In this series, business correspondent Timothy Goh offers practical answers to candid questions on navigating workplace challenges and getting ahead in your career. Get more tips by signing up to The Straits Times’ Headstart newsletter.
Q: Can employers stop former employees from joining competitors after making them redundant?
In Singapore, non-compete clauses are generally unenforceable unless the employer can reasonably show they protect legitimate proprietary interests and are reasonable in scope, geography and duration.
Non-compete clauses are not likely to be enforceable against employees who do not have access to trade secrets or highly confidential business information, said National Trades Union Congress assistant secretary-general Patrick Tay.
“This is because, where there are no legitimate interests being protected, such clauses would be considered an unreasonable restraint on an employee’s ability to earn a living,” he added.
Tay noted that employees should not be asked to sign additional non-compete clauses during “offboarding”, such as during a retrenchment exercise.
If this happens, employees should refrain from signing immediately and review the terms carefully.
“Union members can seek union advice before signing, and, where possible, also seek legal advice, as these agreements will become binding once signed,” said Tay.
He added that employers should give employees sufficient time to consider such documents and should not pressure them through unreasonable deadlines or other forms of coercion.
Tay also said employees should not feel compelled to sign documents without fully understanding their implications.
“Employers are also not entitled to withhold salary or other sums owed under the Employment Act in order to compel employees to sign such documents,” he added.
Tay said employees can contest the validity or enforceability of a non-compete clause under Singapore law. If the dispute escalates, they should appoint a lawyer to defend their position.
He also highlighted that NTUC runs legal clinics that can offer NTUC members who have been served letters of demand basic legal advice on such matters.
Members can also tap NTUC’s legal assistance panel for access to lawyers to further advise or represent them where needed.
“While there is a need to protect confidential information, prevent the use of proprietary information, and prevent the solicitation of clients or staff, these should be dealt with through targeted and reasonable measures, rather than a blanket restriction that creates uncertainty and anxiety for employees seeking new employment opportunities and impacts their livelihoods,” Tay said.
Malcolm Chen, a certified senior professional at the Institute for Human Resource Professionals, said that from an employee’s perspective, a non-compete clause does not necessarily prevent them from continuing to work in their profession or industry.
“Each case will depend on the terms of the contract and the circumstances involved.
“Where there is uncertainty, it would be prudent to seek legal advice to better understand one’s rights, obligations and available options before accepting a new role,” he said.
