Latest Developments on Retirement Under the Amended Labour Protection Act
We provided an update earlier on the Thai Cabinet's endorsement of the proposal to amend the Labour Protection Act B.E. 2541 (1998), particularly on the issues with regards to the revocation of the obligation to submit work regulations to the labour official upon employing 10 or more employees, and the retirement [refer to link]. There have now been significant changes to the latest draft of the Labour Protection Act in these respects.
According to most recent version of the draft amended Labour Protection Act, the mandatory retirement age, as previous found in the earlier draft, has been removed from current section 118/1. The current draft of section 118/1, which deals specifically with the retirement issue, can be summarized as follows:
- In case the employee retires once he/she reaches the retirement age set by the employer or agreed upon between the employer and the employee, it shall be deemed as termination of employment.
- Where retirement age is not set by the employer or agreed upon by both employer and employee, or the agreed retirement age is higher than 60 years old, the employee shall have the right to retire by expressing his/her intention to the employer that he/she wishes to retire. The retirement will then be effective after the 30-days period from the date the intention to retire was expressed and severance pay is required to be paid to the retired employee at the rate specified by the law.
The above issues deviated from the previous draft. Interestingly, in the case where retirement age is not set by the employer or agreed by both employer and employee or the agreed retirement age is higher than 60 years old, the new draft is silent on whether such a case is deemed as termination of employment. The new draft simply states that severance is legally required to be paid in such case. Subsequent court precedents would be important in shedding lights on this ambiguity.
On the issue of work regulations submission, there has not been any change to the previous draft, and as expected, the amended draft no longer imposes upon an employer the obligation to submit the work regulations to the official.
This latest draft is still subject to further changes before being submitted for approval by the National Legislative Assembly, and ultimately becoming effective after its publication in the Royal Gazette. However, it is expected that any further changes from now will be minor. We will keep you informed on the development of this matter.