There's a really critical problem with this story, the junior was not completing their tasks on company time (and they clearly weren't trying to make up for that work on their own time).

Regardless if a company has that policy, it is outlandishly disrespectful to miss (not one, but TWO) deadlines and let down your entire team because of your selfish endeavors. Nobody wants to have a deadweight on their team, and no employer wants to pay someone who cannot meet the bare minimum. That goes for ANY job!

So, whether or not the employer had that policy, the company did the right thing to let him go.

Now in terms of that policy, I don't agree with it.

Personally, I think it's fine to work on side projects under the conditions:

1. It doesn't break NCC (non-compete clause)

2. You're not exploiting confidential information for your own benefit.

3. You complete your company tasks (whether its on the clock or off the clock), and you're present if/when your team needs you.

I think the policy doesn't reflect the current paradigm of our society. People have multiple streams of revenue they're balancing that's beyond the average 9-5. And technology has given us the ability to multitask in ways we've never been able to do before. I think these polices only hurt people who are capable of upholding good work ethic. Because regardless if this policy is enforced, as we've seen here, a person who is disinterested in performing the bare minimum is very easy to pinpoint. You don't need a policy to find that.

(Also, how did they find concrete proof? How careless do you have to be to get caught red-handed on your side projects? This entire story is whack as hell. The junior was either really reckless and didn't care for his job at all, or this whole story can't be true)