Haryana private sector quota law

• IAS NEXT, Lucknow
• 19, Feb 2022

Context:

The Supreme Court has set aside the Punjab and Haryana High Court order staying a controversial State law which provides 75% reservation for local youths in private sector jobs earning less than ₹30,000 a month.

The story so far:

The Haryana government has ordered that the law (the Haryana State Employment of Local Candidates Bill) providing for 75% reservation for locals in private sector jobs will come into force from January 15, 2022.

• However, the Punjab and Haryana High Court stayed the law.

Why did the Supreme Court lift the stay?

• The Bench observed that every law passed by legislature was presumed to be legal.
• An order of stay of their implementation by a court of law should be reasoned.

The High Court had not given sufficient reasons for stopping the Haryana law in its tracks on February 3.

Why was the law challenged?

• The petitioners contended that Haryana wanted to create reservation in private sector by introducing a policy of “sons of the soil”, which was an infringement of the constitutional rights of employers.
• It was also argued that private sector jobs were purely based on skills and analytical bent of mind, and employees had a fundamental right to work in any part of India.
• Forcing the employers to employ local candidates in 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 public interest and cannot benefit one class.

Highlights of the law:

• The law provides for 75% reservation in private sector jobs to those having a resident certificate (domicile).
• The law will be applicable for a period of 10 years.
• Jobs with a gross monthly salary of not more than ₹30,000 will be up for hiring from among local candidates.

Rationale behind the law:

To create a harmonious environment for industry as well as the youth along with creating the right balance between the progress of industries and the economy.

Concerns over the law:

• It could lead to multinational firms moving out of the state.
• Reservation affects productivity and industry competitiveness.

What are the legal issues in such laws?

1. The question of domicile reservation in jobs: While domicile quotas in education are fairly common, courts have been reluctant in expanding this to public employment. It raises questions relating to the fundamental right to equality of citizens.
2. The issue of forcing the private sector to comply with reservations in employment. For mandating reservation in public employment, the state draws its power from Article 16(4) of the Constitution. But, the Constitution has no manifest provision for private employment from which the state draws the power to make laws mandating reservation.
3. It may not be able to withstand judicial scrutiny on the touchstone of Article 19(1)(g).