Is the Haryana Act legal?
- Private firms will likely claim that the law interferes with their constitutional rights to carry on trade freely
Haryana government’s new law to reserve 75% of private sector jobs in the state, paying Rs.50,000 or less a month, for local candidates, has triggered a controversy. But is the Haryana State Employment of Local Candidates Act, 2021 legal?
What are the provisions in the Constitution that enable reservation/quota?
Article 14 guarantees equality and equal protection of law to all. Articles 15 (1) and 15 (2) prohibit the State from discriminating any citizen on ground of religion, race, caste, sex, or place of birth. But clauses (3) to (5) of Article 15 empower the State to positively discriminate in favour of the grossly underrepresented and neglected sections of the society in order to promote substantive equality. Article 15(3) empowers the State to make special provisions for women and children while Article 15(4) authorises the State to make special provisions for advancement of socially and educationally backward sections or SC/STs. Article 15(5) goes one step further and says the State can make reservation in admission to education institutions, whether or not aided by government.
Similarly, Articles 16 (1) and 16(2) lay down that the State cannot discriminate against citizens in the matters of employment.
However, clause 3 of Article 16 allows Parliament to enact a law with residence qualifications necessary for government jobs, thus introducing the domicile-based preferential treatment. Article 16(4) also allows the State to make reservation for any backward class of citizens, which in the opinion of the state is not adequately represented in services. This opens door for reservations for Other Backward Classes (OBCs). Article 16(4A) was incorporated permitting reservation in promotions but restricting the same to Scheduled Caste (SC) and Scheduled Tribes (ST).
After the Constitution (103rd Amendment) Act, 2019, clauses 6 and Articles 15 and 16 were inserted to provide for a further 10% reservation in jobs and educational institutions to economically backward sections in the general category.
Can courts direct the State to provide reservation to SC/ST or backward classes?
No. It has been held in a body of judgments of the Supreme Court that directions cannot be issued to the State to give reservation to any class of citizens.
Starting 1963, several rulings have emphasised that Articles 15(4) and 16(4) are enabling provisions and do not confer any right on SC/STs, OBCs or any other group of citizens to demand reservation as a matter of right, and thus, no such directive can be issued to the State by the courts.
In MR Balaji Vs State of Mysore, 1963, for instance a five-judge bench underscored: “It is necessary to emphasise that Article 15(4) like Article 16(4) is an enabling provision....” This judgement also held that caste cannot be the sole and dominant test for determining social backwardness and that reservations made under Article 15(4) should be reasonable and less than 50%. These judgments drive home the point that although the State has been given the authority to provide for reservation, such decisions are amenable to judicial review.
Can a law be framed for reservation on domicile?
Yes, but only by the Parliament. Article 16(3) in the Constitution empowers Parliament to provide for domicile-based reservation in public employment and jobs with local or any other authority under a state or a Union Territory.
Exercising this power, in 1957, the Centre passed The Public Employment (Requirement as To Residence) Act to repeal all existing laws in a state or a Union Territory that prescribed requirements as to residence (domicile) for public employment. The Centre, however, reserved its right to lay down rules in respect of certain classes of public employment in certain areas of some states such as Manipur, Tripura, Andhra Pradesh and Himachal Pradesh. But this power with the Central government is also not unfettered, as was made clear by a judgment of the Supreme Court in 1969 when a constitution bench of the Supreme Court in AVS Narasimha Rao Vs State of AP declared that the law enacted by Parliament under Article 16 (3), making a special provision for domicile within the Telangana region of the State of Andhra Pradesh for the purpose of public employment, was ultra vires (without power under) the Constitution. It ruled that even Parliament cannot use the power under Article 16(3) to provide for domicile-based reservation in a particular part of the state and that the entire state must be the venue for residential qualification.
Do state governments have any specific power to make laws/policies for domicile-based reservation?
No. When the reservations of certain percentage of seats in medical colleges in favour of candidates from rural areas was sought to be justified on economic considerations, a three-judge bench of the Supreme Court, in State of Uttar Pradesh Vs Pradip Tandon (1974) emphatically rejected the plea. In Dr Pradeep Jain Vs Union of India, 1984, the top court dealt specifically with the issue of domicile-based reservation, noting that to regard an individual from one state as an outsider in another state “would be to deny him his constitutional rights and to derecognise the essential unity and integrity of the country by treating it as if it were a mere conglomeration of independent States.”
Can a state make it legally contingent for a private sector firm to reserve jobs for local residents?
The Act mandates all private establishments in Haryana to provide 75% of new jobs to local candidates. Under Article 19(1)(g), all citizens have a fundamental right to practice any profession, or to carry on any occupation, trade or business as a fundamental right. By mandating private institutions to employ a certain set of candidates, the Act constricts their right to carry on their occupation freely, which will be a major basis of challenges to the law.
The 93rd Constitutional Amendment Act was passed in 2005 to allow the State to make provisions for the advancement of socially and educationally backward class of citizens or SC/ST in matters relating to admission in private educational institutions.But this does not give power to the State to make such provisions for employment in private institutions . Private firms will likely claim that the law effectively interferes with their constitutional rights to carry on their trade freely, especially when they do not receive any sops from the government and the law also fails on constitutional touchstone.