CHANDIGARH: With an eye on the 2027 Assembly elections, the Punjab Cabinet on Saturday decided to offer direct government contracts to 65,048 outsourced employees across 51 government departments by approving two bills - The Punjab State Outsourced Personnel Bill, 2026 and The Punjab State Contractual Personnel Bill, 2026.
The move aims to end the practice of hiring employees through contractual and outsourcing systems in government departments.
Sharing details of the decision, Chief Minister Bhagwant Mann said the Cabinet had approved the repeal of the Punjab Adhoc, Contractual, Daily Wage, Temporary, Work Charged and Outsourced Employees’ Welfare Act, 2016, and cleared the Punjab State Outsourced Personnel (Transition to Contractual Engagement) Bill, 2026, and the Punjab Contractual Personnel (Absorption Against Sanctioned Vacancies) Bill, 2026.
The move paves the way for bringing outsourced employees directly under the government and creating a clear pathway towards regular employment.
"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. No contractor will now stand between these employees and the state," Mann said.
He added, "These employees will now have direct employment, full dignity and a clear pathway to permanence. Workers presently engaged through private contractors in Punjab Government departments and entities will be taken directly into the state's own employment, eliminating the middleman contractor system."
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 be brought directly under government contractual employment. Employees working in hazardous categories will become eligible after completing three years of service.
Mann said, "Direct state employment will be provided after five years of continuous outsourced service. Thereafter, after completing ten years of contractual service, employees will be considered for absorption against regular sanctioned posts. Two new legal frameworks are being brought in, one for moving from outsourced employment to direct state contract and another for moving from state contract to the regular cadre against sanctioned vacancies."
"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," he said, adding that workers performing duties involving risks to life and health would receive faster consideration under the policy.
Mann said, "Workers whose daily duties involve danger will be considered after three years instead of five years. These include Fire Services personnel, PSPCL linemen, sewer workers, sanitation workers of Urban Local Bodies, waste-handling workers and field complaint staff."
Detailing the departments that will benefit, he said the reform covers 15,753 workers in the power sector, including complaint-handling staff, PESCO employees, meter 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.
In addition, 2,688 workers in Health and Family Welfare, 1,575 workers in Water Supply and Sanitation, 1,533 workers in Agriculture, 1,311 workers in Jails, 1,251 workers in Technical Education, 1,570 workers in PWD (B&R), 1,322 workers in General Administration and 1,231 workers in Medical Education will also benefit from the reform.
Mann said, "Workers will now have a direct employer-employee relationship with the state. Contractors will no longer exist in this arrangement. Wages will be credited directly into employees' bank accounts without any agency deductions or commissions. Employees will receive statutory maternity benefits and ten days of casual leave every calendar year. They will also be covered under biometric attendance and iHRMS systems."
He said the implementation process would begin within 45 days of Cabinet approval and eligible categories would be notified in phases by the Departments of Personnel and Finance.
"A state-level Empowered Committee headed by the Chief Secretary will monitor implementation of this decision. While many states are moving towards greater contractualisation, Punjab is reversing that trend and ending the contractual system," he said.
The Cabinet also approved two new ordinances to implement the transition, reconstituted a ministerial panel to address pending Dearness Allowance (DA) and pension-related dues, and cleared the establishment of seven exclusive special courts for the speedy trial of corruption cases.
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.