Haryana Government Introduces Law to Provide Security of Service for Contractual Employees

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AuthorWhalesbook News Team|Published at:
Haryana Government Introduces Law to Provide Security of Service for Contractual Employees
Overview

The Haryana government has enacted the Haryana Contractual Employees (Security of Service) Act, 2025, offering job security and specific benefits to eligible contract workers. The law targets those employed by the state for over five years, earning below ₹50,000 monthly, promising employment until superannuation. While it provides entry-level pay parity, health benefits, gratuity, and maternity support, it lacks comprehensive social security like EPF and non-wage benefits compared to regular government employees.

Following a trend of increasing flexible and contract employment in India, where the share of contract labor in the factory sector has risen significantly from 13% in 1993-94 to over 41% in 2023-24, the Haryana government has passed the Haryana Contractual Employees (Security of Service) Act, 2025. This legislation aims to address the precarious nature of contract work by providing job security for eligible employees, defined as those employed on contract by the State government for at least five years, earning less than ₹50,000 per month. These employees will reportedly continue to work until their retirement (superannuation).

Eligible contract employees will receive a consolidated monthly remuneration equivalent to the entry pay in the pay level of comparable regular posts. This pay will increase twice annually with Dearness Allowance (DA) adjustments. They will also be entitled to health care benefits under the PMJAY Chiraryu Extension Scheme, death-cum-retirement gratuity, and maternity benefits as per the Social Security Code, 2020. However, the Act does not extend all benefits provided to regular state government employees. Notably, it omits several non-wage benefits and crucial social security provisions like the Employees' Provident Fund (EPF). While health benefits are provided, they may be less comprehensive than those under the Employees’ State Insurance Act, 1948. The Act also lacks a formal grievance procedure available to regular employees, and exclusion from pay commissions means slower wage growth.

Impact
This law represents a significant step towards formalizing and securing long-term contract employment within the state government, potentially influencing other states to adopt similar policies. It addresses a long-standing issue of job insecurity for contract workers. However, the disparity in benefits compared to regular employees and the limited scope of social security might still leave these workers vulnerable. The model could also set a precedent for the private sector, potentially leading to varied employment structures.
Rating: 6/10

Difficult Terms and Meanings:

  • Industrial Disputes Act, 1947: A law enacted to promote industrial peace and fair resolution of conflicts between employers and employees.
  • Minimum Wages Act, 1948: Legislation that mandates the fixation of minimum rates of wages in certain employments to protect workers.
  • Contract Labour (Regulation) Act, 1970 (CLRAA): A law that governs the employment of contract laborers, aiming to regulate their conditions and payment.
  • Flexible Jobs: Employment that is not permanent, characterized by temporary contracts, part-time roles, or task-based work, offering less job security.
  • Superannuation: The act of retiring from employment, typically upon reaching a predetermined retirement age.
  • Consolidated Monthly Remuneration: A fixed salary paid each month, often encompassing all pay components without separate allowances.
  • Pay Level: A designated salary band or scale within a government employment structure.
  • Dearness Allowance (DA): An additional payment provided to employees to offset the impact of inflation, usually adjusted periodically.
  • PMJAY Chiraryu Extension Scheme: An expanded health insurance scheme, likely specific to Haryana, offering medical coverage to eligible beneficiaries.
  • Death-cum-Retirement Gratuity: A lump-sum payment provided to an employee upon their retirement or death, as a benefit for long service.
  • Social Security Code, 2020: A comprehensive piece of legislation that consolidates various laws related to social security, welfare, and insurance for workers in India.
  • EPF (Employees' Provident Fund): A mandatory retirement savings scheme where both employees and employers contribute funds, which are paid out upon retirement.
  • Employees’ State Insurance Act, 1948 (ESI): A law providing medical facilities and cash benefits to insured employees and their families in case of sickness, maternity, or employment injury.
  • Grievance Procedure: A formal system established within an organization for employees to raise and have their concerns or complaints addressed.
  • Pay Commissions: Committees periodically constituted by the government to review and recommend changes in the pay structure, allowances, and benefits for government employees.
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