Retirement and early retirement
Under Thai Labour Protection Act, employers can force their employees to retire at the age set out in work regulations, internal policies, or employment agreements. However, if a retirement age is not stipulated anywhere, the statutory retirement age is 60, and the employee must inform the employer of his intention to retire. The employee’s retirement will become effective 30 days after the date on which the employee informs his employer.
Keywords: Mazars, Thailand, Legal, Labour Protection Act, Severance pay, Retirement
24 February 2021
Under Section 118 of the Labour Protection Act, both compulsory and normal retirement at the statutory retirement age are considered termination of employment by the employer. As a result, employees who retire in such cases have the right to receive severance pay based on the length of employment, at the rates set out below:
Length of employment | Severance pay |
More than 120 days, but less than 1 year | 30 days’ salary/wages |
At least 1 year, but less than 3 years | 90 days’ salary/wages |
At least 3 years, but less than 6 years | 180 days’ salary/wages |
At least 6 years, but less than 10 years | 240 days’ salary/wages |
At least 10 years, but less than 20 years | 300 days’ salary/wages |
20 years or more | 400 days’ salary/wages |
In contrast to compulsory and statutory retirement, early retirement is an offer made by employers for employees to retire voluntarily before reaching compulsory or statutory retirement age.
Based on court precedent, voluntary early retirement which is agreed upon between the employer and employee is not considered termination of employment by the employer. Thus, employees who volunteer to retire early are not entitled to severance pay, but are entitled to any other benefits and incentives set out in early retirement agreements.
References: Legal labour website, Supreme Court case nos. 14043/2558 and 18641 – 18658/2557
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