Haryana's Private Sector Quota Law | 22 Nov 2023

Source: IE

Why in News?

The Punjab and Haryana High Court has recently quashed the Haryana State Employment of Local Candidates Act, 2020, which mandated 75% reservation for local candidates in private sector jobs.

• The court has declared the law as unconstitutional and violative of the fundamental rights of citizens and employers.

What is the Haryana Private Sector Quota Law?

• The Haryana State Employment of Local Candidates Act, 2020 was enacted by the state government in March 2021.
  • The law provided for 75% reservation for local candidates in private sector jobs with a monthly salary of less than Rs 30,000(originally Rs 50,000) for 10 years.
• The Act covered various entities, including companies, societies, trusts, partnership firms, and large individual employers.
  • Employers with 10 or more employees were included, but central or state governments and their organizations were exempt.
• The law required the employers to register their employees on a government portal and to obtain a certificate of domicile for the local candidates.
  • A "local candidate" domiciled in the State of Haryana could avail the reservation by registering on a designated online portal.
• The law was aimed at providing employment opportunities and skill development for the local youth, especially the unskilled and semi-skilled workers, and to reduce the influx of migrants from other states.

What are the Concerns Regarding the Haryana Private Sector Quota Law?

• The Faridabad Industries Association and other Haryana-based associations went to high court, contending that Haryana wanted to create reservations in the private sector by introducing a policy of “sons of the soil”, which was an infringement of the constitutional rights of employers.
  • The petitioners argued that private sector jobs are purely based on skills and an analytical bent of mind, and employees have a fundamental right to work in any part of India.
  • They asserted that the government's act of forcing employers to hire local candidates violated the federal structure of the Constitution, acting contrary to the public interest and benefiting only one class.
• The Haryana government argued that it had the power to create such reservations under Article 16(4) of the Constitution, stating that the right to equality in public employment doesn't prevent the state from providing reservations for any backward class not adequately represented in state services.
  • The Haryana government said the law was necessary to protect the right to life and livelihood of the people domiciled in the state and to protect their health, living conditions and their right to employment.

What Did the High Court Rule?

• The court noted that Section 6 of the Act, mandating quarterly reports on local candidates, and Section 8, enabling authorized officers to demand verification, were criticized as establishing an "Inspector Raj."
  • Inspector Raj refers to over regulation/supervision by the Government of factories and industrial units.
• The court said the law violated the fundamental right to equality under Article 14 of the Constitution, as the law discriminated against the citizens and employers based on place of birth and residence.
  • Article 14 guarantees equality before the law and equal protection of the laws to all persons within the territory of India.
• The law also violated the fundamental right to freedom of trade and commerce under Article 19 (1) (g) of the Constitution, as it imposed unreasonable restrictions on the employers to hire local candidates, irrespective of their merit and suitability.
• The court believes that forcing private employers to hire only local candidates goes against the Constitution's vision, as it could lead to widespread enactments by states providing similar protection for their residents, creating barriers that were not intended by the framers of the Constitution.