Pros And Cons Of Forced Retirement

In a sweeping step to trim down the bureaucracy, the government is working on a new Federal Civil Service Bill that will enforce compulsory retirement of a large number of employees. As per its one-time provision, civil servants who have completed 30 years of service or have reached the age of 55 may be sent packing. Thousands of employees working in civil service, public corporations and other state-owned institutions have to retire involuntarily. The proposed bill, which the Ministry of Land Management, Cooperatives, Federal Affairs and General Administration has sent to the Ministry of Law, Justice and Parliamentary Affairs for further studies and feedback, has triggered mixed reactions from different quarters.

The government’s bid seeks to cleanse the bureaucracy allegedly riddled with red tape, irregularities, inefficiency and politicisation. It is guided by the policy of austerity measures and creating a smart and efficient government capable of delivering on the government's electoral promises. One idea behind removing thousands of employees at one go is that they lack the digital skills and agility required for fast and satisfactory results. But the move is not without pitfalls. The employees, who will be forced to quit their jobs at an active age, are deprived of the principle of natural justice that their career is predictable and that they have a right to reach the top position in the bureaucratic hierarchy.  

Shock therapy 

The civil servants, who have completed 30 years of service or reached 55 years, are most likely on the verge of being promoted to the post of undersecretary or joint secretary or secretary. If the state gives them a marching order, this will amount to shock therapy applied without considering its negative repercussions. The logic of austerity measures is not so strong if the financial cost of this abrupt retirement of a large number of employees is taken into account. The state’s coffers will be strained when the government has to pay huge amounts in pensions from next year. But the public enterprises, some of them running in loss, have to pay in the form of gratuity instantly to their employees. Many lack a sound financial position to execute this provision smoothly. If the government fails to support them, they will suffer from an impending financial crisis that will cripple their functioning for years.

Some provisions of the bill pinch the employees who face this retirement scheme abruptly. Employees who escape the forceful farewell will be in service until 60 years, a two-year extension from the current 58-year age limit. Many of them might miss this opportunity by a few days or months. Those who retire under the provision of serving 30 years will not enjoy a pension of more than 30 years. Even if they have worked for more than 30 years, their pension amount will be arranged by counting 30 years of service. This provision will also apply to the current pension beneficiaries. According to the concerned ministry officials, there has been a propensity to count the service period from the time of being appointed to the post of kharidar (non-gazetted second-class employee) to the chief secretary to get maximum benefit from the state. The compulsory retirement at the 30-year mark of service has brought this tendency to an end. 

With the reduction of ministries from 22 to 18, the government also felt the need to downsize the workforce. The sources said that the government will implement the drastic step within this fiscal year so as to avoid the extra financial burden. If the one-time provision takes effect from the new fiscal year, the government should provide pension and gratuity according to the new salary scale announced by new budget.  

Risk of vacuum

If the proposed bill comes into effect by July 15, at least 35 secretaries will retire, creating a big vacuum in the civil service. The joint secretaries, who are not prepared mentally, have to handle the tough job suddenly. They may not be mature enough to take on high responsibility. As per the existing civil service law, he/she has to serve for at least five years in the post of joint-secretary to be eligible for secretary. In addition, such an individual must have experience of working in different departments and knowledge of the public procurement system. If an individual assumes the post of secretary without these basic qualifications, his/her capacity of taking crucial decisions may come into question. In the past, a career succession plan was brought to groom leadership in the civil service but it was never implemented in a true sense, as the ruling parties preferred to appoint chief secretaries and secretaries based on their political affiliation.

In 1992, the Girija Prasad Koirala government had also decided to remove a large number of employees by amending the Civil Service Regulations, 2021. It introduced a provision of compulsory retirement of employees after they serve 30 years in the civil service. This led to the retirement of 3,300 employees. Administration experts say it created a big vacuum in the civil service from which it hardly recovered. The Balendra Shah-led government has come to power with a huge mandate. It has the agenda of good governance, corruption control, stability and prosperity of Nepalis. The ongoing legal initiative is driven by the notion of a small yet competent bureaucracy but it is not without potential risks. Despite some controversies, the government enjoys popular support that allows it to take far-reaching actions. It must be cautious that its comprehensive administrative reforms will achieve ultimate goals without hitting a roadblock.

(The author is the Managing Editor of this daily.)