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