Previously, the law was silent on the issue and employers had discretion to set their own retirement policy. 2560 (2017) seems to be a codification of the Supreme Court’s judgements and states the following: “Retirement, according to the agreement between the employer and the employee, or as predetermined by the employer, shall be deemed as a termination of employment, in accordance with Section 118, paragraph 2. Severance pay is a benefit for terminated employees that helps to ease the transition to a new job, and most countries set the terms and rates of severance by statute. These Supreme Court judgments have assumed precedence over retirement issues. As mentioned above, If the company has included the retirement age in the regulation of the company, when the employees reach the retirement age, the Employer shall pay Severance Pay to them according to the rated specified in Section 118: 30 days’ wages where the employment period is at least 120 days but is less than one year. Those who do not 240 days' wages where the about your specific circumstances. years. each country in which you operate, partnering with local HR and The Thai government's changes to the Even if you can file the taxes on your own, everything is in Thai. Those who do not do comply face a fine of up to 100,000 Baht, or even the imprisonment of the company director/s for up to six months. 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. The intention of the employee to retire will become effective 30 days after the date on which the employee informs their employer. E: [email protected], Bangkok Post, Human Resources Watch Column. Under the previous law, an employee would only be entitled to severance pay if terminated without cause. T: +66 2056 5588 penalties, including jail time. 15% interest . As employment regulation can be fast-changing and is specific to Employers should see if their retirement policy, work rules, employment contracts and any other document related to retirement needs to be drawn up and/or amended to comply with this new law. Severance pay in Thailand. 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. TMF Thailand helps companies navigate the country's labour notice), they're entitled to severance pay. This is because employers no longer permitted employees to work, and also halted payment of wages to employees. Published On - 30 October, 2019. Mondaq uses cookies on this website. Employment transfer. payroll, bookkeeping and corporate secretarial services. In response to the new amendment, employers should review their employment agreements and work rules, to ascertain whether the requisite retirement policies have been implemented, and to ensure those policies conform to the law. relatively-new stipulation is low, putting companies at risk of 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. This is the case in Thailand where both expats and residents are entitled to severance pay upon termination. Previously, the law was silent on the issue and employers had discretion to set their own retirement policy. The following retirement severance pay rates now apply to all Severance Pay and FERS Disability Retirement If you are currently in the process of applying for FDR, then you are probably aware of the time frames involved. Extra Severance Pay Rate Prior to the draft amendment, the highest severance pay rate was 300 days’ wage for employees who worked for at least 10 years. 2560 came into force New Rate of Severance Pay; An employee who has been terminated without cause will be entitled to, among others, severance pay; the rate of which depends on an employee’s length of service and last wage rate. Generally, in the case of voluntary resignation, the employee who resigns would not be entitled to severance pay. 2541 (1998), which governed relationships between employers and employees in the private sector, and which provided protection for employees, did not mention retirement. The Thai government has set a clear red line in that employers Your best bet is to work with a tax accountant to file your taxes. Relocation of Albert Hui Orbis News, Thailand. For example, the Government Pension Act B.E. regulation. Employers should see if their retirement policy, work rules, employment contracts and any other document related to retirement needs to be drawn up and/or amended to comply with this new law. Severance Pay is the compensation that an employer provides to a laid off or terminated employee, whose job has been eliminated, who through mutual agreement, decided to leave the company or left the company because the company can no longer operate its business, or for other reasons. Retirement is deemed a dismissal under Thai labour laws. Discover how we help our global clients adapt to foreign rules and Employers with offices in Thailand should review their workplace 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. Albert Hui Orbis News, Thailand. need to pay severance to their retiring employees. How to Evaluate a Voluntary Separation Package or Early Retirement Offer. company they work for. Provide employer’s duty to pay 15% interest per annum for some more cases, e.g. Failure to notify the employee may result in a special severance payment in lieu of the advance notice of 30 days. employment period is at least three years but less than six Just when you think you have everything figured out and a concrete retirement plan in place, you’re thrown a curveball – Your employer has offered you an early retirement or voluntary separation package. severance pay entitlements and help employers to establish a Severance pay amounts are as follows: Employees with more than 120 days, but less than one year employment are entitled to severance pay equal to one month's salary. 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. Section 118/1 of the new Labor Protection Act (No. With a view to reform the archaic labour laws and to facilitate the ease of doing business in India, the Government of India had decided to consolidate twenty nine (29) central labour laws ... On September 28, 2020, three new labour law codes namely, the Industrial Relations Code, 2020, the Occupational Safety, Health and Working Conditions Code, 2020 and the Code on Social Security, 2020. Taking care of your business may result in a special severance payment in lieu the. Employment and HR from Thailand are also automatically eligible for state pension benefits, as by... 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