Government halts new contract hiring, keeps existing workers on payroll

The government has opted to keep thousands of existing contract employees on payroll and halt all new contract hiring, a move that follows protests against a controversial outsourcing proposal. The Cabinet approved a new framework for managing contract staff, allowing employees whose agreements expired at the end of the last fiscal year to continue working from July 17.

Madan Bhujel, secretary at the Ministry of Land Management, Co-operatives, Federal Affairs and General Administration, stated that the government will maintain current contract staff employment while a task force develops a long-term management policy. "The government has decided not to remove existing contract employees. A task force will recommend a long-term solution," Bhujel said.

Contract workers had protested the government's initial proposal to replace the existing system of hiring non-gazetted support staff on fixed-term contracts with a public company or outsourced service providers. Under the new Cabinet decision, all existing contract employees will have their contracts renewed with their current offices but will be placed in a central pool. Ministries and agencies can deploy them as needed after organizational and staffing reviews are complete. New contract hires are barred, with vacant positions to be filled by redeploying workers from the pool.

“

The government has decided not to remove existing contract employees. A task force will recommend a long-term solution.

Bhujel explained the policy's necessity due to reduced staffing positions, including contract posts, following ministry mergers. "Positions from the secretary level down are reduced when ministries are merged. Contract positions have also been affected. Employees whose posts are abolished will, as far as possible, be reassigned to other ministries or government offices," he noted.

However, not all contract workers will remain. Those already receiving government pensions or retirement gratuities, or who are 58 or older, will have their contracts terminated. The ministry is also tasked with submitting recommendations within one month on employment conditions for contract workers, covering pay, benefits, severance packages, and minimum contractual protections. The review will also address future contract appointment regulations and compensation for contract terminations due to abolished positions. Nepal currently lacks a specific law for contract employees, with most hired under the Public Procurement Act.

“

Positions from the secretary level down are reduced when ministries are merged. Contract positions have also been affected. Employees whose posts are abolished will, as far as possible, be reassigned to other ministries or government offices.