From freelance design to e-commerce stores, “side hustles” are booming — but when do they cross the legal line?
The Side Hustle Surge
In recent years, more South Africans have turned to “side hustles” to supplement income, explore passions, or hedge against job insecurity. Whether it’s running a small online shop, offering consulting services, or creating content for platforms like YouTube, these secondary income streams have become commonplace.
But for both employees and employers, “side hustles” can raise tricky legal questions — especially when it comes to conflict of interest, fiduciary duties, and contractual obligations.
Is It Legal to Have a Side Hustle While Employed?
There is no general prohibition in South African law against holding more than one job or running a business outside of one’s primary employment. However, context matters — particularly where the side hustle:-
- competes with the employer’s business
- is performed during working hours
- uses company resources or confidential information
- breaches an employment contract or company policy.
In such cases, a side hustle may constitute a conflict of interest, or even misconduct or breach of fiduciary duty, potentially justifying disciplinary action.
What Is a Conflict of Interest?
A conflict of interest arises when an employee’s personal interests (for example, their “side hustle”) interfere, or appear to interfere, with their duty to act in the employer’s best interests. This duty is based both in contract and common law.
As the Labour Court explained in Sappi Novoboard (Pty) Ltd v Bolleurs (1998) 19 ILJ 784 (LAC), an employee is obliged to serve their employer “honestly and faithfully” and “not to work against the interests of the employer.”
Employees have a duty to inform their employers of any potential conflict of interest which include “side hustles” that might conflict with the business of their employers. In Bakenrug ta Joostenberg Meat v CCMA 2022 CA8-2020 (LAC) [18 January 2022], the Labour Appeal Court held that an employee’s secret operation of a side business in direct competition with the employer constituted a serious breach of trust, justifying dismissal.
When Does a Side Hustle Cross the Line?
Below are a few key red flags that might legally or contractually tip an innocent “side hustle” into the realm of misconduct:
- Competing with the employer: Direct or indirect competition (e.g. selling similar goods/services) is a classic conflict.
- Using company time or resources: Running your side business on company time or with company tools (e.g. laptops, client lists) can amount to theft or time fraud.
- Failing to disclose: Many employment contracts or policies require written disclosure of external business interests. Failure to do so may breach company policy.
- Damaging the employer’s reputation: Some particular types of “side hustles” (for example, controversial online content-creation) could bring the employer into disrepute, depending on the circumstances.
What Should Employees Do?
- Check your employment contract: Some include clauses prohibiting secondary employment or requiring prior written approval.
- Disclose up front: Proactively disclose any potential conflicts to your employer, ideally in writing.
- Avoid overlap: Don’t use company time, resources, or confidential information for your side hustle.
- Seek legal advice if you are unsure: Especially if your side business is similar to your day job.
What Should Employers Do?
- Update your employment contracts and policies: Include clear clauses on outside work, conflicts of interest, and disclosure obligations.
- Educate managers and employees: Create awareness around the legal risks of “side hustles” and the importance of transparency.
- Handle discipline fairly: If there’s a concern, investigate this properly, and follow due process before taking action.
In Summary
South African employees are increasingly entrepreneurial — but the law still expects loyalty and honesty in the employment relationship. Employers are entitled to protect their interests, but must do so lawfully and with due regard for context. Open communication, updated policies, and practical legal advice are the best tools for avoiding conflict.
Need Help Navigating “Side Hustle” Risks?
At Waldeck Attorneys, we assist both employees and employers in drafting compliant contracts, resolving disputes, and finding practical legal solutions in evolving workplaces. Get in touch with us to protect your rights and your business.