Section 118/1 can be summarized as follows: Under Section 118/1, employers still have the freedom to unilaterally determine and implement their retirement polices, or alternatively, to negotiate and mutually agree on retirement with their employees. Generally, in the case of voluntary resignation, the employee who resigns would not be entitled to severance pay. country is now 60 years-old. The maximum severance pay rate is set at 400 days of the employee’s latest wage rate for an employee who has worked for 20 consecutive years or more. employment period is at least three years but less than six all aspects of retirement. 6) B.E. Employment transfer. As a result, the retiring employees were entitled to statutory severance pay. taking care of your business. The new amendments, among others, introduced a retirement provision in Section 118/1, which prescribes the rights and obligations of the employer and employees in respect to retirement. All Rights Reserved. Even if you can file the taxes on your own, everything is in Thai. Labor reforms in India have been a long-pending demand of foreign investors, a majority of which consider the country's labor and employment laws responsible for limiting investment interest by forcing private employers ... Sign Up for our free News Alerts - All the latest articles on your chosen topics condensed into a free bi-weekly email. Severance pay; Less than 120 days: No severance pay: 120 days - 1 year: Wages for at least 30 days: 1 year - 3 years: Wages for at least 90 days: 3 years – 6 years: Wages for at least 180 days: 6 years – 10 years: Wages for at least 240 days: 10 years – 20 years: Wages for at least 300 days: More than 20 years: Wages for at least 400 days You need to pay taxes even if you don’t have a work visa. Published On - 30 October, 2019. Moreover, employers may also need to securely set aside sufficient internal reserve funds in preparation for employee retirement. Therefore, if retirement policies were not implemented by the employer, this meant that  employees could potentially work for life, unless and until they voluntarily resigned or were terminated. years. If an employee is terminated by his or her employer without any grounds (as provided under Section 119 of the Labour Protection Act B.E. We need this to enable us to match you with other users from the same organisation, it is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. Employers who fail to pay severance pay to retirees shall be subject to a maximum six-month imprisonment or maximum fine of Bt100,000, or both. Special severance pay policies and employment contacts. rules and policies to ensure they are compliant with the new 2541 (1998), which governed relationships between employers and employees in the private sector, and which provided protection for employees, did not mention retirement. TMF Thailand helps companies navigate the country's labour Thai law allows the employee to refuse to move and become entitled to receive severance pay. It is not compulsory, but optional, for those employees who are 60 years of age or more to exercise their right of retirement. Technology, Media, and Telecommunications. Thailand Labour Law – Severance Pay What is Severance Pay? Severance Pay - Severance pay will be paid upon retirement, at the employee’s daily rate of pay, in the amount of … in Thailand in September 2017, there was no law stipulating the The amendment to the Labour Protection Act does not stipulate It is not compulsory, but optional, for those employees who are 60 years of age or more to exercise this right of retirement. These Supreme Court judgments have assumed precedence over retirement issues. New amendments to Thailand’s Labor Protection Act have addressed this issue by introducing a retirement regime for the Thai private sector employees, placing severance obligations on employers, enhancing protection for employees, and creating a more effective framework for enforcement of labour laws. 2560 (2017), the law did not stipulate provisions pertaining to the retirement of employees in the private sector. Prior to the draft amendment, the highest severance pay rate was 300 days’ wage for employees who worked for at least 10 years. Exemption for severance pay not exceeding 300,000 Baht and not exceeding ‘10 months’ salary If an employee is terminated by his or her employer without any grounds (as provided under Section 119 of the Labour Protection Act B.E. 6) B.E. The intention of the employee to retire will become effective 30 days after the date on which the employee informs their employer. If your Thai company has no retirement policy, we can 60 they'd like to continue working. guide to the subject matter. severance pay reserve fund, so they're never caught short. We know that every situation is unique, therefore it is essential to seek a consultation with someone who is specialized in Thai Labor Law to fully underst… With respect to the termination of the employment on the basis of reorganising the T… Extra Severance Pay Rate. The Labor Protection Act of 1998, Section 118, (LPA) requires all employers in Thailand to pay severance to employees who are “terminated” by the employer without legal cause (as described in LPA Section 119). Thai labor law is relatively flexible for employers. Thai Law does not specifically address trials or probationary periods. relatively-new stipulation is low, putting companies at risk of retirement age for private sector employees in the country. severance pay entitlements and help employers to establish a Similar to no. An employee who has worked for less than 120 days can be terminated without receiving severance pay. Several Supreme Court judgments havelong treated retirement – whether stipulated in the employers’ work rules or in employment agreements – to be termination of employment without cause. Shortly, a new severance pay rate will be introduced for employees with 20 or more years of service at the rate of 400 days’ wage. employees and in particular, agree how many years beyond the age of The new law clearly requires an employer to pay severance pay in the following the cases. or until they voluntarily resigned. years. Licensed to do business in Cambodia, Indonesia, Laos, Myanmar, Thailand, and Vietnam. Working for life could be beneficial for some employees, but conversely, this arrangement would be disadvantageous for those employees who wished to end their employment at a certain age. Key revisions include the following: Employees with at least 20 years of service are entitled to 400 days of statutory severance, up from 300 days for employees with at least 10 years' service. regulations and other business requirements through our HR and However, terminations and dismissals are subject to certain rules that are important to respect in order to avoid any subsequent dispute with the employee or for the employer. Retirement Age of Employees Thai Lawyers | May 10, 2013. As Thailand gradually transforms into an ageing society, the potential economic and social burden of retiring workers is one issue that is likely to be on the minds of many employees, employers, and policymakers. Previously, the law was silent on the issue and employers had discretion to set their own retirement policy. Taxes in Thailand. You have spent decades planning for retirement. All Rights Reserved. The benefits are highly valued by employees and the benefit terms are approximately one month of final pay for every year of service - … Also, the legal implications relating to the obligations of employers the rights of retiring employees remained unclear until the Supreme Court handed down several precedent rulings on retirement issues. You have spent decades planning for retirement. In contrast, the previous Labour Protection Act B.E. How to Evaluate a Voluntary Separation Package or Early Retirement Offer. Retirement is deemed a dismissal under Thai labour laws. company they work for. THAILAND – Retirement regime for Thai private sector. © Mondaq® Ltd 1994 - 2020. The Thai Cabinet has endorsed a proposal to amend the Labour Protection Act, setting a statutory retirement age for the first time and entitling retirees to statutory severance pay. 240 days' wages where the ... Retirement … notice), they're entitled to severance pay. 2494 (1951) stipulates that 60 years of age is the retirement age for civil servants, although extensions are permitted under certain conditions. This includes all domestic and international income. previous law mean that the retirement age of any employee in the New Retirement Regime for Private Sector Employees. The Thai Cabinet has endorsed a proposal to amend the Labour Protection Act, setting a statutory retirement age for the first time and entitling retirees to statutory severance pay. Increased from 90 days to 98 days (with 45-day pay) for each female employee. Legally, employers in Thailand must pay a severance to their need to pay severance to their retiring employees. employment period is 10 years or more. Even though Thailand’s labour law does not set the retirement age of employees, the interpretation of the Thai Labour Protection Act B.E. Before Labour Protection Act (No. Retirement is deemed to be termination of employment, and the retiring employees are entitled to severance pay under Section 118. In the case where an employer relocates the place of business in Thailand which affects the normal living of an employee or his/her family, the employer shall notify the employee at least 30 days before the date of relocation. The employee who reaches the age agreed between the employer and employee, or as prescribed by the employer as being eligible for retirement, is entitled to receive the severance pay. ‘ wages ' varies across Labour legislations in India is to be registered or login on.... Retire will become effective 30 days of pay they 're entitled to severance or retirement pay and HR from.. Were not entitled to severance pay under Section 118 formally set out public... Red line in that employers need to pay severance to their retiring employees Act B.E in Thailand employees in employment... 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