The recent decision by the Punjab and Haryana High Court to quash the Haryana State Employment of Local Candidates Act, 2020 has sparked conversations around employment reservations in private sectors. The Act, which reserved 75% of jobs for local candidates in private sector, is viewed as unconstitutional and may infringe upon the basic rights of citizens and employers.
Understanding the Haryana Private Sector Quota Law
In an effort to cultivate local employment opportunities, the state government launched the Haryana State Employment of Local Candidates Act, similar to initiatives launched in Andhra Pradesh, Madhya Pradesh, and Jharkhand. This move aimed to certify 75% of private sector jobs, with a monthly pay scale of less than Rs 30,000, to local candidates for a period of ten years.
Entities such as companies, societies, trusts, partnership firms, and individual employers with more than 10 employees were included in this Act – with central or state governments and their organizations being an exception. To ensure adherence, employers were required to register their employees on a governmental portal. Likewise, for a candidate to qualify as a “local candidate”, a domicile certificate and registration on an assigned online portal were needed.
Issues Surrounding the Haryana Private Sector Quota Law
The Act encountered resistance from the Faridabad Industries Association and other region-based associations—culminating in a legal showdown. These petitioners argued that the Act violated constitutional rights by favouring locals, thereby infringing upon the fundamental rights of employers within the private sector.
They emphasized that recruitment in the private sector is based primarily on skill and analytical capabilities. Thus, mandating the hiring of local candidates impairs the structure of the constitution, the public interest, and gives undue advantage to a specific class at the expense of others.
In contrast, the Haryana government pointed to Article 16(4) of the Constitution, which allows reservations for backward classes inadequately represented in state services. They argued this Act was needed to safeguard the right to life, livelihood, health, and employment conditions of people living in the state.
High Court’s Ruling on the Matter
Sections 6 and 8 of the Act, which mandated quarterly reports on local candidates and enabled authorized officers to carry out verification respectively, were criticized as instigating an “Inspector Raj”. This term represents excessive governmental regulation or supervision over industrial units.
The court deemed the Act to be infringing upon fundamental rights like equality and freedom of trade and commerce under Article 14 and Article 19 (1) (g) of the Constitution respectively. The Act was found to discriminate against citizens and employers based on their birthplace and residence. It also imposed unreasonable restrictions on employers to hire local candidates, regardless of their merit and suitability.
The court further asserted that such practice could lead to widespread enactments by states providing similar protection for their residents thereby creating barriers that contradict the vision of the framers of the Constitution.
