Fixed-term employment contracts after employees reach retirement age

In the event that employers ask their employees to retire at the age set out in the employment contract, the employees shall be entitled to severance pay based on the length of employment at the rate prescribed under Section 118 of the Labour Protection Act.

Keywords: Mazars, Thailand, Legal, Employment contracts, Labour Protection Act, Severance pay

12 October 2021

However, if an employer hired a retiring employee to work in the same position and do the same type of work as previously, but under a fixed-term contract, the employer would be able to terminate the contract without providing severance pay to the employee under Section 118, paragraph 3, of the Labour Protection Act.

Based on Supreme Court precedent, fixed-term employment contracts:

  1. last for a certain length of time with a scheduled commencement and completion for an occasional work which is not the ordinary course of business of the employer;
  2. end when a specific task or a specific event is completed; or
  3. are for seasonal work at various times, for up to two years.

Therefore, if the retiring employee is hired to work for another year after his retirement as part of the ordinary course of the employer’s business, the employee is not considered a fixed-term employee. As a result, when the employer terminates  employment, the employee is still entitled to severance pay.

Get in touch

Mazars’ professionals can provide personal consultations on employment contracts and other legal issues. Contact us today.