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Contract Appointment is the way forward; Public Sector cannot bear Regular Appointments

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By Muhammad Zubair


The public sector has been facing the challenging task of human resource management. The permanent and regular mode of appointments has created an administrative and financial challenge to the government. The resolution of these challenges has the core policy priorities. Therefore, all governments adopted the contractual mode of appointment. The reference of the contract policy of Punjab is being dissected to understand the dynamics, issues, and solutions to public human resource management. The Government of Punjab notified the Contract Appointment Policy on December 29, 2004, after realizing that the regular mode of appointment is not suitable for most of the Government sector assignments. Certain administrative and financial factors were quoted to justify this paradigm shift. The change to contract mode called for a legal and Policy framework to govern contract appointments. Thus, to clarify the legal position of contract appointments and provide detailed policy guidelines, the Contract Appointment Policy 2004 was issued. 

Scope of this review

This review will provide plenty of food for thought as to whether or not the Contract Appointment Policy is a perfect policy intervention. Whether it was doomed to fail due to deficiencies inherent in it or poor implementation or lack of political will did not let the Policy succeed? This review will be the first research attempt on the subject, which will help future researchers to build upon the corpus. It analyses the primary policy intervention aimed at institutionalizing the contract regime. An effort has been made to draw the correct conclusions and suggest a future course of action. The methodology employed is descriptive, critical and analytical. Qualitatively, this report incorporates information from primary data collection gleaned from the Regulations Wing of S&GAD and based on interviews with relevant Government authorities and personnel. The senior officers who have remained directly involved in framing, implementing and amending Contract Appointment Policy 2004 were interviewed and consulted. Change management and policy cycle perspectives have been invoked to show that change is not only to be introduced but also managed and reinforced through policy evaluation and mid-course corrections. The whole issue has been boiled down to a trade-off between two values, i.e. administrative and fiscal concerns and political feasibility. 

The criteria commonly used in Policy Analysis involving effectiveness, efficiency, equity, political acceptability, administrative operability, robustness and improvability, etc. have been kept in view.

1.1.Overall Context and Historical Background 

Before Contract Appointment Policy, there was no institutional arrangement for determining categories of posts to be filled on a contract or regular basis. There needed to be guiding principles for fixing contract pay packages. Marked disparities were observed for similar categories of posts in terms of pay packages. Various governments made contract appointments in multiple departments without service rules or eligibility criteria. As for contract appointments of regular government servants, numerous issues emerged regarding retention of lien, treatment of period spent on contract, pension, etc. Thus the Contract Appointment Policy put in place an institutional arrangement. 

Contract appointments were used to be made against very few posts. For instance, re-employments and appointments in development projects and against tenure posts (Member PPSC, Ombudsman, etc.) were made on a contract. The Health Department resorted to contract appointments from 1996-97 onwards. The Education Department also shifted to the contract mode from the year 2000-2001 onwards[1]. In June 2003, the Finance Department issued a circular letter No. E&A (FD) 12-7/2003(P), dated 02.06.2003, requires government departments to make all appointments on the contract unless otherwise allowed. Consequently, the Government made almost all appointments in government departments on contract.

1.1.1. Features of Contract Appointment Policy

Following are some salient features which aimed at making the Contract Appointment Policy a perfect instrument: 

i. Although contract appointments are to be made through notified selection committees, the PPSC channel has also been recommended as preferable. 

ii. Contract appointments are to be made under relevant service rules or prescribed eligibility criteria and shall be governed by their terms and conditions. 

iii. The Policy incorporates detailed guidelines and safeguards to ensure merit. 

iv. Routine contract appointees are allowed 30 per cent of the minimum pay scale as social security benefit instead of a pension. 

v. A policy framework has been provided for regular government servants who are appointed on a contract basis in the government sector. 

2. Following questions have been framed to draw the right conclusions: 

  1. Has the outcome of the Policy created equity? 
  2. Has the Policy proved effective?
  3. Is Policy efficient?
  4. Is Policy politically acceptable?
  5. Has Policy enhanced the Government’s credibility?
  6. Does the Policy have the support of administrative operability?
  7. Does the Policy contain robustness and improvability? 

Now the questions mentioned earlier are addressed as under: 

2.1. Equity

The outcome of the Policy should create equity among the individuals. Equity calls for fair distribution of resources and is measured by comparing the ratio of contributions (or costs) and benefits (or rewards) for each person[2]. Inequalities in relationships will cause those within them to be unhappy to a degree proportional to the amount of inequality[3]. People value fair treatment, which motivates them. Much like other prevalent theories of motivation, such as Maslow’s hierarchy of needs, equity theory acknowledges that subtle and variable individual factors affect each person’s assessment and perception of their relationship with their relational partners (Guerrero et al., 2005). According to Adams (1965), anger is induced by underpayment. In most cases, payment is the primary concern and, therefore, the cause of equity or inequity.  

The contract employees, from day one, believe that regular employees have more job security and have pensionable service. In contrast, the Government can terminate the service of contract employees without assigning any reason. Thus they hanker after the regularization of their contract appointment and take their contract appointment as a springboard to regular appointment. They are also burdened with more work by regular employees who treat them as second-rate employees. Considering themselves privileged, regular employees shift tedious jobs to contract employees who have to perform such tasks because they fear losing their job. Such a discriminatory climate demoralizes contract employees, and they feel themselves justified in lobbying for regularization of their services. Thus the principle of equity was compromised by the Contract Appointment Policy 2004. 

2.2 Efficiency

Ideally, a policy should achieve its objective at the lowest possible cost reducing the waste of government resources to the minimum. The rationale is given for the intervention of the Contract Appointment Policy mainly includes financial and economic reasons. The Government was finding it hard to foot the bill of salaries, let alone the pension bill. 

The Contract Appointment Policy 2004 could have significantly reduced the pension liabilities had the Government not subsequently regularized the services of the contract employees. The Government has yet to maintain or consolidate the data of contract employees whose services have been regularized in bulks since 2009. According to factual data regarding contract employees converted to regular employees, as many as 9,730 contract employees were regularized up to 16.10.2016. [4] Thus, these employees now enjoy the status of civil servants and are entitled to pension benefits. 

According to a recent news report, the pay and pension bills have become almost equivalent in Pakistan as these two heads are consuming Rs 431 billion and Rs 421 billion, respectively, in the outgoing fiscal year 2019-20. [5] Thus the efficiency envisaged in the Contract Appointment Policy 2004 has been compromised, which might otherwise have been secured if the Government had strictly implemented the Policy. 

2.3 Credibility

The policy decision should enhance the Government’s credibility in the eyes of the public at large. For a government, losing credibility means losing legitimacy. As for the Contract Appointment Policy 2004, the people, especially the contract employees, took the paradigm shift of contract appointments with a pinch of salt. They take contract mode discrimination against contract employees, vis-à-vis regular employees. 

As many as 45 contract employees recruited in S&GAD whose services were subsequently regularized said during the interview that such policies cannot earn the Government any credibility, being against the principles of justice and fair play. They called the contract regime, besides the regular dispensation, double standards. They said that influential departments obtain approval from the Government for filling their posts on a regular basis on the recommendations of the Contract Appointment Regulation Committee. [6] Hence, the Policy from the very beginning lacked credibility.  

2.4. Political acceptability

The Policy should have political acceptability. The actions of politicians are strongly influenced by how they are likely to affect their popularity and re-election chances. They, therefore, have an almost instinctive preference for popular policies. Low public acceptability is one of the significant barriers to consistently implementing the Policy. Public solid resistance may inhibit implementation, as political parties fear consequences for their next election. 

Contrary to the provisions of the Contract Appointment Policy, the political Government in Punjab, on October 14 2009, allowed its departments to convert their contract appointments up to BS 15 into regular ones against the posts presently held by them. Simultaneously all Autonomous/Semi-Autonomous Bodies/Special Institutions in Punjab were also allowed to make appointments regularly of the contract appointees. The Government did not extend only the contract employees working against posts in various projects/ programmes/PMUs/PMOs and the facility’s time-bound (one-time) development activities. Subsequently, the Chief Minister approved guidelines for the appointment of contract employees in BS-16 and above regularly vide notification dated 10.11.2010. Thus the Government initiated a process to regularize almost all the contract employees recruited since the issuance of the Contract Appointment Policy in 2004, who have three years of contract service to their credit. 

Again the contract employees had another opportunity for regularization when the provincial Government in 2013, vide notification No.DS (O&M) (S&GAD) 5-3/2013, dated March 1 2013, ordered the regularization of contract employees in BS-1 to 15 against the posts held by them in various Departments. Autonomous / Semi-Autonomous Bodies / Special Institutions were also allowed to avail of the opportunity. 

Yet again, the political Government, which remained in office from 2013 to 2018 and recruited several contract employees, promulgated the Punjab Regularization of Service Act 2018 to provide for appointments regularly. It was a bid to regularize the contract services of all employees recruited by that last Government. It was a one-time dispensation meant to regularize the services of certain employees. The promulgation of this law by the outgoing political Government was a significant departure from the Contract Appointment Policy 2004. The next provincial Government maintained its provisions and enhanced its scope and application through further amendments. It made the law an all-embracing instrument through which any contract employee who completes three years in service is eligible for regularization of their services. 

Therefore, judged against the criterion of political acceptability, the Contract Appointment Policy 2004 does not resonate with the political Government, the public at large or the contract personnel. 

To be continued.

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