Secondary Employment in Australia: Legal Implications for Employers

Flexible work and side hustles are now part of the landscape. More Australians hold a second job, and many employers are asking what “secondary employment” means for their business and what legal levers they have. Handled well, secondary employment can coexist with performance, safety and confidentiality. Handled poorly, it can create fatigue risks, conflicts and IP leakage. Here’s how to manage it lawfully and fairly.

What is secondary employment?

Secondary employment means an employee has another paid role alongside their job with you. It might be weekend hospitality shifts, freelance design work, a micro-business, or in rarer cases another full-time role. Employees seek second jobs for many reasons - income, skills, passion projects. Your task is to balance legitimate business interests (confidentiality, performance, safety) with a practical, lawful approach.

Is secondary employment illegal?

There’s no blanket law banning second jobs. Instead, several legal frameworks shape what you can require.

1. Employment contracts and policies

Conflict of interest, secondary employment or exclusivity clauses commonly require disclosure and prior approval for outside work that conflicts (or could reasonably be seen to conflict) with your interests or that would interfere with performance.
Confidentiality and IP clauses prohibit use or disclosure of confidential information and clarify ownership of work product.
Restraints during or post-employment are enforceable only if reasonable to protect legitimate interests such as client connections or confidential information. Over-broad restraints are at risk. In NSW, courts may read down a restraint to what is reasonable.

2. Work health and safety (WHS)

You must manage foreseeable safety risks, including fatigue where you know (or ought to know) an employee is working elsewhere. This doesn’t mean policing their other job, but you should act where performance or safety issues arise.

3. Fair Work Act, NES and awards

The NES cap of 38 hours plus reasonable additional hours applies per employment. It does not add up hours across separate employers. Awards govern your own employment relationship and generally don’t regulate external hours.
If you use or negotiate an enterprise agreement, the Better Off Overall Test (BOOT) applies only at approval - it’s not a general rule for second jobs.

Why employers should care

Secondary employment can present real risks: performance or reliability issues, safety concerns, conflicts or competition, confidentiality breaches, and misuse of resources. Balanced against this, side gigs can build skills and engagement. The aim is proportionate controls and a culture of disclosure.

Can you restrict secondary employment?

You can in defined circumstances, where the restriction protects a legitimate business interest and is reasonable.

Reasonable to restrict

• Direct competition or genuine conflict with your business

• Performance or safety impacts such as fatigue or missed KPIs

• Misuse of confidential information or client poaching

Risky to restrict

• Blanket bans without justification

• Unrelated outside work that doesn’t affect performance, safety or confidentiality

When refusing or withdrawing approval, record the specific risk and the contract or policy basis you rely on.

Managing second jobs in practice

1. Set a clear policy
   Require disclosure before secondary work is accepted, set approval criteria (no conflict, no use of resources, no performance impact) and reserve a right to review or withdraw approval if risk emerges.

2. Tighten contracts
   Include conflict, confidentiality, IP and performance clauses, and use limited exclusivity only where justified. Draft restraints narrowly in scope, duration and geography.

3. Assess WHS and fatigue
   Train managers to recognise fatigue indicators. If you know an employee is working long hours elsewhere, carry out a risk assessment and adjust rosters or conditions if needed.

4. Be consistent, not blanket
   Apply criteria evenly, document decisions and reasons, and engage collaboratively with staff.

5. Escalate carefully
   If there’s non-disclosure, conflict or confidentiality breach, follow a fair process and seek legal advice before disciplinary action or termination.

Special scenarios

Contractors are generally free to take other work, but you can protect interests through confidentiality, IP, non-solicit and reasonable restraint clauses. For senior or security-sensitive roles, tighter limits can be justified. In remote or flexible arrangements, clarify working hours, availability and that no outside work occurs during paid time.

Documents you should have in place

• Employment contract with clear conflict, confidentiality, IP and performance provisions

• Secondary Employment or Conflict of Interest Policy

• Workplace policy or staff handbook consolidating rules

• Confidentiality or non-disclosure agreement

• Performance management policy

• Reasonable restraint or non-solicitation clauses for relevant roles

Common pitfalls

• Over-broad restraints or blanket bans

• Assuming you can police combined hours instead of managing WHS fatigue where known

• Vague policies without clear approval procedures

• Poor documentation of disclosures and decisions

Key takeaways

Secondary employment is not unlawful, but employers can set reasonable conditions to protect performance, safety, confidentiality and client relationships.

NES and awards apply per job; they don’t aggregate hours across employers, but WHS duties require action on known fatigue risks. The BOOT applies only to enterprise agreements, not general employment. Use targeted clauses and a clear policy instead of blanket bans, and apply them consistently.

If you’d like a consultation on managing secondary employment issues in your business or updating your employment policies and contracts, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.