Sri Lanka TEWA Compensation Calculator — Termination of Employment Act

The TEWA Act protects private-sector workmen from arbitrary non-disciplinary dismissal at workplaces of any meaningful size. When an employer wants to terminate a covered worker for retrenchment, closure, redundancy or any other non-disciplinary reason, the worker is entitled to compensation under a formula published by the Commissioner General of Labour in the gazette. This calculator implements that formula faithfully.

Coverage applies only when three conditions are met simultaneously: the employer must have employed 15 or more workmen on average during the six months preceding termination, the worker must have at least 1year of continuous service ending on the date of termination, and the termination must be non-disciplinary in nature. If any one condition fails, the Act does not apply and the worker's remedy lies elsewhere — under their contract, under the Industrial Disputes Act for disciplinary cases, or under the Labour Tribunal's general jurisdiction.

Where coverage is established, the gazetted formula credits a number of months of last drawn monthly salary for each completed year of continuous service. The credit falls in five-year bands, reflecting the principle that early years carry more weight than later years:

• Years 1 – 5: 2.50 months per year · up to 12.5 months in the band
• Years 6 – 10: 2.00 months per year · up to 10 months in the band
• Years 11 – 15: 1.50 months per year · up to 7.5 months in the band
• Years 16 – 20: 1.00 months per year · up to 5 months in the band
• Years 21 – 25: 0.75 months per year · up to 3.75 months in the band
• Years 26 – 34: 0.50 months per year · up to 4.5 months in the band

Multiply the total months credited by the worker's last drawn monthly salary to get the gross compensation. Two ceilings then apply, and the smaller one binds:

1. A months ceiling: total compensation cannot exceed 60months' salary. Reached only by very long-serving workmen on small salaries.
2. A rupee ceiling: total compensation is capped at Rs 2,500,000 under the latest Commissioner General of Labour gazette. For middle-income earners, this is the binding cap.

Years of service are pro-rated linearly within their active band, so 11.5 years of service credits five years at 2.5 months, five years at 2.0 months and half a year at 1.5 months — a total of 24.75 months. Service beyond year 34 earns no further credit.

The calculator also evaluates the procedural path. With written consent of the worker, the employer can pay the figure and close the termination directly. Without consent, the employer must obtain prior written approval from the Commissioner General of Labour through a Form L application — the figure above is what the Commissioner would order them to pay.

• Department of Labour, Sri Lanka — TEWA Act administration
• Parliament of Sri Lanka — Termination of Employment of Workmen (Special Provisions) Act No. 45 of 1971
• Government Publications Bureau — Commissioner General of Labour gazette notifications

Bands, ceilings, and eligibility rules on this calculator were last cross-checked against the Department of Labour materials on 2026-05-16. The page is reviewed whenever the Commissioner General of Labour publishes a revised compensation gazette or rupee ceiling.