My university contracts have always had that stipulation (either, no outside work, or you need to 'ask' if you can). As a guess, theirs said no!

OTOH, really strange that the PSB got involved, with regard to an out of contract work. Working without the right visa, etc I would understand, but working in a place they shouldn't... yeah, sounds like the university got wind of it, and it was they who informed the PSB. I'd also hazard a guess that those 2 teachers may have not been putting in their all at the uni (or, shoving the better money in the faces of the uni admin). Otherwise, I would have expected the uni to just have a quiet chat with them...

Still, strange! I didn't realise Baotou had such an abundance of FT's that they can afford to kick some out! (unless, I suppose, some local English teachers are needing a job....)