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Guidelines on non-compete clauses in employment contracts expected in H2 2024: Singapore MOM

Guidelines on non-compete clauses in employment contracts expected in H2 2024: Singapore MOM

The Ministry affirmed that the tripartite partners are committed to ensuring that unreasonable employment contract clauses do not become a norm in the workplace. 

Singapore’s Ministry of Manpower (MOM) has shared that it is working together with the tripartite partners to develop a set of tripartite guidelines to shape norms and give employers more guidance when including certain restrictive clauses in employment contracts. 

These guidelines are expected to be released in the second half of 2024.

This was in response to a parliamentary query this week, on whether the Ministry regulates the inclusion of non-compete clauses in employment contracts, and if the Ministry would consider issuing guidelines to both employers and employees on the incorporation of non-compete clauses in employment contracts.  

MOM noted that those who have been subjected to unreasonable employment clauses may seek assistance from the Tripartite Alliance for Fair and Progressive Practices (TAFEP), or MOM.  

The Ministry affirmed: "The tripartite partners’ position is that employers should only include restraint of trade clauses (also known as non-compete clauses) in their employees’ employment contracts if there is a genuine need for such clauses to protect legitimate business interests. Restraint of trade clauses must be reasonable in terms of scope, geographical area, and duration – they must balance employers’ needs to safeguard their businesses and employees’ ability to earn a living, and should not be used to provide an unfair advantage.

"The Courts have established clear principles on when such clauses are unreasonable, unjustified, and unenforceable."

READ MORE: Workplace Fairness Legislation guide for employers: Real-life case examples of workplace discrimination & how to prepare for legislation

Lead image / 123RF

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