Govt ends contractual system: Over 65,000 employees to be regularised
Chandigarh, May 31 -- The Punjab cabinet on Saturday approved a comprehensive roadmap to dismantle the contractual employment system, paving the way for the regularisation of over 65,000 outsourced and temporary workers across 51 government departments.
By eliminating private contractors, the state government aims to establish a direct employer-employee relationship, providing job security and permanent service pathways for thousands of personnel who have spent years serving the state without regular status.
To formalise this transition, the cabinet approved the repeal of the Punjab Ad-hoc, Contractual, Daily Wage, Temporary, Work Charged and Outsourced Employees' Welfare Act, 2016. In its place, the executive cleared two new legislative frameworks: The Punjab State Outsourced Personnel (Transition to Contractual Engagement) Bill, 2026, and the Punjab Contractual Personnel (Absorption Against Sanctioned Vacancies) Bill, 2026.
Chief minister Bhagwant Mann said the reform returns what is rightfully theirs to the workers, ensuring full dignity and ensuring no contractor stands between the employees and the state.
The structural reform transitions outsourced workers into direct state employment before considering them for regularisation. Under the new legal framework, outsourced Group C and Group D employees who have completed five years of continuous service will move directly onto the government's contractual payroll.
A total of 65,048 outsourced workers fall within the ambit of this decision, with more than 26,000 workers set to become the first immediate beneficiaries.
The policy includes a relaxed timeline for hazardous job profiles, making personnel in high-risk categories eligible for direct contractual status after just three years of service instead of five. This accelerated track covers fire services personnel, Punjab State Power Corporation Limited (PSPCL) linemen, sewer workers, urban local body sanitation staff, waste-handling workers, and field complaint staff.
Once they move to direct state contract, employees must complete 10 years of service to be considered for absorption into regular, sanctioned posts. The breakdown of beneficiaries across sectors includes 15,753 workers in the power sector; 8,436 in local government; 8,373 in cooperative institutions like sugar mills, Spinfed, and Markfed; 7,704 in school education; 4,746 in transport; and 1,472 in outsourced fire services.
Other impacted sectors include health and family welfare (2,688), water supply and sanitation (1,575), agriculture (1,533), jails (1,311), technical education (1,251), PWD B&R (1,570), general administration (1,322), and medical education (1,231).
The transitioned workforce will receive statutory benefits, including maternity leave and 10 days of casual leave in a year. To maintain institutional accountability, these workers will be integrated into biometric attendance and the Integrated Human Resource Management System (iHRMS).
The policy also guarantees job protection, mandating that no worker can be terminated without written justifications and a formal opportunity to be heard.
The implementation process is scheduled to begin within 45 days, with the personnel and finance departments notifying eligible categories in phases under the monitoring of a state-level empowered committee headed by the chief secretary.
The cabinet granted ex-post facto approval to reconstitute a cabinet sub-committee to address lingering employee grievances regarding financial dues. The ministerial panel-comprising finance minister Harpal Singh Cheema, Aman Arora and Baljit Kaur-is tasked with resolving pending arrears for revised pay, pensions, leave encashment, and dearness allowance (DA). The committee's mandate includes examining pay and pension arrears accumulated between January 1, 2016, and June 30, 2021, alongside unresolved DA and dearness relief (DR) dues spanning July 1, 2021, to March 31, 2024, across various categories of current employees and pensioners.
To fast-track judicial proceedings under the Prevention of Corruption Act, the Cabinet also approved the establishment of seven exclusive special courts across Punjab. The judicial expansion allocates three dedicated courts to SAS Nagar (Mohali), with Jalandhar, Ludhiana, Amritsar, and Patiala receiving one court each.
To operationalise these anti-corruption tribunals, the state has cleared the creation of seven posts for additional district and sessions judges, alongside 63 supporting staff positions, aiming to ensure swift trials for corruption cases....
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