YES

3 decompositions
 #1 -----------
   4: hd(:(x3,x4)) -> x3

 #2 -----------
   6: d(:(x7,x8)) -> :(x7,:(x7,d(x8)))

 #3 -----------
   1: nats() -> :(0(),inc(nats()))
   2: inc(:(x1,x2)) -> :(s(x1),inc(x2))
   3: inc(tl(nats())) -> tl(inc(nats()))
   5: tl(:(x5,x6)) -> x6

@Knuth and Bendix' criterion
--- R
   4: hd(:(x3,x4)) -> x3

--- S
   4: hd(:(x3,x4)) -> x3


@Knuth and Bendix' criterion
--- R
   6: d(:(x7,x8)) -> :(x7,:(x7,d(x8)))

--- S
   6: d(:(x7,x8)) -> :(x7,:(x7,d(x8)))


@Rule Labeling
--- R
   1: nats() -> :(0(),inc(nats()))
   2: inc(:(x1,x2)) -> :(s(x1),inc(x2))
   3: inc(tl(nats())) -> tl(inc(nats()))
   5: tl(:(x5,x6)) -> x6

--- S
   1: nats() -> :(0(),inc(nats()))
   2: inc(:(x1,x2)) -> :(s(x1),inc(x2))
   3: inc(tl(nats())) -> tl(inc(nats()))
   5: tl(:(x5,x6)) -> x6