Madhya Pradesh Sets March 2027 Deadline for Ending Outsourcing Against Regular Posts

The news

The Madhya Pradesh government has directed the termination of non-Class IV outsourced staff engaged against vacant regular posts for a limited period with Finance Department consent before March 2027, a move that affects thousands of workers across state departments. The Department of Planning, Economics and Statistics issued the order on 15 November 2026, citing strict compliance with Finance Department guidelines, and set 31 March 2027 as the deadline for completing the action.

Deputy Secretary Kiran Gupta of the department wrote to the Commissioner of the Directorate of Economics and Statistics, the Chief Executive Officer of the Madhya Pradesh State Policy Commission and the Executive Director of the Madhya Pradesh Jan Abhiyan Parishad, instructing them to end all limited-period outsourcing arrangements made with Finance Department consent against vacant regular posts, except for Class IV positions. The affected regular posts will be filled as needed under the Finance Department circular of 18 November 2024, officials said.

The order includes a conditional exception: if special circumstances make outsourced services indispensable beyond March 2027, the corresponding category of regular posts will be abolished. The state had already restricted outsourcing against sanctioned regular posts, and the 22 December 2025 staffing guidelines ruled out creating separate posts for outsourced personnel. In January 2026, the government cancelled its 31 March 2023 order that had allowed heads of departments to recruit Class IV staff through outsourcing at their own level.

Vasudev Sharma, president of the Outsourced and Temporary Employees' Union, said the department has begun the process of terminating outsourced workers, citing the 22 December 2025 guidelines. He said the union has been opposing the decision, noting that workers have served for years, including during the COVID-19 pandemic, and called the order an insensitive move. He urged outsourced and temporary employees to unite and protest against the terminations.

What is the constitutional status of contract labour in India?

The Contract Labour (Regulation and Abolition) Act, 1970 was enacted to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances. The Act applies to every establishment in which twenty or more workmen are employed as contract labour and to every contractor who employs twenty or more workmen. The Supreme Court in the landmark 2001 Steel Authority of India Ltd. vs National Union Waterfront Workers case held that contract workers do not have an automatic right to absorption in regular employment upon abolition of contract labour. The court ruled that if the contract is found to be a sham or camouflage, the workers would be deemed direct employees of the principal employer from the beginning. The Constitution of India under Article 38 and Article 43 directs the state to secure a social order for the promotion of welfare of the people and to ensure work and a living wage for all workers.

What was the earlier arrangement on outsourcing?

Madhya Pradesh already had a restriction on placing outsourced or contractual personnel against sanctioned regular posts, as clarified by the General Administration Department and the Finance Department. The 22 December 2025 staffing guidelines further ruled out creating separate posts for engaging outsourced personnel. In January 2026, the state cancelled its 31 March 2023 order that had allowed heads of departments to recruit Class IV staff through outsourcing at their own level, reinforcing that direct outsourcing recruitment now requires Finance Department approval.

What does the order achieve and what are the objections?

The order aims to facilitate regular recruitment by ending non-Class IV outsourcing against vacant regular posts, with affected positions to be filled under the 18 November 2024 circular. However, the Outsourced and Temporary Employees' Union has opposed the terminations, arguing that workers have served for years, including during the COVID-19 pandemic, and called the decision insensitive. The union has urged affected employees to unite and protest.