Reservation for locals in private jobs | 9th Nov. 2020

News:  Haryana government has passed the bill for 75 percent reservation in private sector jobs for locals having Haryana domicile.

About Haryana State Employment of Local Candidates Bill, 2020 

  • Bill provides for a 75 per cent job quota for local people in private sector jobs which offer a salary of less than Rs. 50,000 a month.
  • It applies to private companies, societies, trusts, and partnership firms, among others, located in the state.
  • It will be applicable to the new job openings only and won’t affect the outsiders already working on the affected jobs.
  • An exemption can be claimed by employers in the situation where an adequate number of local candidates with the desired skills, qualifications, and proficiency are not available.
  • Penalty for non-compliance ranges from Rs. 10,000 to Rs. 50,000.
  • Domicile certificate would be mandatory for the candidate seeking benefit under the law.

However, since the bill is against Article 14 and 19 of the Indian Constitution, it will require presidential assent.

Blue Collar jobs: The term ‘blue-collar job’ is used for the people involving a working-class person who performs manual labor that may involve skilled or unskilled labor.

White-Collar jobs: The term ‘white-collar job’ is used for tasks involving an office environment and may involve sitting at a computer or desk.

Pink Collar Jobs: It involved service workers whose labor is related to customer interaction, entertainment, sales, or other service-oriented work.

Other states with reservation for locals in private jobs

  • MP government in 2018 made it mandatory to give 70% of jobs to locals. But this law was not implemented on the private companies as a whole. It provided for the reservation in companies availing financial and other facilities from the government.
  • Andhra Pradesh became the first state to pass such a law in 2019. It reserved 75% private jobs across all categories in industrial units, factories, joint Ventures as well as Public-Private Projects.
  • Karnataka government also approved a new industrial policy (2020-2025) in 2020. This policy to ensure jobs for locals with a minimum employment of 70 percent to Kannadigas on an overall basis and 100 percent in the case of Group D employees.

How states are providing reservation to locals?

States Reserving Jobs for Locals: Some states have been using the loopholes in the laws to reserve government jobs for locals: 

  • Public Employment (Requirement as to Residence) Act: Exercising the powers under Article 16(3), Parliament enacted the act aimed at abolishing all existing residence requirements in the states and enacting exceptions only in the case of the special instances of Andhra Pradesh, Manipur, Tripura, and Himachal Pradesh. 
  • Language: States have gone around the mandate of Article 16(2) by using language. States that conduct official business in their regional languages prescribe knowledge of the language as a criterion.  
    • This ensures that local citizens are preferred for jobs. For example, states including Maharashtra, West Bengal and Tamil Nadu require a language test. 
  • Special protections under Article 371: Some states have special protections under Article 371. Andhra Pradesh under Section 371(d) has powers to have “direct recruitment of local cadre” in specified areas. 
  • Regarding the violation of fundamental rights, the Haryana government states that while Article 16 talks about “public employment”, the Bill only pertains to “private sector employment”.

Implications of reservation in private jobs

Although recently many state governments have passed such laws, many states have tried implementing the quotas previously as well. But laws remained on papers only.

  • In 1995, Gujarat introduced an 85% reservation for locals but could not enforce it.
  • In 2008, Maharashtra introduced an 80% reservation for locals in industries that seek state incentives and tax subsidies.

However, all these steps proved to be unsuccessful due to various reasons:

Companies: Industry bodies such as Assocham have questioned the effectiveness of such steps due to the absence of talent pool required for skilled jobs. 

  • Moreover, companies look at their profits more than the welfare of locals, there is a likelihood that if such steps result in a reduction of profit of a company, it might consider moving out of that state.
  • Ultimately, this step would discourage capital investment in the implementing state.

Threat to unity: This step would create friction among locals and non-locals in the implementing states and against the residents of that state in the other states.

Against constitutional provisions: As mentioned above, these laws are against the spirit of constitutional provisions (Article 16 and 19) that provide fundamental rights to Indian citizens to work anywhere in the country.  

Constitution and judgments concerning reservation for locals

What does the Constitution say? Article 16 in the Constitution of India refers to equality of opportunity in government jobs.

  • Article 16(1): It provides for equality of opportunity for all citizens in matters relating to ’employment or appointment’ to any office under the State. 
  • Article 16(2): It provides that there cannot be any discrimination on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them. 
  • Article 16(3): It provides an exception by saying that Parliament may make a law “prescribing” a requirement of residence for jobs in a particular state. This power vests solely in the Parliament, not state legislatures. 
  • Article 19(g): Article provides the freedom to practise any profession, or to carry on any occupation, trade, or business.

Supreme Court Judgements: 

  • Dr. Pradeep Jain v Union of India (1984): The Supreme Court discussed the issue of legislation for “sons of the soil”. It expressed an opinion that such policies would be unconstitutional but did not expressly rule on it as the case was on different aspects of the right to equality. 
  • Sunanda Reddy v State of Andhra Pradesh (1995): The Supreme Court affirmed the observation in Pradeep Jain to strike down a state government policy that gave 5% extra weightage to candidates who had studied with Telugu as the medium of instruction. 
  • In 2002, the Supreme Court invalidated appointment of government teachers in Rajasthan in which the state selection board gave preference to “applicants belonging to the district or the rural areas of the district concerned”
  • In 2019, the Allahabad High Court struck down a recruitment notification issued by the Uttar Pradesh Subordinate Service Selection Commission which prescribed preference for women who were original residents of the state. 

Way forward

Encouraging employment and thinking of the betterment of the state is the job of state government in power, but it should not be at the cost of the economic development of the state. A country like the US has become a superpower by allowing migrants and talents from other countries to work with equal opportunity, the same rule applies to the states of any country. A state, attracting and encouraging talent from other state, is on the better position to become developed and promote welfare of its people, compared to the one making the process difficult.

Haryana government must look at the implications of such law on the thriving economy of the state and contribution of the outsiders in it and try to bring an alternative in the form of incentives to companies on skill development of locals.

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