Is it legitimate and enforceable for an employer to ban an employee from having a second job? Obviously it is entirely appropriate in certain circumstances for an employer and an employee to make a genuine agreement to the effect that the employee will devote all of his or her working energies for the benefit of the employer and will not work for another employer without the first employer’s consent. Indeed this is very common, and in most circumstances no reasonable person would assert that such an agreement should be voidable without more. Such an agreement would be unhesitatingly upheld by a court.
Unlike a restraint of trade there is no implicit presumption that Australian common law or equity would apply to strike the agreement down.
However what is the situation where the bargaining power of the employer and the employee is far from equal and there is no patent benefit to either party in such an arrangement? For example what is inherently wrong with a part time café worker having two part time jobs in the same industry?
In 2016 the Fair Work Commission upheld that the dismissal of a printer by WA Newspapers Ltd in an unfair dismissal case where the employee had a second job as an ad hoc Uber driver.
The company’s policies provided that
It is an express term of your contract of employment that you may not engage in other work without the company’s written consent, provided such permission shall not be unreasonably withheld. In the case of permission being withheld, reasons will be provided in writing.”
and its Code of Conduct provided that
“2.5 Employees may not accept an external appointment, such as a board appointment (other than the board of a non trading family company), working for another organisation, or conducting a business without the written permission of the Chief Executive Officer, or in the case of the Chief Executive officer, the Chairman.”
In addition the company had chosen to dismiss the employee on the basis that its trust and confidence in the employee had abated with Comssioner Williams putting it this way
“The letter (of dismissal) referred to previous discussions with him regarding other work with Uber. The letter referred to his lack of transparency and cooperation throughout the investigation which had undermined WAN’s trust and confidence in him as an employee. The letter stated he had still not submitted a written request for permission to perform secondary work and had not provided a satisfactory explanation as to his work with Uber. The letter said he had conducted himself in an obstructive manner which had cause the relationship to become untenable……………….For at least six months Mr Jacob was undertaking other work outside his employment with the respondent, contrary to the requirements in his contract to request permission to work in a second job before undertaking any such work and contrary to the Employee Code of Conduct. This conduct is a valid reason for his dismissal.
During the investigation into this issue Mr Jacob deliberately lied to his employer on a number of occasions. Mr Jacob was not transparent or honest in response to his employer’s reasonable enquiries and was at times deliberately misleading. This conduct is a valid reason for his dismissal.
In response to reasonable requests to provide records relevant to his employer’s concerns Mr Jacob obstructed this enquiry by unreasonably refusing to provide those records of his driving history that were readily available to him. This conduct is a valid reason for his dismissal.” Jacob v West Australian Newspapers Limited (2016) FWC 5382 delivered 8 August 2016 per Williams C
Accordingly, that case does not provide a legal authority to the effect that an employer can or cannot prohibit an employee from holding more than on job.