HC Stayed Haryana’s Private Sector Quota Law

In Context

• Punjab and Haryana High Court stayed the ‘Haryana State Employment of Local Candidates Act, 2020’.

Background

• Haryana government has ordered that the law for 75% reservation for locals in private sector jobs came into force from January 15, 2022.
• The Law was challenged by the Industrial Association of State, including Faridabad and Gurgaon Industrial Association, as an infringement of the Constitutional rights of employers, as well as violating the federal structure of India.

Haryana State Employment of Local Candidates Act, 2020’

• About:
  • The Act provides a 75% reservation for the locals in private sector jobs having a monthly salary less than Rs. 30,000. Earlier, the limit was Rs. 50,000 but has been subsequently revised to the present amount. 
  • The law will be applicable for a period of 10 years.
• Aim: 
  • To create a harmonious environment for the industry as well as the youth along with creating the right balance between the progress of industries and the economy.

• Coverage: 
  • The law covers all companies, societies, trusts, limited liability partnership firms and large individual employers having more than 10 employees. However, employees of the Central government and the State governments are not covered under the law.
• Penalty: 
  • The law provides for a fine between Rs 10,000 and Rs 2 lakh for the violation of the Act.

Issues with the Law

• Conflict with the Constitution of India: Experts have said that the Law violates various articles of the Constitution including Articles 14, 16(2) and 16(3) of the Constitution of India. Though the Constitution does confer the requirement as to residence within the State for employment, this power is exclusively vested in the Parliament. Therefore, a State assembly can not prescribe residence within the State as a prerequisite for employment.
• Sons of the Soil Theory: This theory refers to the belief by a group inhabiting a particular region that since they are the ‘original’ inhabitants of the region, they are the rightful owners of all its resources. This theory has proved to be divisive and is not conducive for the unity as well as the integrity of a country.
• Difficulty to find Suitable candidates: It is often seen that laws conferring local reservation often overlook the inability of the industry to find suitable candidates within the particular State. Therefore, it has been said that rather than providing local reservation, the State should, instead, focus on developing the appropriate skills in the local population.
• Retaliation by the other States: Such laws might prompt other States to erect similar barriers to entry in their respective territories, promoting regionalism and hindering unification in the country.

Similar Attempts in other States

• Karnataka: The State has promised to introduce a 100% reservation for Kannadigas in blue-collar jobs.
• Andhra Pradesh: The State government had passed a law to bring three-fourth reservation for the local candidates in jobs in the State. 
• Punjab: Recently, the CM of Punjab had announced the intention of the State government to bring in a law to ensure the reservation of local jobs for Punjabis.
• Jharkhand: The State government introduced 75% reservation for locals in jobs having salaries less than Rs 30,000, similar to the Haryana law.

Conclusion

• It is true that employment generation is a priority for any State government. However, it is imperative that the focus of the government is on imparting skills to the local population rather than trying to force the industry’s hand into recruiting candidates not suitable to their requirements. This might be contrary to the intent of the legislation and lead to the migration of industry to another State having more conducive policies.

Source: IE