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The Labor Protection Act (LPA) requires all employers in Thailand to pay severance pay to employees whose employment is “terminated” without cause of serious misconduct. To such extent, retirement is also considered as a cause of employment termination and the retiring employees are therefore legally entitled to severance pay when they reach the age of retirement.
Employees have the ability to retire at the age of 60 unless the employer’s Work Rules provide a lower retirement age. If the employer’s retirement policy sets the retirement age at more than 60 or the retirement age is not set in the policy, employees may still retire at the age of 60. Employees shall notify their employer upon their intention to retire and such retirement shall be effective 30 days following the notification date.
According to the LPA, retiring at 60 is not mandatory and remains optional for the employee to exercise its right to retire. However, the employee shall be entitled to receive severance pay once he/she reaches 60 even if the latter wishes to continue working for its employer.
Upon retirement, employees are entitled to severance pay as follows:
| Uninterrupted Employment Period | Severance Pay |
| More than 120 days but less than 1 year | 30 days of the most recent pay rate |
| 1 year or more but less than 3 years | 90 days of the most recent pay rate |
| 3 years or more but less than 6 years | 180 days of the most recent pay rate |
| 6 years or more but less than 10 years | 240 days of the most recent pay rate |
| 10 years or more but less than 20 years | 300 days of the most recent pay rate |
| 20 years or more | 400 days of the most recent pay rate |
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