Punjab Moves to End Contractual Hiring, Clears Regularisation of 65,000 Workers

The Punjab Cabinet on Saturday approved a major policy shift aimed at dismantling the decades-old contractual and outsourced employment system in government departments, clearing the way for the regularisation of more than 65,000 workers across 51 departments.

The decisions were taken at a meeting chaired by Chief Minister Bhagwant Mann , who described the move as a “historic decision” to end contractual employment and restore a direct employer-employee relationship between the state and its workforce.

Under the new framework, the Cabinet approved the repeal of the Punjab Adhoc, Contractual, Daily Wage, Temporary, Work Charged and Outsourced Employees’ Welfare Act, 2016, along with two new bills that will govern the transition of outsourced staff into contractual roles and their eventual absorption into regular sanctioned posts .

Officials said over 65,000 outsourced workers across departments including power, local bodies, education, transport and health will be covered in phases, with more than 26,000 expected to be among the first beneficiaries.

The government said the reform will ensure job security, direct salary transfers, statutory benefits, and protection against arbitrary dismissal , marking a significant departure from the long-standing reliance on outsourcing agencies.

However, the shift is also expected to have implications for public finances , as regularisation of a large workforce may increase the state’s salary and pension burden , even as the government aims to reduce inefficiencies and middlemen commissions in the system.

The Cabinet also reconstituted a sub-committee led by Finance Minister Harpal Singh Cheema , along with Ministers Aman Arora and Baljit Kaur , to examine pending arrears related to revised pay, pensions and dearness allowance.

In a parallel development, the Cabinet also approved seven special courts to expedite corruption cases under the Prevention of Corruption Act, 1988.

Reacting to political remarks on BJP state leadership, Mann said organisational matters of the opposition were internal, while referring to comments involving Amarinder Singh and Kewal Dhillon .