Employment: Supreme Court Judgment No. 9052/2559 Reinforces Protections for Older Workers in Thailand’s Private Sector
1. Background about retirement age in the private sector:
In Thailand’s private sector, no universal mandatory retirement age is fixed by statute for all employers. Retirement is primarily governed by employment agreements, internal work regulations, or company policies. Prior to the Labour Protection Act (No. 6) B.E. 2560 (2017), which introduced Section 118/1, the legal framework was less explicit. This amendment clarified that retirement—whether pursuant to agreement or employer policy—constitutes termination of employment, thereby entitling the employee to statutory severance pay under Section 118.
In the absence of a stipulated retirement age in contracts or policies, or where the stipulated age exceeds 60 years, an employee aged 60 or above may elect to retire upon 30 days’ notice, with severance payable. In practice, many private sector organizations set retirement ages between 55 and 60 years. However, the application of such policies must adhere to principles of fairness, consistency, and non-discrimination, particularly as Thailand addresses the challenges of an aging society.
2. Compulsory compensation? What does the labor law say?
Under Section 118 of the Labour Protection Act, termination of employment—including retirement initiated by employer policy—requires the employer to pay severance compensation based on the employee’s length of service. The prescribed minimum rates include:
• 1 year but less than 3 years: not less than 90 days’ wages;
• 3 years but less than 6 years: not less than 180 days’ wages;
• 10 years or more: not less than 300 days’ wages (with potential enhancements for longer service).
Retirement is explicitly treated as employer-initiated termination when enforced through policy or agreement, triggering these obligations. Employers cannot circumvent severance by characterizing retirement as voluntary resignation. Furthermore, the arbitrary or discriminatory application of retirement policies may expose employers to claims of unfair dismissal.
3. Ruling – Analysis of Supreme Court Judgment No. 9052/2559:
Supreme Court Judgment No. 9052/2559 stands as a landmark decision in Thai labour jurisprudence concerning unfair termination and age-related employment practices. The case involved a head editor of a Chinese-language newspaper who commenced employment at age 55 and served for approximately 22 years until his termination at age 77. The employer introduced a new retirement policy aimed at organizational restructuring and recruiting younger staff, offering statutory severance equivalent to 300 days’ wages.
The Central Labour Court initially upheld the termination as a legitimate exercise of managerial authority for business improvement, noting the provision of full severance and absence of personal malice. The Supreme Court reversed this decision, ruling the termination an unfair dismissal. The Court adopted a substantive justice approach, scrutinizing the specific circumstances rather than accepting the policy at face value.
Key elements of the Supreme Court’s reasoning were:
• Nature of the Work: The position required specialized linguistic, editorial, and academic expertise in Chinese-language publishing. Such roles typically benefit from accumulated knowledge and experience, which increase with age, rather than physical capabilities that may decline.
• Employee’s Performance Record: The plaintiff maintained exemplary performance with perfect attendance and no health-related issues. Notably, the employer had recently promoted him and increased his salary, actions inconsistent with claims of diminished capability.
• Validity of the Retirement Policy: The newly introduced policy lacked clear, objective, equitable, and pre-announced criteria. It was viewed as an ad hoc measure rather than a transparent, consistently applied rule, rendering it an insufficient justification for termination, especially when motivated primarily by age.
The Supreme Court remanded the case for determination of damages, including interest at 7.5% per annum. The judgment emphasizes that while employers retain managerial prerogative, age-based retirement decisions must be supported by objective, job-related justifications and cannot serve as a pretext for the arbitrary replacement of experienced personnel. Although issued prior to the 2017 amendments, the ruling remains highly relevant and continues to guide the application of fairness standards in retirement and termination cases.
Key Takeaway:
Supreme Court Judgment No. 9052/2559, together with the statutory framework under the Labour Protection Act, underscores that chronological age alone does not justify termination in Thailand’s private sector. Courts will prioritize individual capability, performance evidence, and substantive fairness, particularly in knowledge-intensive roles. Employers are advised to maintain transparent, consistently applied, and objectively justified retirement policies supported by legitimate business needs. This jurisprudence strengthens protections for capable older workers while encouraging responsible workforce management practices in Thailand’s aging society.
Author: Panisa Suwanmatajarn, Managing Partner.
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