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December 8, 2025

Thailand’s Rules on Retirement and Severance Pay for Workers Over 60

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As Thailand transitions into an aged society, retirement policy and workplace protections for older workers have come into sharper focus. With public sentiment increasingly open to working beyond the traditional retirement age, questions about employee rights and employer obligations are more relevant than ever.

In October 2025, Prime Minister Anutin Charnvirakul proposed increasing the statutory retirement age to 65 for government officers, citing Thailand’s aged-society status and the potential social and economic benefits of longer working lives. While academics and stakeholders have raised concerns about systemic impacts, public opinion remains divided, with many workers signaling a willingness to continue working beyond the current norm.

Against this backdrop, it’s worth revisiting what the Labor Protection Act B.E. 2541 (1998) (LPA) requires in regard to retirement and severance pay. This article explains the current legal landscape under the LPA, with a focus on retirement and severance pay for employees over 60, recent judicial developments, and practical options for structuring postretirement engagements.

Retirement as Termination Under the LPA

Under the LPA, retirement—whether set by agreement between employer and employee or unilaterally stipulated by the employer—is deemed a termination of employment. As a result, employees who retire under such terms are entitled to severance pay.

The law also adds a default rule: if there is no agreed or prescribed retirement age, or if the prescribed retirement age exceeds 60, an employee aged 60 or older may declare an intention to retire. The declaration takes effect 30 days after notice, and the employer must pay severance accordingly.

In short, retirement triggered by agreement, the employer’s work rules, or an employee’s valid notice is treated as a termination, and statutory severance pay is owed.

Hiring or Rehiring Employees Over 60

Practical issues arise when an employer’s work rules set a retirement age that does not exceed 60, yet the employer hires or rehires an individual older than 60. The LPA’s default retirement-by-notice mechanism applies only where there is no retirement provision at all or where the prescribed age exceeds 60. It does not expressly address situations where the employer maintains a 60-year retirement rule and the individual’s employment commences after reaching 60.

Recent judgments from the Court of Appeal for Specialized Cases have addressed “retirement on demand” scenarios and, notably, have treated the retirement rule as inapplicable to employees whose employment began after the stated retirement age in the work rules. In effect, for such employees, the court deemed there to be no applicable retirement rule to trigger retirement as termination or retirement by notice. The result is a protection gap: employees hired after age 60 in establishments with a 60-year retirement rule may be unable to rely on the LPA’s retirement statute to retire with severance pay. In practice, these employees may have to continue working until resignation or employer-initiated termination, with severance pay and other outcomes depending on the grounds for dismissal.

From a policy perspective, this gap may discourage the rehiring or hiring of older workers and may reduce their bargaining leverage—particularly in lower-wage roles where bespoke contractual terms are uncommon.

Continued Employment Beyond Retirement Age

According to a recent Supreme Court judgment, if an employee continues working for the same employer beyond the designated retirement age without having received severance pay, the employment relationship is considered continuous. If the employer later terminates employment, statutory severance is calculated on the employee’s total length of service, using the final wage rate.

This confirms that employment may lawfully continue beyond the retirement age and that severance pay must then reflect the entire continuous service, not merely the postretirement period.

Reemployment After Retirement

If an employee retires, the employment ends, and severance is paid, the employer may rehire the individual under a new employment contract. If that new employment lasts at least 120 consecutive days, the employer must pay statutory severance for that subsequent period upon termination, calculated based on the final wage under the new contract.

Fixed-term arrangements do not automatically avoid severance. To qualify for the LPA’s fixed-term exemption, the contract must meet all of the following criteria:

  • Employment is in a special project outside the employer’s ordinary business with fixed commencement and completion, the work is temporary with fixed commencement and completion, or the work is seasonal and limited to a particular season.
  • The total term does not exceed two years.
  • The contract is in writing from the outset, specifies the end date, and contains no extension clause.

Even where a fixed-term exemption is structured, if the employee effectively continues performing the same duties as before retirement in a manner inconsistent with the exemption criteria, the employer may still owe severance when the engagement ends.

Engagement as an Independent Contractor

Employers sometimes consider consultancy or services agreements after an employee’s retirement. If the relationship is truly a hire-of-work situation rather than employment, statutory severance under the LPA does not apply. However, the actual nature of the relationship matters more than the form of the agreement, as courts will consider issues of control, integration, exclusivity, supervision, and economic dependence to determine whether the arrangement is, in fact, employment for LPA purposes. If it is recharacterized as employment, severance and other LPA obligations may be required.

Practical Guidance for Employers and Employees

Navigating retirement and postretirement employment requires careful attention to both legal requirements and practical business needs. Employers and older employees looking to enter into employment relationships should consider the following recommendations:

  • Clarify the retirement framework in writing. Ensure work rules and contracts align with the LPA and specify whether and how retirement applies to employees hired after 60.
  • Decide clearly on whether to pursue continued employment or true reemployment. If employment continues past the retirement age without severance, anticipate severance on total service upon later termination. If instead there is a clean break and rehire, there should be clear documentation of the end of the first employment and payment of severance.
  • Use fixed-term contracts only where the LPA’s exemption criteria are genuinely met. Avoid duties and practices that undermine the exemption (e.g., rolling renewals, core business work not truly temporary in nature).
  • Vet consultancy arrangements carefully. Align the actual working relationship with independent contractor hallmarks if severance avoidance is a business objective, and avoid control and integration features characteristic of employment.
  • Address the post-60 hiring gap. When hiring after 60 under an age 60 retirement rule, consider expressly agreeing to a contractual retirement mechanism consistent with the LPA, or clarifying that no retirement provision applies and setting expectations regarding termination and severance.

Whether extending employment, rehiring, or engaging consultants, careful structuring and documentation can mitigate severance exposure and compliance risk under the LPA. By proactively addressing these considerations with the help of advice tailored to the specific circumstances and business objectives, employers and employees can foster fair, compliant, and mutually beneficial postretirement working arrangements.

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