The Supreme Court set aside a Punjab and Haryana High Court order staying a controversial State law which provides 75% reservation for local youth in private sector jobs paying less than ₹30,000 a month.
GS II- Governance
Dimensions of the article:
- What was the reservation law?
- Who challenged the state government’s law and why?
- The Haryana State Employment of Local Candidates Bill, 2020
What was the reservation law?
- In November 2020, the Haryana Assembly passed The Haryana State Employment of Local Candidates Bill, 2020, which provided for 75 per cent reservation for local people in private sector jobs offering a monthly salary of less than Rs 30,000 (originally Rs 50,000).
- March 2021, the Governor gave his assent to the Bill. The law came into effect from January 15 this year.
- Before Haryana, the Andhra Pradesh Assembly had in November 2019, passed The Andhra Pradesh Employment of Local candidates in the Industries/Factories Bill, 2019, reserving three-fourths of jobs for local candidates within three years of the commencement of the Act.
- The Andhra law was challenged in the High Court, which observed that “it may be unconstitutional”.
- Several other states around the country are in the process of formulating similar laws.
Who challenged the state government’s law and why?
- The Faridabad Industries Association and other associations from Haryana challenged the law.
- Another petitioner in the case, the Gurgaon Industrial Association, had earlier 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.
- “The act of the respondent (government) 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,” the petition said.
The Haryana State Employment of Local Candidates Bill, 2020:
- It provided for 75 per cent reservation for local people in private sector jobs offering a monthly salary of less than Rs 30,000 (originally Rs 50,000).
- All companies, societies, trusts, limited liability partnership firms, partnership firms, and large individual employers are covered under the ambit of the Act.
- The definition of “employer” in the Act covers a company registered under The Companies Act, 2013; a society registered under The Haryana Registration and Regulation of Societies Act, 2012; a Limited Liability Partnership Firm as defined under the Limited Liability Partnership Act, 2008; a Trust defined under the Indian Trusts Act, 1882; and a Partnership Firm as defined under The Indian Partnership Act, 1932.
- The law also covers any person employing 10 or more persons on salary, wages or other remuneration for the purpose of manufacturing or providing any service; as well as any such entity as may be notified by the government from time to time.
- Central or state governments, or any organisation owned by these governments are outside the ambit of the Act.
- According to the law, a candidate “who is domiciled in State of Haryana” is called a “local candidate” and shall be able to avail the benefit of this reservation while seeking employment in the private sector.
- Such candidates are required to register themselves on a designated online portal to seek benefit of the reservation. Employers are required to make recruitments only through this portal.
Would that mean that 75% of the total work force of a private sector employer would have to be from Haryana?
- No. The 75 per cent quota is for jobs where the gross monthly salary or wages are not more than Rs 50,000, or as notified by the government from time to time. (This was brought down to Rs 30,000 later.)
- The local candidates can be from any district of Haryana, but the employer has the discretion to restrict employment of local candidates from any district to 10 per cent of the total number of local candidates. It is, however, also within the employer’s right to recruit more than 10 per cent of employees from any particular district.
Can an employer claim exemption from this 75% recruitment restriction?
- Yes, but only after going through a long procedure and only if the government-appointed officers believes that the employer’s request seeking exemption holds merit.
How is the law supposed to be implemented?
- Every employer is required to furnish a quarterly report on the designated portal with details of local candidates employed and appointed during that period. The reports are to be scrutinised by authorised officers, who have the power to call for documents or verification. The employer is liable to be fined between Rs 10,000 and Rs 2 lakh for violation of the Act.
-Source: The Hindu