The Punjab government has introduced major changes to its public employment system by ending the practice of hiring employees on a basic pay scale with the possibility of permanent induction. Under the new ordinance, all government appointments will now be made on a lump-sum salary package—meaning such employees will no longer be eligible for pensions.
The Punjab Regularization of Service (Repeal) Ordinance 2025 came into effect on October 31, officially abolishing the Punjab Regularization of Service Act 2018. The ordinance has also been formally presented in the Punjab Assembly.
According to officials, shifting from the basic pay scale system to a lump-sum salary model aims to reduce the massive financial burden caused by pension liabilities on the provincial treasury.
With the annulment of the 2018 Act, the process through which contract employees became permanent after completing four years of service has been immediately halted. However, the ordinance protects all decisions and appointments already made under the previous law.
What the Repealed Law Offered:
All contract employees working before the 2018 Act were considered legally appointed.
Any contract worker completing four years of continuous service is qualified for regularization, subject to a vacant post, required qualifications, and satisfactory performance.
The final decision on regularization was based on recommendations from a designated commission.
What the New Ordinance Changes:
All new departmental recruitments will be on a lump-sum salary package only.
Recruits will remain on a contract basis for their entire service.
Employees hired under this system will not receive pensions.
The government argues that the reform is necessary to reduce the escalating fiscal pressure caused by pension expenses.
Concerns and Ambiguity
The ordinance has created uncertainty among existing contract employees. Some officials claim the new law will not impact current workers, while others argue that it may affect their eligibility for future regularization.
Despite several attempts, the Secretary of Law did not respond. However, the Secretary of Regulations confirmed the repeal of the old law, though he avoided giving details about its implications.
A senior civil servant suggested that the government must either offer permanent employment or provide market-competitive salaries; otherwise, the quality of human resources will remain compromised.
