In Ontario, employees generally have the legal right to work a second job (moonlighting) to make ends meet. Human Resources cannot simply ban dual employment unless the second job creates a direct conflict of interest, breaches a specific employment contract, or causes severe fatigue that violates occupational health and safety standards.
With the rising cost of living across the province, more people are taking on second jobs just to pay for groceries and housing. Whether you are managing a retail team in Mississauga, an office in Toronto, or a warehouse in Hamilton, you will likely encounter employees who are “moonlighting.” While earning extra income is completely understandable, dual employment can sometimes create massive headaches for Human Resources departments.
When an employee is working 40 hours for you and another 30 hours driving for a ride-share app or working at a local bar, the cracks begin to show. 😴 They might start making costly errors, falling asleep at their desk, or worse, sharing your company’s confidential strategies with a direct competitor. Managing employees with dual employment in Ontario requires a delicate balance between respecting their right to earn a living and protecting your business interests. This guide will walk you through the correct legal steps to handle moonlighting without triggering a wrongful dismissal lawsuit.
The Legal Boundaries of Moonlighting in Ontario
In Canada, you cannot control what your employees do on their own time, provided it does not harm your business. The Employment Standards Act, 2000 (ESA) does not contain a specific section banning second jobs. Therefore, an employer’s right to intervene is strictly governed by the common law, workplace policies, and the exact wording of the employment contract.
| Reason for Intervention | Is it Legally Justified? |
|---|---|
| Direct Conflict of Interest | Yes. Working for a direct competitor or poaching your clients is a fundamental breach of loyalty and often grounds for termination. |
| Health and Safety Risks | Yes. If fatigue makes them dangerous (e.g., operating heavy machinery), you have a duty to intervene under the Occupational Health and Safety Act. |
| General Tiredness / Poor Performance | You must address the performance issue itself, not the second job directly, using progressive discipline. |
| Employer simply dislikes it | No. Banning a second job without a valid business reason can lead to a constructive dismissal claim. |
Step-by-Step Process for Managing Moonlighting in Ontario
If you suspect an employee’s second job is negatively impacting your workplace, you must act strategically. Rushing to fire someone for moonlighting is highly risky. It is strongly recommended that HR departments consult with an employment lawyer from our directory before taking disciplinary action.
Step 1: Review the Employment Contract and Internal Policies
Before you confront the employee, check the paperwork. 📋 Does the employee’s contract contain a valid “Conflict of Interest” clause or a “Non-Competition” clause? Does your employee handbook explicitly require staff to disclose secondary employment? If you do not have these policies in writing, it becomes much harder to discipline the employee for simply having a second job. If your policies are outdated, your law firm should draft new ones immediately.
Step 2: Identify Concrete Performance or Safety Issues
You cannot discipline someone simply because you heard a rumour they work elsewhere. You need hard evidence of how it affects your company. Document specific instances of late arrivals, missed deadlines, visible exhaustion, or customer complaints. If the employee operates machinery or drives a company vehicle in Ontario, extreme fatigue elevates this from a performance issue to a severe health and safety hazard that must be addressed instantly.
Step 3: Conduct a Supportive Meeting (Duty to Inquire)
Sit down with the employee for an open discussion. 🗣 Do not start by aggressively accusing them of moonlighting. Focus purely on the performance drop. In Ontario employment law, employers have a “Duty to Inquire” if an employee’s behaviour suddenly changes, as it might be related to a protected human rights ground (like a family emergency or a medical issue). Ask them: “I have noticed you seem very exhausted lately and your error rate has increased. Is there anything preventing you from focusing on your role?”
Step 4: Implement Progressive Discipline if Necessary
If the employee admits that their second job is the cause, or if the performance issues continue, you must use progressive discipline. Start with a verbal warning, followed by a written warning that explicitly states their performance must improve to an acceptable standard. Make it clear that while you cannot force them to quit their other job, they must meet the demands of this job. If they fail to improve, you may eventually terminate them, usually requiring proper severance pay unless their actions amount to “wilful misconduct.”
How Much Does it Cost to Handle in Ontario?
Handling a complex moonlighting issue can involve several financial considerations for an employer. Expect the following estimated costs in CAD:
- Policy Drafting: Hiring an employment law firm to draft a robust Conflict of Interest and Moonlighting policy typically costs $1,000 to $2,500.
- Legal Consultation: Before terminating a moonlighting employee, a lawyer review generally costs $300 to $600 per hour.
- Severance Costs: If you fire them without “just cause” under the common law, a long-term employee could be owed tens of thousands of dollars in severance pay.
How Long Does the Process Take?
Proper management takes time. ⏱ If there is a direct conflict of interest (like stealing clients), the investigation and termination can happen within a matter of days. However, if the issue is purely performance-based fatigue, a fair progressive discipline process should span 2 to 4 months. Giving the employee time to adjust their schedule or quit their second job proves that you acted reasonably as an employer.
Frequently Asked Questions (FAQ)
Can we put a blanket ban on all second jobs?
Generally, no. A blanket ban on all outside employment is often viewed by Ontario courts as an overreach of employer power. You can only restrict outside work if it creates a conflict of interest, interferes with their primary duties, or damages the company’s reputation.
What if they are using our company laptop for their second job?
This is a serious breach of company policy and “time theft.” If an employee is doing work for another employer while “on the clock” for you, or using your corporate resources, you have strong grounds for severe discipline and potentially a termination for cause.
Do we have to accommodate their schedule at the second job?
No. Your company is their primary employer. You are not legally obligated to rearrange their shifts, approve special vacation time, or lower their workload just so they can comfortably manage their secondary employment.
What if the second job is a business they own themselves?
The same rules apply. Running a side-hustle or small business is legal, as long as it does not compete with your company, steal your clients, or cause their performance during regular working hours to suffer unacceptably.
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