By late 2026, Singapore’s Ministry of Manpower (MOM) is expected to issue the long-awaited Tripartite Guidelines on Restraint of Trade Clauses in Employment Contracts. The guidelines follow years of stakeholder consultation between MOM, the National Trades Union Congress (NTUC), and the Singapore National Employers Federation (SNEF). For employers who routinely include non-compete, non-solicit, and non-dealing provisions in employment contracts, the guidelines will reshape what is enforceable — and what will trigger scrutiny.
This 2026 guide sets out the current common law position, what the tripartite guidelines are expected to address, and the practical steps every employer should be taking now to audit and update employment contracts before the guidelines take effect.
What Is a Restraint of Trade Clause?
A restraint of trade clause is a contractual term that prevents an employee, after termination of employment, from engaging in certain business activities — competing with the former employer (non-compete), soliciting the former employer’s clients (non-solicit), soliciting or hiring the former employer’s employees (non-poach), or dealing with the former employer’s customers (non-dealing). Related clauses include garden leave, confidentiality, and post-termination IP assignment.
Singapore courts have long applied a two-stage test to enforce such clauses:
- Does the clause protect a legitimate proprietary interest of the employer (trade secrets, confidential information, client relationships, workforce stability)?
- Is the clause reasonable in scope — duration, geographic reach, activity scope, and reasonable in the wider public interest?
Both limbs must be satisfied. Courts routinely strike down blanket 12-month, worldwide, all-industry non-competes as unreasonable.
Why the Government Is Intervening
The government’s concern is that many Singapore employers routinely include broad restraint clauses that are almost certainly unenforceable in court, but are commercially chilling because most employees will not litigate to challenge them. The upcoming tripartite guidelines are expected to establish norms — what is acceptable, what is not, and what will trigger unfair-practice enforcement under the coming Workplace Fairness Act and existing Employment Act provisions.
The tripartite working group has publicly indicated the guidelines will address:
- Norms on duration — likely six months for typical roles, longer for genuinely senior/strategic roles
- Norms on geographic scope — Singapore or targeted markets, not global
- Salary-level thresholds — low-wage workers likely to be excluded from restraint clauses altogether
- Legitimate interest tests — what employers must show to justify a restraint
- Consequences of misuse — potential curtailment of work pass privileges for employers who systematically deploy overbroad restraints
Non-Compete vs Non-Solicitation vs Non-Dealing vs Garden Leave
Non-Compete
Prohibits the employee from joining or starting a competing business. Most difficult to enforce; requires clearest proprietary interest and narrowest scope.
Non-Solicitation
Prohibits the employee from actively approaching the former employer’s clients or employees. Generally easier to enforce than non-compete because it is more surgical.
Non-Dealing
Prohibits the employee from dealing with the former employer’s clients even where the client initiates contact. More restrictive than non-solicitation and correspondingly harder to enforce.
Garden Leave
The employee remains on payroll during notice but is not required to attend work — and is contractually prevented from starting a new job. This is a paid restraint and enforceable if reasonably scoped.
What Employers Should Do Now
1. Audit every employment contract
Identify who has restraint clauses, what type, and what duration and scope. Junior and low-wage staff with broad non-competes are the highest priority for review.
2. Assess the legitimate interest for each role
Non-compete clauses that are not tied to a genuine proprietary interest are the ones most likely to fall foul of the coming guidelines. If you cannot articulate why an employee needs a non-compete beyond “we always include one”, remove it.
3. Consider surgical alternatives
Confidentiality obligations, IP assignment, non-solicitation of specific clients, and garden leave are less confrontational tools that address most employer concerns without triggering enforcement risk under the guidelines.
4. Update template contracts before the guidelines drop
Once the guidelines take effect, courts and MOM will assess employer conduct against them. Retrofitting is more difficult than starting with a compliant template.
5. Train HR and managers
Restraint clauses are only useful if enforced consistently. Selective enforcement (chasing only high-value defectors while ignoring others) undermines the legitimacy of the clause. Train HR to apply restraints uniformly and appropriately.
Interaction with Workplace Fairness Act
The Workplace Fairness Act (WFA), which came into force in phases from 2025, prohibits retaliation against employees who raise workplace concerns. Employers who deploy or threaten restraint clauses in a manner that appears retaliatory face separate WFA exposure. Ensure restraint enforcement decisions are documented and defensible against a WFA retaliation claim.
What Happens if the Guidelines Are Breached?
Tripartite Guidelines are not statute — but MOM, NTUC and SNEF collectively signal expected norms. Employers who deploy restraint clauses at odds with the guidelines can face:
- Curtailment of work pass privileges (a common MOM enforcement lever)
- Civil liability if the employee sues for a declaratory judgment that the clause is unenforceable
- Reputational damage and difficulty attracting talent
- Escalation to statute if the guidelines prove insufficient — MOM has flagged this option
FAQ
Can I still have any restraint clause?
Yes. Reasonable, targeted restraint clauses for genuinely senior roles with access to confidential information will remain enforceable. The guidelines are aimed at overbroad, blanket clauses applied to junior staff.
What is a “reasonable” duration?
Case law and expected guidance suggest that six months is a workable norm for most roles, extending to 12 months only where the employee had significant strategic exposure. Two-year non-competes for junior staff are almost never reasonable.
Should I pay for the restraint?
Paid restraint (garden leave, post-employment retainer) is more likely to be enforced than an unpaid restraint of equivalent scope. Courts assess proportionality between what the employer gives and what it takes away.
Do the guidelines apply to independent contractors?
They are targeted at employment relationships. Restraints in genuine independent contractor engagements are governed by common law contract principles. Note that “sham” contractor arrangements will be treated as employment for guideline purposes.
What about existing contracts?
Existing restraint clauses remain enforceable to the extent they were reasonable when signed. However, courts will not enforce clauses that offend the guidelines’ spirit once published. Prudent employers will refresh existing contracts, not just new ones.
Get Ahead of It
Restraint of trade is a topic where the writing is on the wall. The 2026 tripartite guidelines will move Singapore closer to the position that many peer jurisdictions (California, most of Europe) have already adopted — non-competes are the exception, not the default. Employers who audit contracts now, remove overreach, and invest in surgical alternatives will be in a materially better position than those who wait to see what happens.
For hiring-side considerations, see our sister site Singapore Employment Agency. For a broader view of employer obligations, see our library on Singapore Payroll and CPF and Employment Pass frameworks.
— The Editorial Team, Raffles Corporate Services