Employment Act (Chapter 91): Primary legislation governing employment relationships in Singapore. While not directly regulating non-compete clauses, it provides the fundamental framework for employment relationships and is particularly relevant for termination and severance provisions.
Competition Act (Chapter 50B): While primarily focused on business competition, provides important context for reasonable restraint of trade considerations in non-compete agreements.
Common Law Principles - Restraint of Trade: Singapore courts follow common law principles regarding restrictive covenants. Courts will only enforce non-compete clauses that are reasonable in geographic scope, duration, and restricted activities, and necessary to protect legitimate business interests.
Contract Law Requirements: Agreement must comply with Singapore contract law principles including valid consideration, clear and unambiguous terms, and proper contract formation requirements.
Reasonableness Test: Courts will assess whether the restriction is reasonable, whether there is adequate compensation, whether it protects legitimate business interests, and whether it goes beyond what is necessary to protect those interests.
Geographic Scope Requirement: Non-compete restrictions must have reasonable geographic limitations that are justifiable based on the company's business reach and legitimate interests.
Duration Requirement: Time period of the non-compete must be reasonable and justifiable based on industry standards and business protection needs.
Consideration Requirement: Adequate severance payment or other consideration must be provided to make the non-compete clause enforceable under Singapore law.
