Karnataka: New Bill proposes penalty for govt job outsourcing

Bengaluru: March 31, 2028, will be the cut-off date for private agencies engaged in outsourcing government jobs to end the practice, after which the violators could be punished with a maximum imprisonment of three years and a fine up to Rs 5 lakh, says a new Bill drafted by the state government.

The Karnataka Prohibition of Private Outsourcing in Government Entities Bill, 2025, which DH has accessed, also penalises the concerned officer of the “client organisation” (government department, PSU, boards, corporations, university, society and so on controlled by the state government) with “major penalty”.

The Bill defines an outsourced employee as one engaged on a contract/outsourced basis in any client organisation immediately before the Act is commenced, whether engaged directly or through any private agency.

According to the new Bill, which is likely to be placed in the next Cabinet meeting, the outsourcing system will be phased out by the cut-off date.

“All existing arrangements or agreements with private outsourcing agencies shall stand concluded or (shall be concluded) stage by stage as determined by the government from time to time through notification,” the proposed legislation states.

Till then, the ‘Bidar model’ will be put in place.

The ‘Bidar model’ refers to contractual appointment of outsourced employees through district-level workers’ services multi-purpose cooperative societies headed by the respective deputy commissioners.

According to a document by the labour department, the ‘Bidar model’ seeks to register at least 1,000 workers in each district and provide them social security benefits like Provident Fund (PF), Employees State Insurance (ESI) and timely wages. The model, which is being adopted in Mysuru, Tumakuru and Dharwad districts, will now be implemented across the state before the provisions of the new law come into effect.

Weightage, age relaxation

According to the Bill, the state government may grant “weightage” and age relaxation to outsourced employees in every direct recruitment conducted to regular Group C and D posts by the Karnataka Public Service Commission or any public-sector recruiting authority.

Every recruitment notification issued after the commencement of this Act shall mandatorily incorporate the provision, the Bill adds.

The development comes after extensive discussions for over a month in a Cabinet sub-committee headed by Law and Parliamentary Affairs Minister HK Patil. 

On November 21, DH had reported that the Cabinet sub-committee had recommended ending job outsourcing by March 2028, and that a Bill would soon be introduced in this regard.

‘Introduce direct payment’

The All India Central Council of Trade Unions (AICCTU) had written to Patil, urging the government to bring all contract labourers under the direct payment system.

AICCTU State Secretary Maitreyi Krishnan welcomed the sub-committee’s decision to end job outsourcing, but felt it must be done immediately instead of waiting till 2028. She argued that the direct payment system was “time-tested” and better than the ‘Bidar model’, “which would replace one contractor with another”.

The AICCTU also sought wages for contract labourers on par with regular employees in accordance with the ‘equal pay for equal work’ principle. Until then, the trade union sought a minimum monthly wage of Rs 42,000 for contract workers.