Pursuant to Article 166.3 of the Labor Code, in the year preceding retirement, Employees are entitled to a reduction of the normal working hours (at least 01 hour) or the regime of part-time work will apply. The reduced hours will be counted into the paid working hours. For example: If Company A has 8 working hours a day, it will be obliged to cut down at least 1 hour/ day (i.e. 7 working hours/day) for the Employees in the last working year before retirement.
However, for Employees who have reached the age of retirement (senior Employees) and still enter into LCs, Article 166.2 of the Labor Code only regulates that senior Employees are entitled to a reduction of normal working hours or the regime of part-time work will apply to them. Other than that regulation, the Labor Code as well as relevant guiding documents do not have any provision to further clarify the situation. Therefore, labour law now only has general regulations but does not have a specific regulation on the working hours that the Employer must reduce for senior Employees.
According to the opinions of some competent local labour agencies, they contend that, except for the case of reducing working hours for senior Employees in the last year before retirement as prescribed in Article 166.3 Labour Law, labour law does not expressly stipulate the number of working hours to be reduced as well as payment for such reduced hours. Thus, it can be construed that the Employer can freely negotiate this issue with senior Employees when entering into LCs with them. However, based on the principle of ensuring more favourable conditions for Employees under Article 4.1 Labor Code, the Employer should ensure that working hours are reduced by at least 1 hour for Employees who works after their retirement age in order to avoid disputes arising during the execution of LCs.