performance of a long-service managerial employee began to wane as a result of her moonlighting.

The employer operated within the technology industry, and the employee’s past work experience was as a chocolatier and restaurant worker. A year prior to the employee’s eventual dismissal, her friend purchased a café and general store. Shortly thereafter, the employee began devoting three to four hours each week to its operation, which she claimed was done as a volunteer.

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Six months after the employee began “volunteering,” she began to miss deadlines, was regularly absent from work without prior approval and generally neglected her core duties. Prior to this, she possessed an unblemished record. As a result, the employer terminated her, alleging just cause.

The court concluded that the employer indeed established just cause for immediate dismissal. As such, the dismissed employee was refused any compensation and ordered to pay the employer’s legal bill.

Remarkably, the court made its finding despite the absence of any formal warnings or alternate methods of progressive discipline. It did so, because, in the circumstances, it should have been obvious to the employee that she would be terminated for her misconduct, and because she failed to co-operate with the investigation.

Our courts have historically recognized that employees have a duty to provide full-time service to their employer unless otherwise agreed. However, this case underscores the importance of an employee’s commitment to their employer and highlights the potential consequences for employees who engage in side jobs at the expense of their productivity and without first obtaining proper authorization.

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For employers, it is prudent to ensure a policy is in place that addresses if and when an employee is permitted to have any outside business ventures and what their limits are. But if no such policy exists and there exists an immediate concern, employees still cannot do as they please, and it is recommended that the employer seek out legal advice before taking further corrective action.

For employees, if you plan to engage in a side job on a recurring basis for any significant period of time, you should first seek authorization from management, or perhaps ask about further opportunities with your primary employer before looking elsewhere. In some jobs, by their status, pay and nature, second jobs are never acceptable. Indeed, most employment contracts with managers and executives stipulate that the job is on a full-time basis.

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Employers should also remember that permitting an employee to participate in an outside venture is not a permanent decision and can be reconsidered at a later time. This would especially be the case if the employee’s side job starts to interfere with their workplace performance. However, you should stipulate in your consent that it can be revisited and that the employee may be asked to discontinue it on a stipulated notice.

Howard Levitt is senior partner of Levitt Sheikh, employment and labour lawyers with offices in Toronto and Hamilton. He practices employment law in eight provinces. He is the author of six books including the Law of Dismissal in Canada. Stephen Gillman is a partner at Levitt Sheikh.

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