Haryana private sector law put on hold
The Punjab & Haryana high court stayed the law as it failed to find merit in the state’s emphatic arguments on treating the legislation prime facie valid in the interests of the unemployed youth in the state.
The Punjab & Haryana high court on Thursday put on hold the Haryana government’s law to reserve 75% private sector jobs, paying up to ₹30,000 a month, for local candidates in the state -- a decision that comes as a setback to the Manohar Lal Khattar government, and a relief to industry bodies that have opposed it.
The high court stayed the law as it failed to find merit in the state’s emphatic arguments on treating the legislation prime facie valid in the interests of the unemployed youth in the state.
“We have heard the learned solicitor general (SG) of India. We admit the petition and stay the Act,” directed a bench of justices Ajay Tewari and Pankaj Jain after hearing Tushar Mehta’s submissions on behalf of the Haryana government, during a hearing that lasted less than two minutes.
Mehta argued that like every other law passed by a competent legislature, The Haryana State Employment of Local Candidates Act, 2021, has to have the presumption of constitutionality attached to it.
“The legislation has to be considered prima facie valid and constitutional. Also, this is not a retrospective law and nobody who is employed is going to be affected. The legislation will have a prospective operation,” added the SG.
Mehta also adduced a chart to state that more than 38,000 unemployed youth and 900-odd establishments had registered themselves under the Act.
The bench, however, responded that it is staying the operation of the law for the time being, and admitted the clutch of petitions for a detailed hearing at a future date.
The detailed order of the high court is still awaited.
Haryana’s additional advocate general Jagbir Singh Malik said that the state will file a special leave petition (SLP) against the interim order before the Supreme Court.
“The high court has granted stay, but we will fight the case strongly,” Haryana chief minister Manohar Lal Khattar said in Karnal. “We have been striving for employment opportunities for Haryanavi youth”.
The high court is seized of a clutch of petitions filed by various industry bodies, including Faridabad Industries Association, Rewari Chamber of Commerce and Industries, Gurgaon Industrial Association, The Employers’ Association and IMT Industries Association.
The Haryana law provides reservation for a “local candidate”, who has been defined under the Act as someone “domiciled in State of Haryana”. Under the law, every employer is required to employ 75% “local candidates” for posts where the gross monthly salary is not more than ₹30,000. The Act, which covers private companies, societies, trusts and partnership firms, came into force from January 15. The law was made applicable for 10 years.
The petitioners argued that the Act is unconstitutional on account of being excessively vague, arbitrary, and also against the basic principle of meritocracy that was the foundation for businesses to grow and remain competitive.
It will affect productivity and industrial competitiveness and the post-Covid 19 recovery of the economy, the pleas said, adding that the government by introducing this policy of “sons of the soil” wants to create reservation in the private sector, which is an infringement of constitutional rights of the employees and citizens of India because private sector jobs are based on skills and an analytical bent of mind.
“The Act purports to effectively provide for reservation in private employment and represents an unprecedented intrusion by the government into the fundamental rights of private employers to carry out their business and trade, as provided under Article 19 and the restrictions being places upon such a right are not reasonable but are arbitrary, capricious, excessive and uncalled for,” stated the plea, filed by Faridabad Industries Association.
The petitioners contended that the Act violates Article 16 (2) of the Constitution which provides that no citizen shall be ineligible for or discriminated against in respect of employment on the grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them.
Responding to the petitions through a counter affidavit, the Haryana government, however, defended the law, arguing that the law merely makes a “geographical classification”, which it said is permitted under the Constitution.
“It is to protect the right to life/livelihood of people domiciled in the state and to protect their health, living condition and their right to employment,” said the affidavit, adding the legislation is enacted on a subject within the legislative domain of the state.
Emphasising that the law was enacted in the compelling situation of increasing unemployment, the state said: “Industrialisation and urbanisation in the state has led to huge land acquisition which resultantly has reduced growth and employment opportunities in the agriculture sector.”
The government maintained that the law does not discriminate against any person on grounds of place of birth or residence but provides employment to local candidates on the basis of domicile.
“There is a distinction between the expression ‘place of birth’ and the expression ‘domicile’, both reflect two concepts. Reservation on the basis of ‘place of birth’ would definitely be hit by the provisions of the Constitution of India but employment on the basis of ‘domicile’ does not,” it said.
To be sure, several states have enacted laws to provide reservation for local residents in the private sector. These include Maharashtra (up to 80% quota), Karnataka (75%), Andhra Pradesh (75%) and Madhya Pradesh (70%). But the validity of most of these laws has been challenged before the Supreme Court and high courts and an authoritative ruling is awaited.
Many industrial units, which had put on hold new expansion, fresh hiring and similar plans, welcomed the court decision.
“The right thing for the government to do is to take this law back as it is unconstitutional and will dent the image of the state. Many units were planning to shift to neighbouring Rajasthan and Noida just because of this regressive law. We are already the most regulated country in the world, and it will be impossible to bear the burden of this job reservation,” said Manmohan Gaind, vice president, Manesar Industries Welfare Association, a petitioner in the case.