Local Employment Bill | Good or Bad for you?

In 2020, the state of Haryana passed the controversial Haryana State Employment of Local Candidates Bill, which sparked a  debate among the industry and the citizens. Not just Haryana, recently many state governments have passed such laws, many states have tried implementing the quotas previously as well. Let’s discuss the idea and the future of the local employment bill. 

Deja Vu!

Haryana is not the first State to introduce a law of this kind. Many states have tried implementing the quotas previously. The history of domicile-based preferences goes back to the 1970s, when States like Tamil Nadu, Andhra Pradesh and Maharashtra directed employers to employ local residents and circulars were issued by the government to this extent.

1995: Gujarat introduced an 85% reservation for locals but could not enforce it.

2008: Maharashtra introduced an 80% reservation for locals in industries that seek state incentives and tax subsidies, even though it was not legislated.

2016: Karnataka tried to put in place a 100% reservation for blue-collar jobs in sectors other than biotech and infotech in 2016.

Tamil Nadu also sought a reservation of 50% for locals, which hasn’t been implemented. 

Madhya Pradesh and Telangana have also experimented with such reservations for locals in private sector jobs.

Causes for Migration

Source: India Today

Source: Mint

Implementation and Challenges 

Such job quotas, while having been permitted by the Supreme Court earlier, have been restricted to the public sector, with a cap of 50% of jobs for locals.

In the private sector, these laws remained on paper only due to the effectiveness of such steps due to the absence of a talent pool required for skilled jobs. They also create friction among locals and non-locals in the implementing states and against the residents of that state in the other states.

Moreover, imagine you would need a permit to work in a different state despite being a citizen of the same country. Does it make any sense?

Constitutional Validity

Such acts of Government, including the recent Haryana Reservation law that is awaiting notification by the State Government is flawed from the prism of the constitution.

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):  Clearly prohibited discrimination based on place of birth. 

Article 19(1)(e) & Article 19(1)(f):  Such laws infringe the rights of the citizens belonging to other states on the right to reside and settle in any part of the territory of India and with that is the right to practice any profession, or to carry on any occupation, trade or business.

Article 16(3): The decision about reservations in public employment on the basis of place of birth can be taken only by the Parliament of India and not any legislature within a state.

Legal precedence behind such reservation of jobs

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.

Do they fix the unemployment problem?

Reservations for locals is being promoted as a way of enhancing local employment. However, it is bad economics not just for the state but for the nation as well. Employment is created by employers. As an industrialist, where would you choose to invest? In a state where you are  restricted in who you can employ? Or in a state where you can employ whoever is best suited to the job?

Adding fuel to the fire, is the issue of compliance. Reservation in private sector jobs, gives labour officers unbridled powers to implement the Act. Companies have to submit quarterly reports of compliance furnishing details of who was employed and so on. It is far from the idea of ease of doing business and goes back to the era of ‘inspector raj’. 

Then who will this benefit?

The consequences of this new law are far beyond constitutionality. It is an attempt to achieve narrow political goals. Owing to the lack of practicality and unconstitutional grounds, the Governments in all probability know it will be struck down sooner or later.  Yet they have still proceeded to make the Bill an Act. But as the new law gets struck down in due course, it shall stoke flames of regionalism that will benefit only the political leaders. 

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