SINGAPORE: In a Facebook post on Wednesday (March 10), Workers’ Party MP Jamus Lim (Sengkang GRC) made a case for making it easier to switch jobs in Singapore, citing “pernicious” non-compete clauses that some mid-level employees are required to sign.
He acknowledged that the practice of switching jobs, while common to young people, is contrary to the experience of those from older generations, many of whom stayed in just one or at most two jobs within their careers.
Assoc Prof Lim used his sister as an example, who has “frequently switched jobs.”
“Part of this has been because her talent has been in great demand. But another big part of it has been a greater comfort level with embracing change, in search of opportunity.”
In Parliament last month, he asked if the Ministry of Manpower keeps track of the prevalence of non-compete clauses in employment contracts for mid-level employees in companies and, if this is the case, whether MOM condones the enforcement of such clauses should a layoff rather than a resignation, occur.
He followed this up by asking about MOM’s efforts to better protect employees from exploitative employment contracts.
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The MP added in his post that switching jobs, or even telling one’s boss about other career options, is “a way to advance one’s career” and “can also have a positive impact on the economy.”
He further explained: “Labor market churn, while uncertain, promotes efficiency by as talent shifts to more productive firms, which are able to pay more. Knowledge sharing across firms also improves productivity.”
However, one disadvantage is that due to job switching, companies may hesitate to invest in their employees, fearing that they may resign more easily and even take the company’s proprietary knowledge or trade secrets when they go.
In these instances, non-compete clauses could be positive.
However, he added that these clauses restrict what workers can do after they leave a company and “can also suppress wages by reducing employee bargaining power.”
Assoc Prof Lim said his sister experienced this early in her career. Knowing she could face expensive legal action gave her much stress.
“Even though most clauses of this nature are unenforceable in Singaporean courts, it nevertheless gets inserted into contracts.
Noncompetes, when applied to middle and lower-level employees, are especially pernicious.
Such employees don’t usually know business-defining trade secrets, nor do they make a critical difference to the bottom line. They also have less resources to ride out a period of transitional unemployment.
And even when they aren’t enforceable, noncompetes have a chilling effect on workers seeking outside opportunities.”
He added that the WP believes “the government should either offer strong guidance or outright ban noncompetes for non-senior employees…
This will go a long way toward not just protecting worker rights, but also improve the overall vitality of our local labor market. It is both equitable and efficient. “ /TISG
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