Tools
TEWA Compensation Calculator
Compensation on a non-disciplinary termination under the Termination of Employment of Workmen (Special Provisions) Act, No. 45 of 1971, computed on the formula in the Order made under section 6D and published in Gazette Extraordinary No. 1384/7 of 15 March 2005, subject to the ceiling substituted by Gazette Extraordinary No. 2216/17 of 25 February 2021.
TEWA compensation
Before relying on it
- The Act does not apply to every employer. Fewer than fifteen workmen on average over the preceding six months, or fewer than 180 days of service, and it does not bite. The Government, local authorities, co-operative societies and public corporations are outside it altogether.
- What a month of salary means for this purpose, and whether the figure is built on basic salary or on total earnings, is not settled by the material that is publicly available. It changes the answer by more than any band does.
- Compensation is ordered by the Commissioner, who decides the terms on which approval is granted. This is the formula the computation is made under, not a prediction of the order.
- A workman's application for an order under section 6 or 6A must be made within six months of the termination, under section 6B(1).
Questions
- How is TEWA compensation calculated?
- By a formula the Commissioner sets under section 6D of the Termination of Employment of Workmen (Special Provisions) Act, No. 45 of 1971, published in Gazette Extraordinary No. 1384/7 of 15 March 2005. It pays 2.5 months of salary for each of the first five years of service, 2 months from the sixth to the fourteenth year, 1.5 months from the fifteenth to the nineteenth, 1 month from the twentieth to the twenty-fourth, and half a month from the twenty-fifth to the thirty-fourth. The formula maximum is 48 months of salary.
- What is the maximum TEWA compensation?
- Rs. 2,500,000. The 2005 Order set the ceiling at Rs. 1,250,000, and Gazette Extraordinary No. 2216/17 of 25 February 2021 substituted Rs. 2,500,000. Whichever is lower, the formula figure or the ceiling, is the amount payable. The superseded Rs. 1,250,000 is still quoted in material published by government bodies.
- Does this apply to every employer?
- No. TEWA does not apply where the employer employed fewer than fifteen workmen on average during the six months preceding the month of the proposed termination, nor where the workman has served fewer than 180 days in the relevant twelve-month period. Section 3(1)(d) to (h) also places the Government, the Local Government Service, local authorities, co-operative societies and public corporations outside the Act entirely.
- Does it cover dismissal for misconduct?
- No. TEWA governs non-disciplinary termination. Dismissal for misconduct follows a separate route, generally through a domestic inquiry, with any challenge heard by a labour tribunal.
- Are part-years counted?
- This calculator counts whole completed years only. The Schedule to the 2005 Order is not publicly available, so how it treats part-years cannot be stated, and a figure produced by assuming a rule would look precise without being supported.
- Is the figure what the employee will receive?
- Not necessarily. Compensation under the Act is ordered by the Commissioner, who may grant approval on terms and conditions including payment of a gratuity or compensation. This is the formula the computation is made under, not a prediction of the order.
