KATHMANDU: The government has issued a strict seven-point directive to restructure contract employment across all state departments following job cuts from recent Organization and Management (O&M) surveys.

Under a Cabinet decision enforced by the Ministry of Public Administration on Friday, retired government pensioners or gratuity recipients working on contract will not receive extensions and will be formally phased out effective July 17, 2026.

To manage the remaining workforce, the government has imposed a complete freeze on hiring new external contract staff for vacant or newly created posts. Instead, active non-pensioner contract employees will be placed into a centralized “pool” maintained by the Ministry.

All state agencies, including those undergoing mergers or dissolution, must now fulfill their temporary staffing and asset protection needs by pulling exclusively from this existing workforce pool.