There's definitely an opportunity here to make a bunch of money at least pretending to fix this problem. Or maybe capital just decides to bring everyone back into the office.
If there is fraudulent intent it is illegal. The intent is what matters here.
How do you prove the employee wasn’t simply incompetent?
I imagine it would be a problem in the US too, just for other reasons probably. You are essentially giving confidential work info to a third party that has no relationship with your employer.
Not a lawyer, but I don't see a deception charge for "under-performing and getting fired for it (while having 2 jobs)" faring well in courts.
Think about it: if you were performing your work well, despite having 2 jobs, what would the deception be? You promised to deliver work on your own, you deliver it on your own. The other job has no intersection with your other one, they are entirely independent. The only difference between that situation and the same situation but poor performance is literally just your performance. Poor performance doesn't automatically turn that situation into deception.
The law is interpreted by human beings, you know, it's not a 'code is law' situation. Remember that a jury would make the final decision. I can see a good lawyer using an argument along the lines of 'well, you said agreed to work FULL time. If a bucket is already FULL would a reasonable person expect the bucket to be able to carry any more load?' and winning.