Sign In
Learn bits
Polity & Governance
Mahesh

23/11/23 06:03 AM IST

Haryana’s private sector domicile reservation law

In News
  • The Punjab and Haryana High Court on November 17 quashed a law enacted by the Haryana government in 2021 that guaranteed 75% reservation to locals in private sector jobs in Haryana.
Reservation Law
  • In November 2020, the Haryana Assembly passed the Haryana State Employment of Local Candidates Bill, 2020, which made it mandatory for employers in the State to reserve 75% of jobs paying a monthly salary of less than ₹30,000 (originally ₹50,000) for local residents in the State.
  • The law is applicable to all private entities in the State including companies, trusts, societies, partnerships, and limited liability partnerships.
  • It also covers any person employing 10 or more persons on salary, wages, or other remuneration for the purpose of manufacturing or providing any service; as well as any such entity as may be notified by the government from time to time. However, central or state governments or organisations owned by them remain outside the ambit of the Act.
  • A ‘local candidate’ has been defined under the law as anyone domiciled in the State of Haryana.
  • The original draft of the Bill had the condition that only those who have resided in the State for the past 15 years would be considered local candidates but this was later revised to 5 years.
  • Such candidates will have to mandatorily register themselves on a designated portal in order to avail benefits of this reservation. Employers will also have to make recruitments only through this portal.
  • The law is applicable only with respect to new recruitments and is not effective retrospectively.
  • Employers will have to register the employees already working with them in the ₹30,000 monthly salary bracket and can start recruiting new employees in the reserved category only after the completion of this registration process.
  • The local candidates can hail from any district of Haryana, but the employer can exercise the discretion to restrict the employment of local candidates from any district to 10 percent of the total number of local candidates.
  • However, companies can seek an exemption if an adequate number of local candidates of a desired skill, qualification, or proficiency are not available.
  • But this claim can be rejected by Designated Officers (an officer not below the rank of a Deputy Commissioner) after conducting an inquiry with respect to its legitimacy. Employers can also be directed to train the local youth to achieve the desired skill, qualification or proficiency in the event of inadequate eligible candidates.
  • Every employer will have to furnish a quarterly report on the designated portal and mention details about local candidates employed and appointed during that period.
  • These reports will be scrutinised by authorised officers, not below the rank of Sub-Divisional Officers who will be empowered to call any record, information, or document in possession of any employer for the purposes of verification.
  • Employers found to be violating the Act are liable to a fine between ₹10,000 and ₹2 lakh.
  • The penalty, on a subsequent offence, shall not be less than ₹2 lakh but may even extend to ₹ 5 lakh. Further, a penalty of ₹ 50,000 shall be levied on an employer who produces false records or counterfeits or knowingly makes a false statement. 
Laws in other States
  • Other States have also enacted laws providing reservations for their local residents in the private sector.
  • These states include Maharashtra (up to 80%), Karnataka (75%), Andhra Pradesh (75%) and Madhya Pradesh (70%).
  • In November 2019, the Andhra Pradesh Assembly passed The Andhra Pradesh Employment of Local Candidates in the Industries/Factories Bill, 2019, reserving three-fourths of jobs for local candidates within three years of the commencement of the Act.
  • The law was subsequently challenged in the Andhra Pradesh High Court, which opined that ‘it may be unconstitutional’.
  •  In most States, these laws have however not yet been implemented owing to opposition from companies who have refused to lower their hiring standards and due to the absence of any effective enforcement mechanisms.
Why was the Law Challenged?
  • Several industry associations from Gurugram, Faridabad, and Rewari districts of Haryana challenged the constitutional validity of the law on the ground that it violates Article 19 of the Constitution, which guarantees the right to freedom, including to reside and settle in any part of the Indian territory and practise any profession, business or trade.
  • They also contended that the law was an infringement of Article 14 (equality before the law) and Article 15, which prohibits discrimination on various grounds such as religion, race, caste, sex or place of birth.
  • Pointing out that private sector jobs were purely based on skills and the analytical bent of mind of employees, the petitioners argued that such a law would adversely impact productivity and industrial competitiveness in the State.
  • The court was also apprised that the reservation introduced by way of a ‘sons of the soil’ policy, creates a fundamental wedge between persons domiciled in different states and is contrary to the concept of common citizenship envisaged in the Constitution.
  • ‘The act of the respondent (government) forcing the employers to employ local candidates in the private sector vide this bill impugned Act is the violation of the federal structure framed by the Constitution of India, whereby the government cannot act contrary to the public interest and cannot benefit one class."
State Government argument
  • The influx of a large number of migrants competing for low-paid jobs places a significant impact on local infrastructure and housing and leads to proliferation of slums.
  • This has led to environmental and health issues which have been acutely felt in the urban areas of Haryana affecting the quality of living and livelihood.
  • Therefore, giving preference to local candidates in low-paid jobs is socially, economically, and environmentally desirable and any such preference would be in the interests of the general public’.
  • The High Court was apprised that the law intends to ‘protect the right to life/livelihood of people domiciled in the State’, and that the enactment was rooted in the problem of rising unemployment in Haryana.
  • Arguing that the law will create more jobs for the local youth, the State government pointed out that industrialisation and urbanisation in the State have drastically reduced employment opportunities in the agriculture sector.
  • Underscoring the importance of domicile reservation, the government cited the example of one of the biggest industries operating out of the State — Maruti Udyog Limited which ‘does not even have 20% staff from Haryana’.
  • It was also contended that the government has the power to create such reservations under Article 16(4) of the Constitution, which states that the right to equality in public employment does not prevent the State from ‘making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State’.
Why did the High Court quash the law?
  • While declaring the law to be unconstitutional, the court observed that a ‘wall could not be built around by the State’ that defeats the ‘spirit and soul of the oneness of the Constitution.’
  • It also underscored that a legislative mandamus could not be imposed that treats non-residents of Haryana as secondary citizens.
  • Placing reliance on Article 35 of the Constitution, the court outlined that the provision bars the State legislature from making laws on matters that fall within the purview of Article 16(3) of the Constitution (equality of opportunity in matters of public employment) since this is exclusively within the domain of the Parliament.
  • The court underscored that the Act was unconstitutional to the extent that ‘a person’s right to carry on occupation, trade, or business’ under Article 19(1)(g) of the Constitution was being impaired.
  • It was also highlighted that the law discriminates against individuals who do not belong to a certain State and that it imposes unreasonable restrictions on the right to move freely throughout the territory of India or to reside and settle in any part of the territory of India.
  • The court noted that Section 6 of the Act which requires employers to submit quarterly reports with details of local candidates employed and appointed and — Section 8, under which authorised officers could call for documents or verification to ensure the law was being implemented amounted to ‘Inspector Raj’.
  • It was also pointed out that the bar under Section 20 of the Act, on legal proceedings against any authorised or designated officer acting in ‘good faith’ tied the employer’s hands.
  • These provisions the court said amounted to exercising “absolute control over a private employer,” which is ‘forbidden for public employment’.
Source- The Hindu

More Related Current Affairs View All

24 Sep

Leveraging transit-oriented development to build productive cities

'Indian cities are on the brink of a transportation revolution, with a projected expenditure of ?3 trillion (between 2022–2027) set to be spent on approved metro rail project

Read More

24 Sep

Section 107 of BNSS

'The Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, introduced Section 107, which deals with properties which are “proceeds of crime”.' Until recently, this term w

Read More

24 Sep

Supreme Court strengthened child pornography law

'Tightening the law on child pornography, the Supreme Court recently said that even viewing, possessing, and not reporting such content is punishable under the Protection of Childr

Read More

India’s First Ai-Driven Magazine Generator

Generate Your Custom Current Affairs Magazine using our AI in just 3 steps