Guidelines on non-compete clauses being finalised; out second half of 2024: Tan See Leng

Guidelines on non-compete clauses being finalised; out second half of 2024: Tan See Leng

SINGAPORE: The&nbsp, Manpower Minister Tan See Leng announced on Tuesday ( Feb 6),” Guildrains on the use of a job requirement that restricts an employee’s employment with another company are being finalized and are anticipated to be made known in the second half of 2024.”

The non-compete principle, also known as restriction of trade clauses, has just raised concerns with high-profile examples from two well-known tech firms.

After the retrenchment exercise in early January, past Lazada people questioned the CNA’s 12-month non-compete clause, which covered a sizable list of technical, financial, and logistics firms. &nbsp,

Shopee’s demands for injunctions against a former worker who left and joined ByteDance were denied by the courts next year. He had signed a Restrictive Covenants Agreement when he first joined Shopee, which included an Employee Confidentiality Agreement as well as an individual call and non-competition section.

In response to some political inquiries regarding Lazada’s new downsizing training, Dr. Tan said,” We understand that overly stringent restraint of trade clauses you disadvantage overtrenched employees and create difficulties in finding employment.” &nbsp,

Similar to how other sets of rules are now applied, Dr. Tan added that the Ministry of Manpower ( MOM) and its trilateral partners are creating rules that will&nbsp, teach companies, and shape standards. &nbsp,

According to Dr. Tan, the civic authorities have” clear established rules” regarding whether such provisions are reasonable and unfair or acceptable and can be upheld in court. &nbsp,

He continued,” The courts will determine whether there is a “genuine business need” and whether the company’s scope of the clause was reasonable given its industry, geographic location, and length. &nbsp,

According to Dr. Tan, they will also strike a balance between an employer’s obligation to protect their operations and the workers ‘ means of support, noting that the clause should n’t be used to give companies unfair advantages. &nbsp,

Employees may seek assistance from their unions, TAFEP ( Tripartite Alliance for Fair &amp, Progressive Employment Practices ), or MOM if they feel that their trade restrictions are unreasonable or unjustified.


Dr. Tan also responded to Associate Professor Jamus Lim ( WP-Sengkang ), who enquired as to whether MOM approves of businesses forfeiting unvested restricted stock units ( RS Us ) even in the event of a retrenchment rather than resignation.

According to Dr. Tan, simply non-workmen or those who are not primarily engaged in manual labor may receive income via investment options, including RS Us. &nbsp,

He continued,” These are best discussed as part of employment contract negotiations between the employer and employee.” &nbsp,

Employment agreements may make it clear what circumstances under which unvested Vehicles are forfeited. He continued,” These Vehicles are typically given to employees in older jobs, so they would be able to negotiate the words with their organisations,” adding that MOM does not keep track of the frequency of issuing them. &nbsp,

People with problems over RSUs you submit a claim with the Tripartite Alliance for Dispute Management for counseling, related to non-compete phrases. According to the Manpower Minister, if this does n’t work, the claim may be brought before the Employment Claims Tribunals for adjudication. &nbsp,

Employees will need to file a legal claim at the courts for claims that go beyond the declare limits of the tribunals, he continued. &nbsp,

Assoc Prof. Lim questioned whether MOM would consider outright banning non-compete clauses, particularly for lower- to mid-level employees, in a secondary question. &nbsp,

He continued, noting that many of these people also lack the means to file a lawsuit,” My concern has to do with the risk of this kind of inclusion of such prefab language for mid-level and lower level jobs because of the chilling effect it can have for employment in general.” &nbsp,

Dr. Tan retorted that MOM wo n’t be enacting any additional regulations.