Punjab Govt To Regularise 65,000 Outsourced Employees, Scrap Contractor System In Major Workforce Reform

Last Updated:May 30, 2026, 21:49 IST

Punjab Cabinet abolishes contractor system, regularises over 65000 outsourced staff, eases rules for high risk workers, sets panel on dues and new corruption courts.

In a major decision affecting thousands of workers, the Punjab government has approved the regularisation of more than 65,000 outsourced and non-permanent employees and announced the abolition of the contractor system in government departments.

The move, cleared by the Cabinet led by Chief Minister Bhagwant Mann, is being projected by the Aam Aadmi Party (AAP) as one of the most significant employee welfare measures undertaken by any state government in recent years.

Announcing the decision, AAP national convenor Arvind Kejriwal described it as a “historic" and “first-of-its-kind" reform that would provide job security, dignity and statutory rights to thousands of workers and their families.

“The AAP Government in Punjab has taken the historic decision to abolish the contractor system and regularise more than 65,000 non-permanent and outsourced employees. This is not just a policy decision; it marks the beginning of a new chapter in the lives of thousands of employees and their families," Kejriwal said.

Direct Government Employment

Under the new framework, outsourced employees who were previously hired through contractors will have a direct employment relationship with the government.

According to Chief Minister Bhagwant Mann, the reform will eliminate middlemen from the recruitment and salary process.

“There will now be no contractors or intermediaries between employees and the government. Every employee will have a direct employment relationship with the state, and salaries will be deposited directly into their bank accounts," Mann said.

The government said the change would also ensure greater transparency and enable workers to access employment-related benefits that were often unavailable under the outsourcing model.

Relief For High-Risk Workers

The Cabinet has also approved special provisions for employees engaged in hazardous occupations such as firefighters, sewer workers and electricity linemen.

Such workers will now become eligible for regularisation after completing three years of service, instead of the earlier requirement of five years.

The state government said the move recognises the nature of the risks faced by these employees and seeks to provide them with faster access to permanent employment benefits.

Cabinet Panel On DA And Pending Dues

In another decision, the Punjab Cabinet has constituted a special Cabinet sub-committee to address issues related to pending employee dues and Dearness Allowance (DA) demands raised by government employees and pensioners.

The government also approved the establishment of seven new special courts aimed at speeding up the disposal of corruption-related cases.

AAP Calls It A National Benchmark

Senior AAP leader and Punjab in-charge Manish Sisodia welcomed the decision, saying it would positively impact lakhs of people dependent on contractual and outsourced jobs.

“Punjab Government’s decision to regularise 65,000 non-permanent and outsourced employees has brought new hope into the lives of lakhs of people. This historic step has set a new benchmark for employee welfare in the country," Sisodia said.

The Mann government has argued that the reform reverses the long-standing trend of contractualisation in public employment and restores greater security for workers who have spent years serving government departments without permanent status.

Why The Decision Matters

Contractual and outsourced employment has become increasingly common in state government departments across India over the past two decades.

While governments have often cited flexibility and cost savings as reasons for outsourcing jobs, employee unions have frequently raised concerns over job insecurity, lower wages and limited benefits.

Punjab’s decision to abolish the contractor system for a large section of its workforce is likely to be closely watched by employee groups and governments across the country, as it represents one of the largest regularisation exercises undertaken by any state in recent years.

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