In a major labour reform initiative, the Punjab Cabinet has approved a roadmap to gradually dismantle the state’s long-standing outsourcing and contractual employment system. The move is expected to benefit more than 65,000 workers employed across 51 government departments and agencies.
The decision was taken at a Cabinet meeting chaired by chief minister Bhagwant Mann. The government plans to replace the existing outsourcing model with a direct employer-employee relationship, a step aimed at improving job security and creating a structured pathway to permanent government service.
As part of the reform, the Cabinet approved the repeal of the Punjab Adhoc, Contractual, Daily Wage, Temporary, Work Charged and Outsourced Employees’ Welfare Act, 2016. It also cleared two new legislations that will govern the transition of outsourced workers into contractual employment and eventually enable their absorption into regular government posts.
Under the proposed framework, Group C and Group D outsourced employees who have completed five years of continuous service will be brought under direct contractual engagement with the government. Workers employed in hazardous roles, including fire services, power line maintenance, sewer operations and sanitation work, will receive accelerated consideration and become eligible after three years of service.
The government has proposed that employees who complete ten years in contractual service can be considered for absorption against sanctioned regular vacancies. Officials said more than 26,000 workers are expected to be among the first beneficiaries once the policy is implemented.
The reform will cover employees in sectors such as power distribution, local government bodies, education, transport, healthcare, agriculture, prisons, public works and cooperative institutions. Wages will be deposited directly into workers’ bank accounts, eliminating intermediary agencies and associated deductions.
Employees covered under the new system will also receive statutory benefits, including maternity leave and annual casual leave. The government has additionally promised safeguards against arbitrary termination, requiring departments to provide written reasons and an opportunity to be heard before any action is taken.
The Cabinet also reconstituted a ministerial committee to examine pending arrears related to revised pay scales, pensions, leave encashment and dearness allowance.
