A client phoned me after hearing two members of staff talking about running a business in the evenings. My client thinks this won’t be in the same industry but he’s a bit worried about it and doesn’t know if he should say anything to the employee. Not being an HR person, I turned to Taxwise for advice.
Having a second role, or a “side hustle”, is becoming increasingly common among employees, particularly with millennials. Second roles are usually for making extra money, in addition to the salary received from the individual’s main role, whilst exploring a passion or talent. Research by GoDaddy has recently found that a fifth of workers are thinking about starting a side hustle over the next two years so your clients may find themselves considering this again in the future.
Whilst your client’s employees may feel that they should keep their second role quiet, it is important for your client to know that they are undertaking additional work as this will affect their duties owed under working time rules. Having an express rule in the employee’s terms, or within the employment handbook, that employees should notify their manager when carrying out additional work will allow your client to manage rest periods and other breaks. We have this in our contracts!
Research has also found that employees do not tell their main employer about their second role because they fear they won’t be supported. Having a supportive employer that understands employees have passions outside of work will create a more engaged, loyal and positive workforce; in turn, increasing productivity and retention in your client’s business.
Your client needs to be aware of the likelihood of their employees setting up a competing business in their own time. Although there is an implied term of fidelity in all employment contracts, your client may wish to include a specific non-competition clause or policy which sets out what their employees should and shouldn’t do in relating to competing activities. Rules around conflicts of interest and the use of confidential information will also be important to ensure their employees are not accessing confidential data for their own purposes. Again we have this in our contracts!
If the employee’s second role is successful, they may find themselves in a position where they can leave their main role and takes this up on a full-time basis. In these situations, your client should ensure they have well-drafted restrictive covenants in place which will protect their business. Non-solicitation and non-poaching clauses will be important where the leaving employee has built up good relationships with colleagues and clients of your business. Where any action is taken that breaches these restrictions, your client can challenge this.