Haryana’s 75% local jobs quota stayed by Punjab and Haryana High Court

Domicile-based reservations in private jobs takes a hit

Haryana’s 75% local jobs quota stayed by Punjab and Haryana High Court

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• The story: In a setback to the BJP-JJP government in Haryana, the Punjab and Haryana High Court stayed the state government law to give 75 per cent reservation to youth belonging to the state in the private sector. Such quotas have sprung up in many states in recent years, as governments battle the situation of jobless growth. There is a total of five states with provisions for 75% or more reservations in private jobs for locals. These are – Karnataka, Jharkhand, Haryana, Andhra Pradesh and Punjab.   
• Key points: The law "Haryana State Employment of Local Candidates Act, 2020" is applicable in industries having more than 10 employees. Under it, a provision has been made to impose a fine, ranging from Rs 50,000 to Rs 2 lakh, on the industries which do not employ local candidates. In November 2021, the BJP-JJP government had notified the law to implement 75 per cent job reservations for locals in the private sector.

1. It envisaged reservation for local youth in the private sector with an upper limit of gross monthly salary up to Rs 30,000. The law is applicable for 10 years.
2. The state government also relaxed the residency requirement from 15 to five years for a person to get a bona fide resident certificate in the state to provide some flexibility to the private companies in hiring.
3. Later new startups and Information Technology companies were given exemption for two years under the Haryana State Employment of Local Candidates Act.
4. Short-term (45 days) works have been exempted from this Act.
5. Sowing of crops, embroidery, and the primary works related to agriculture-related activities have been exempted. Exemptions have also been given to domestic servants and those industries for which skilled workers are not available.

• Constitutional validity of reservations in private sector: The legislative exercise by the states in favour of reservation for the domiciles is vulnerable on two major grounds.

1. First - there are provisions enshrined under Articles 15(4), 15(5), 15(6), 16(4) and 16(6) of the Constitution for reservations in admission to educational institutions, and jobs in public employment, to ensure advancement of backward classes. But, there is no provision in the Constitution which enables the Union or the States to enforce reservations in jobs in the private sector.
2. Second - The case law in the Supreme Court goes against reservation of jobs in the private sector in favour of any category of citizens, domiciles included.
3. Article 16(3) enables Parliament to make provisions for domicile-based appointments in regard to a class or classes of employment or appointment to an office under the Government of, or any local or other authority within, a State or Union territory. This means that domicile-based reservations are Constitutional in a limited sense, that is, only for certain classes of employment and appointments and the power to make such laws is vested only with the Parliament, and not the State legislatures.
4. This Article pertains only to public employment only and does not enable even Parliament to apply it to the private sector. Therefore, any law made by the State in this regard is to be tested against the provisions of the Constitution.

• Freedom to all: The Article 19(1)(g) guarantees all citizens (regardless of domicile) the right to freedom “to practise any profession, or to carry on any occupation, trade or business,” though this is not an unqualified right and is curtailed by reasonable restrictions as envisaged under Article 19(6), it is to be seen how the state governments extrapolate the “reasonable restrictions” “in the interest of the general public” in the Constitutional Courts. The state governments’ laws mandating reservations in the private sector are prima facie repugnant to Article 14, which confers a right to equality on all “persons” and is a thread that runs through all the provisions of the Constitution, casting a “Constitutional Duty” on the State to make laws which are “just, fair and reasonable” as recognized and ennobled by the Supreme Court’s Maneka Gandhi case judgement of 1978.
• Is domicile-based reservation Constitutional: India implicitly adopted a policy of laissez faire with respect to the private sector, as apparent from a reading of the Constitution. Even in 2005, reservations were further opened up to a narrow window involving admissions to private educational institutes only.

1. The arguments to enforce government regulations and reservations in private educational institutes were rejected by the Supreme Court in TMA Pai Foundation.
2. The ratio of this judgment was further clarified unequivocally in PA Inamdar. The Supreme Court, in PA Inamdar, said that allowing government regulation and reservations in private educational institutes would have the effect of nationalising the private educational institutes.
3. To undo the above judgments, the government, in 2005, enacted the 93rd Amendment to the Constitution, amending Article 15 by inserting clause (5), which paved the way for reservation in private educational institutions, whether aided or unaided by the State, but excluded minority educational institutions referred to in Article 30(1).
4. The government relied, for its support, on Article 46 in Part IV of the Constitution on Directive Principles of State Policy, which states that the State shall promote with special care the educational and economic interests of the weaker sections of the people and protect them from social injustice.  In Ashoka Kumar Thakur v Union of India, the Supreme Court’s Constitution bench, upheld the Constitutional validity of this amendment.

• Summary: There’s no denying that migration has its own hazards and it does strain the States' infrastructure and habitation, but can this be considered reason enough to neutralise the Fundamental Rights guaranteed under Articles 14 and 19(1)(g) by enacting domicile-based laws? Employment is the principal factor behind migration and shutting the doors on employment to non-domiciles would be a gross violation of not just the Fundamental Rights of citizens, but would also cause hostility among states. Such laws will result in nothing but the balkanisation of Indian states on the basis of domicile.
• EXAM QUESTIONS: (1) Discuss the challenges in implementation of providing reservation to economically weaker sections (EWS) in India. (2) In the era of high competition, reservation in jobs and higher education needs to be rationalised. Critically analyse in the light of Haryana’s legislation that mandates reservation to locals in private jobs.

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