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Severance Pay Non Compete Agreement Template for Singapore

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Key Requirements PROMPT example:

Severance Pay Non Compete Agreement

"I need a Severance Pay Non Compete Agreement for a departing Senior Sales Director in Singapore, who will receive 6 months' salary as severance and should be restricted from working with competitors in Southeast Asia for 12 months from March 2025."

Document background
The Severance Pay Non Compete Agreement is utilized when an employer in Singapore wishes to protect their business interests while providing severance benefits to a departing employee. This document is particularly relevant in situations involving senior employees, those with access to confidential information, or employees with significant client relationships. The agreement must balance the employer's need for protection with the employee's right to work, adhering to Singapore's legal framework on restraint of trade. It typically includes detailed provisions on payment terms, restricted activities, geographical limitations, and duration of restrictions.
Suggested Sections

1. Parties: Identification of employer and employee with full legal names and addresses

2. Background: Context of the agreement, including reference to termination of employment

3. Definitions: Key terms including 'Restricted Period', 'Restricted Area', 'Competitive Business', 'Confidential Information'

4. Severance Payment: Details of severance amount, payment schedule, and conditions

5. Non-Compete Obligations: Specific restrictions on competitive activities, duration, and geographical scope

6. Confidentiality Obligations: Ongoing obligations regarding confidential information

7. Governing Law: Singapore law clause and jurisdiction

Optional Sections

1. Garden Leave: Terms of garden leave during notice period, including duration and conditions

2. Non-Solicitation: Restrictions on soliciting employees, customers, or suppliers of the company

3. Return of Company Property: Process and timeline for returning company assets and confidential documents

4. Tax Provisions: Specific provisions regarding tax treatment of severance payment and obligations

Suggested Schedules

1. Schedule 1 - Severance Payment Calculation: Detailed breakdown of severance payment computation and payment schedule

2. Schedule 2 - Restricted Territory: Detailed map or list of geographical areas covered by non-compete restrictions

3. Schedule 3 - Restricted Clients: List of specific clients covered by non-solicitation provisions

4. Appendix A - Acknowledgment Form: Employee acknowledgment of receiving severance and understanding restrictions

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions




























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Industries

Employment Act (Chapter 91): Primary legislation governing employment relationships in Singapore. Sets out minimum standards for employment terms and conditions, including basic employment rights and obligations.

Competition Act (Chapter 50B): While primarily focused on business competition, provides relevant principles when considering reasonable restrictions in non-compete agreements.

Common Law Doctrine of Restraint of Trade: Legal principle requiring non-compete clauses to be reasonable and protecting legitimate business interests. Must be reasonable in geographic scope, duration, and scope of restricted activities.

Man Financial v Wong Bark Chuan David [2008]: Key Singapore court precedent regarding the enforceability of non-compete clauses and reasonableness requirements.

Tan Kok Yong Steve v Itochu Singapore Pte Ltd [2018]: Significant court case in Singapore providing guidance on the interpretation and enforcement of non-compete agreements.

Constitutional Rights - Article 13: Singapore constitutional provision regarding rights to property, which must be considered in the context of restrictive covenants.

Constitutional Rights - Article 14: Singapore constitutional provision on freedom of speech, assembly and association, relevant for considering the scope of restrictions.

Severance Pay Requirements: Must meet minimum statutory requirements, be clearly defined and quantifiable, with consideration for tax implications.

Enforceability Criteria: Non-compete clauses must protect legitimate business interests and cannot be wider than necessary to protect the employer's interests.

Additional Agreement Components: Must include clear definitions of confidential information, specific industry restrictions, notice periods, garden leave provisions, and dispute resolution mechanisms.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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