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Can you be fired for having a second job?

Many employees work second jobs, what if an employer isn't happy about it?
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Can you be fired for having a second job?

Can you be fired for having a second job?

29 April 2021

Many employees work second jobs to help make ends meet. What if an employer isn't happy about it?

Most issues around secondary employment relate to:

  • working a second job with the same employer
  • working a second job with a different employer, or
  • working with another employer during a period of paid annual leave or long service leave.

The reasons an employer wants to prohibit an employee working a second job usually relate to concerns about workplace health and safety (fatigue) or conflict of interest (fiduciary) issues.

So does an employer have a right to prevent an employee from performing work with another employer?


Overview

As a general rule, an employer cannot have any control over an employee’s activities outside of work hours unless those activities in some way damage the employer’s business.

An employer should have a policy regarding secondary employment and what obligations rest on an employee to disclose it.


Workplace health and safety

A common concern about working a second job is whether the employee is attending work fatigued.

Workplace health and safety laws generally impose an obligation on an employer to ensure the health and safety of their employees while the same law imposes an obligation on an employee to ensure they are fit to attend work.

When an employer is aware an employee has another job, the employer is obligated to consult with the employee about the other work and any fatigue risks it might pose.

If an employee does become fatigued, alternative options to ensure their safety at work could include sending the employee home to sleep, negotiating roster changes so that work is performed at a different time of day, or mutually agreeing to vary the employee’s work hours.

Safe Work Australia has a guide on managing the risk of fatigue at work.


Conflict of interest

It is generally implied at common law that a contract of employment imposes obligations on both employers and employees. The main employee duties under a contract of employment are obedience, fidelity and care and skill.

The duty of fidelity (or fiduciary duty) is constituted by several obligations imposed on employees while they are in the employment of their employer. Essentially, they must serve their employer in good faith, they must act to protect their employer’s interests, they must not make secret profits at his or her employer’s expense, and they must not disclose confidential information of their employer nor use his or her employer’s time for their own self-serving purposes.

What this means is that in accepting a second job with another employer, the employee will not engage in any activities which may damage the interests of the first employer. Performing work for another employer does not necessarily contravene this implied fiduciary duty.


Second job with same employer

It is possible to have two separate contracts of employment between the same parties in certain circumstances.

Where an employee is employed outside their ordinary hours and that work is covered by a different award from that which covers their normal employment, it is necessary to ascertain whether an employee was instructed by the employer to perform this after-hours work as overtime or whether such work was undertaken voluntarily by the employee as a new and separate engagement. In the former case, the employee would be entitled to overtime rates in accordance with the provisions of the applicable award.

Where after-hours work is entered into by the employee voluntarily, such arrangement is regarded as a new engagement. The employee would be entitled to payment at the ordinary rate under the award covering such work, unless the award required payment of the overtime rate by reason of the time at which the work is performed, irrespective of whether the total hours worked by the employee exceed the total ordinary hours (38) for the week. See QIEU v Morton Bay College [2002] QIRComm 175; QGIG 329 (25 October 2002).


Absent on paid leave

Annual leave
The National Employment Standards do not specifically prohibit an employee from working for another employer during an absence on paid annual leave. Generally, an employee is free to work for another employer while on a period of annual leave, provided the work performed with the second employer does not conflict in any way with the business interests of the first employer.

Where the duties being performed by an employee with a second employer differ from their duties performed with the first employer, there would appear to be less of a conflict of interest than in a circumstance where an employee is performing similar or identical work with both employers.

A common example is an employee employed as a clerk with the first employer who works (say) in the hospitality industry, for example, a club or a restaurant, during a period of paid leave. It would appear that this circumstance would not necessarily give rise to a conflict of interest between the two jobs.

Long service leave
The right of an employee to perform work for another employer when absent on a period of paid long service leave will normally depend on the relevant state or territory long service leave legislation. Long service leave legislation in Victoria, Western Australia, South Australia and Northern Territory prohibit an employee from engaging in any other employment during a period of paid long service leave.

Legislation in New South Wales, Queensland and Australian Capital Territory is silent on this point, meaning the legislation does not prevent an employee from working for another employer during a period of  long service leave.


Unfair dismissal

In a matter before the Fair Work Commission, it determined that an employee was unfairly dismissed when his employer discovered he had performed work for a client while absent on annual leave. It was deemed there was no conflict of interest as there was no evidence that the work performed by the employee for the client was work which could have been performed by the primary employer.

The commission stated that “undertaking secondary employment which does not encroach on the primary employer’s field of business does not contravene the implied contractual term of fidelity and good faith. Nor does the implied term impose any duty upon the employee to disclose secondary employment of this nature.”

See B v Rex Australia Limited [2015] FWC 884 (16 February 2015)


Company policy

In attempting to restrict an employee taking a second job, an employer should have a secondary employment policy or code of conduct which sets out the disclosure requirements when an employee intends to seek secondary employment.

Such details could also be included as a term of an employee’s contract of employment. It is important that a company policy is well-communicated to the workforce and the policy is reviewed, preferably at least every two years.

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