The Punjab Cabinet on Saturday gave its nod to a roadmap for dismantling the decades-old contractual employment system, paving the way for the regularisation of more than 65,000 workers across 51 government departments. In another significant decision, the Cabinet granted ex-post facto approval for the reconstitution of a Cabinet sub-committee comprising Finance Minister Harpal Singh Cheema and cabinet ministers Aman Arora and Baljit Kaur to examine issues related to pending arrears of revised pay, pensions, leave encashment, and dearness allowance.
Historic Decision to End Contractual System
These decisions were taken in a Cabinet meeting held under the chairmanship of Chief Minister Bhagwant Mann. Addressing the media after the meeting, Mann described the move as historic, stating, "We will end the contractual system" in Punjab. By eliminating the role of private contractors in government employment and establishing a direct employer-employee relationship between the state and workers, the government aims to provide job security, dignity, and a clear pathway to permanent service for thousands of employees who have served Punjab for years without regular status.
Key Legislative Approvals
The Chief Minister's Office confirmed that the Cabinet approved the repeal of the Punjab Adhoc, Contractual, Daily Wage, Temporary, Work Charged and Outsourced Employees' Welfare Act, 2016. Additionally, it cleared the Punjab State Outsourced Personnel (Transition to Contractual Engagement) Bill, 2026, and the Punjab Contractual Personnel (Absorption Against Sanctioned Vacancies) Bill, 2026.
Mann noted that during interactions with the public, employees recruited through contractual and outsourcing systems frequently complained about exploitation. He assured that these workers would now receive all types of facilities on par with other government employees. "We will send an ordinance in this regard to the Punjab governor for approval. These bills will be presented in the state assembly," he said.
Benefits for Over 65,000 Workers
"More than 65,000 contract workers of Punjab have given the best years of their lives in the service of the state. With this decision, Punjab has returned to them what is rightfully theirs," Mann stated. Under the Punjab State Outsourced Personnel (Transition to Contractual Engagement) Bill, 2026, outsourced Group C and Group D employees who have completed five years of continuous service will become contractual employees of the government. Workers whose daily duties involve danger—such as fire services personnel, PSPCL linemen, sewer workers, sanitation workers of urban local bodies, waste-handling workers, and field complaint staff—will be eligible after three years instead of five. Direct state employment will be provided after five years of continuous outsourced service. After completing 10 years of contractual service, employees will be considered for absorption against regular sanctioned posts under the Punjab Contractual Personnel (Absorption Against Sanctioned Vacancies) Bill, 2026.
Scale of the Initiative
Highlighting the scale, Mann said, "A total of 65,048 outsourced workers across 51 departments fall within the ambit of this reform, and more than 26,000 workers will be among the first beneficiaries." Workers performing duties involving risks to life and health will receive faster consideration under the policy. The reform covers 15,753 workers in the power sector (including complaint-handling staff, PESCO employees, metre readers, and nodal centre workers); 8,436 workers in local government departments (primarily sanitation staff); 8,373 workers in cooperative institutions including sugar mills, Spinfed, and Markfed; 7,704 workers in school education; 4,746 workers in the Transport Department; and 1,472 outsourced fire personnel. Additionally, 2,688 workers of Health and Family Welfare, 1,575 workers of Water Supply and Sanitation, 1,533 workers of Agriculture, 1,311 workers of Jails, 1,251 workers of Technical Education, 1,570 workers of PWD (B&R), 1,322 workers of General Administration, and 1,231 workers of Medical Education Departments will also benefit.
Transparency and Implementation
Wages will be credited directly into employees' bank accounts without any agency deductions or commissions. Employees will receive statutory maternity benefits and 10 days of casual leave every calendar year. They will also be covered under a biometric attendance system. Mann emphasised transparency and protection from arbitrary action: no worker will be removed without reasons being recorded in writing and without being given an opportunity to be heard. The implementation process will begin within 45 days of Cabinet approval, with eligible categories notified in phases by the Departments of Personnel and Finance.
Other Cabinet Decisions
In another decision, the Cabinet sub-committee will consider payment of arrears arising from revised pay and pension benefits between January 1, 2016, and June 30, 2021, besides examining pending DA and Dearness Relief dues from July 1, 2021, to March 31, 2024. The committee will also study issues related to DA and Dearness Relief for various categories of employees and pensioners. To ensure faster disposal of corruption cases under the Prevention of Corruption Act, 1988, the Cabinet approved the establishment of seven exclusive special courts across Punjab. Three courts will be established in SAS Nagar, while one court each will be set up in Jalandhar, Ludhiana, Amritsar, and Patiala. The Cabinet also approved the creation of seven posts of Additional District and Sessions Judges along with 63 supporting staff positions for the functioning of these courts.
Speaking about BJP leader Amarinder Singh questioning his party's decision to appoint Kewal Dhillon as Punjab BJP president, Mann said it is the saffron party's internal matter. "But Dhillon was considered close to Amarinder Singh. When Dhillon was the candidate from Sangrur for 2019 Lok Sabha polls (from Congress at the time), Amarinder Singh had held rallies in his favour. Today he is saying Dhillon is not capable," Mann remarked.
