The Government of Nepal has introduced new arrangements for managing employees working under service contracts in federal ministries and subordinate government agencies, establishing standardized provisions for employment conditions, remuneration, benefits and contract termination. According to a circular issued by the Ministry of Land Management, Cooperatives, Federal Affairs and General Administration on Ashoj 23, 2083 BS, the arrangements were approved through a Cabinet decision dated Ashoj 21, 2083 BS, following an organizational and management survey of government institutions. Under the approved framework, contract employees working in government-approved positions will have their service terminated upon reaching 58 years of age, while employees serving in positions eliminated through organizational restructuring will be subject to separate termination and compensation arrangements. The ministry has instructed all concerned government institutions to implement the approved provisions and use the attached model service contract agreement when making future contractual appointments.
The new arrangements provide financial protection for certain employees affected by organizational restructuring. Contract employees who have completed more than five years of service in positions abolished following an organizational and management survey may receive a one-time payment equivalent to half a month’s basic salary for each completed year of service, calculated using the government-prescribed starting salary for their respective positions. For future contractual appointments, monthly remuneration will be based on the approved government starting salary scale, while employees will receive a monthly dearness allowance of Rs 2,000, effective from Shrawan 1, 2083 BS. Employees completing at least six months of service will also qualify for an annual festival allowance equivalent to one month’s remuneration, while eligible contract staff will receive an annual clothing allowance in accordance with provisions applicable to civil servants.
The framework also introduces social security and leave arrangements for contract employees. Beginning Magh 1, 2083 BS, six percent of an eligible employee’s monthly remuneration will be deducted for contribution to the Employees Provident Fund, with the government providing an equivalent six percent contribution, bringing the total monthly contribution to 12 percent. Employees will be entitled to 12 days of ordinary leave annually, calculated at one day per month, in addition to public holidays. The agreement also provides up to 15 days of mourning leave and up to 98 days of maternity leave for female employees. Unused ordinary leave cannot be carried forward to the following year or converted into cash payments. Contract renewal will depend on performance evaluations, discipline, continued service requirements, approved positions and budget availability, while employees will be required to comply with applicable conduct and confidentiality rules.
The approved model agreement further specifies circumstances under which contractual employment may end, including completion of the contract period without renewal, reaching the age of 58, permanent recruitment to the concerned position, abolition of the position through organizational restructuring, unsatisfactory performance, disciplinary violations or absence from duty for more than seven consecutive days without notification. Government institutions must clearly specify contractual responsibilities, job descriptions, working hours, remuneration and evaluation criteria. Payments will be made through bank accounts after applicable tax deductions, while employees may be held financially responsible for damage to government property caused by misconduct or negligence. The ministry has directed federal ministries and subordinate agencies to adopt these arrangements to improve consistency, transparency and accountability in managing contract personnel across government offices.
