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Learn more about Employee Confidentiality Agreement in Singapore

An Employee Confidentiality Agreement or non-disclosure agreement allows a business to protect itself from the disclosure of sensitive information about its operations. This sample Employee Confidentiality Agreement must be signed by all new employees at the company. The sample employee confidentiality agreement provided below is aimed to safeguard the company from the risks involved with the employee’s disclosure of strictly private information that, if divulged, would cause serious loss to the organization. The employee agrees to maintain complete confidentiality regarding his activities in the company.

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Table of contents

  1. What is an Employee Confidentiality Agreement?
  2. Is Confidentiality Agreement important in Singapore?
  3. Why use an Employee Confidentiality Agreement?
  4. What is included in the Employee NDA?
  5. What is a confidential information?
  6. What if a confidentiality breach occurs in Singapore?
  7. What to do if employees breach confidentiality?

What is an Employee Confidentiality Agreement?

An employee confidentiality agreement, also known as a non-disclosure agreement or a “NDA,” makes it clear to an Employee that he or she may not disclose company secrets under any circumstances, with the exception of prior written approval. It is advised that, in addition to their Contract, the employee sign the employee confidentiality agreement on their first day so that both parties are legally protected.
Furthermore, the employee confidentiality agreement is in effect until the employee’s termination or, in some cases, for a length of time beyond termination. Furthermore, the agreement remains in effect until the information becomes general knowledge or the employee is freed from the agreement.

Is Confidentiality Agreement important in Singapore?

Employees must be well-versed in the industries for which they work. A confidentiality agreement is essential for safeguarding the company’s financial information, customer data, and Intellectual Property from accidental or intentional disclosure.
Employees recognize that releasing sensitive information is a violation of contract and a criminal offense when they sign a confidentiality agreement form or a simple non disclosure agreement. Without such an agreement, businesses may have difficulty encouraging workers not to discuss personal information or penalizing those who do.
In short, establishing a confidentiality agreement has nothing to lose and a lot to gain.

Why use an Employee Confidentiality Agreement?

When an employer and an employee or worker reach an agreement to settle a workplace issue, they may utilize an NDA to keep either of the following confidential:

1. The specifics of a contract

2. The fact that an agreement was reached

1. Confidentiality of agreement information

When an employer and an employee or worker desire to settle a matter that one or both of them wish to keep private:

➤ The monetary amount agreed upon in a settlement deal
➤ Any or all of the remaining settlement terms
➤ Part or all of the events that led to the settlement agreement

This does not exclude someone from claiming that an agreement has been reached.

2. Keeping an agreement private

This is used when someone want to keep the existence of an agreement private. This might be when only a few persons are aware of the arrangement and do not want others to know. Employee Confidentiality Agreement may also be used for the following reasons:

➤ To keep an organization's information private
➤ When an employer requires extensive safeguards for customer or client identities, intellectual property, or other sensitive or critical business information
➤ To keep specific information about the workplace or firm that the employee knows private
➤ To prevent someone from expressing negative or disparaging remarks, such as regarding the employer or employee, particular persons in the workplace, the service provided by a company, or their customers and clients
➤ To assist in protecting someone if the circumstances of a disagreement or dismissal were generally known

What is included in the Employee NDA?

A confidentiality agreement or non-disclosure agreement does not have to be elaborate or full of legal language. It merely needs to provide the essential facts in a clear and basic manner. While some secrecy agreements will include more material, all will include the following:

Parties The agreement's parties should be named at the beginning of the document. The organization would be the "disclosing party," while the employee would be the "receiver" of sensitive information
Protected information This section should specify exactly what information must be kept confidential. Blanket prohibitions prohibiting employees from sharing "all" or "any" information will not stand up in court
Exclusions List situations in which an employee might divulge "secret material" without infringing the agreement, such as if the information has already been made public. Keep in mind that workers might be legally compelled to provide sensitive information if they are subpoenaed
Term It might be a fixed-term agreement that will ultimately expire, or employers can require employees to keep the information secret indefinitely, i.e. forever. To safeguard the organization, the phrase should be precisely defined
Consequences Because of the potential consequences of a breach, firms should state their intention to seek legal options such as an injunction or a lawsuit
Additional provisions Companies may want to clarify which state's laws will govern any disputes, as well as what items workers must return or dispose of if they depart. Other restrictive covenants may be included by certain companies, such as a non-solicitation contract, which forbids former workers from poaching their old clients or coworkers, or non-compete agreements

What is a confidential information?

In general, confidential information is any information about a company that is not publicly available. Passwords, business-related communications, trade secrets, personal data of persons and third parties, pricing information, and customer information may all be included.
Your employee employment agreements should explicitly specify the categories of company information that are deemed secret (and hence cannot be disclosed).
Employment contracts should also specify when your workers are permitted to reveal such information. Standard exceptions to the responsibility not to divulge sensitive information include the following situations:

1. The law compels such disclosure

2. The disclosure is required in order to file tax returns

3. The information is already publicly available

What if a confidentiality breach occurs in Singapore?

The operational risk is evident and widely understood: if the information disclosed by the employee gives a competitor a competitive advantage over you, you may suffer financial loss as a result of client revenue shifting from you to that competitor.
The legal risk is that if you were negligent in allowing this leak to happen, your company is vicariously liable for your employee’s actions, which could put your company in violation of its contractual confidentiality obligations to third parties.
This could result in a lawsuit for damages against you, or it could put your company in violation of its obligations under the Personal Data Protection Act, resulting in a regulatory action by the Personal Data Protection Commission against your company.

What to do if employees breach confidentiality?

If you discover that an employee has knowingly violated confidentiality, the first step is to acquire evidence in order to:

1. Understand the scope of the breach

2. Take action against the employee in breach

If the violation is substantial, you may want to consider using the clause in your Employment Contract that permits you to Terminate Employment without cause (you should ensure that your employment agreement has such a term).
Unless you work for the government, a violation of confidentially is not a criminal offense, thus there is no purpose in involving the police. However, you may want to Hire a Lawyer to sue the employee for breach of the secrecy agreement in his employment contract.
To do so, the breach must have resulted in genuine financial loss to your company, and you must attempt to estimate how much loss was inflicted. The loss might be in the form of good will, genuine clients, or anything else.
If required, a lawyer might retain the expertise of a forensic Accountant to aid in quantifying this.
In addition to pursuing damages to compensate you for the quantifiable financial loss, the lawyer may be able to get an injunction prohibiting the employee from keeping or sharing any more sensitive information.

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