Why HC has Struck Down Haryana’s Private Sector Quota

What’s in Today’s Article?

• Why in News?
• What was the Haryana State Employment of Local Candidates Act 2020?
• Why was the Law Challenged and What was the Govt’s Argument?
• What did the High Court Rule?
• Similar Cases and What Happens Now

Why in News?

• The Punjab and Haryana High Court (HC) quashed a law (The Haryana State Employment of Local Candidates Act 2020) passed by the Haryana government in 2020 that provided 75% reservation in private jobs to residents of the state.
• According to the HC, a government cannot discriminate against individuals simply because they do not belong to that state.

What was the Haryana State Employment of Local Candidates Act 2020?

• The law enacted by the Haryana government reserved 75% of jobs in the private sector that offered a monthly salary of less than Rs 30,000 (originally Rs 50,000) for residents of Haryana.
• All companies, societies, trusts, limited liability partnership firms, partnership firms, and large individual employers were covered under the Act.
• Any person employing 10 or more people on salary, wages, or other remuneration for manufacturing or providing any service, as well as any entity that may be notified by the government, were included.
• However, central or state governments or organisations owned by them were kept outside the ambit of the Act.
• Employers could apply for an exemption under the Act, but that entailed a long procedure and required government-appointed officers to believe that the employer’s exemption request held merit.

Why was the Law Challenged and What was the Govt’s Argument?

• The Faridabad Industries Association and others went to court, contending that the Haryana government wants to introduce a policy of “sons of the soil”, which infringes the constitutional rights of employers.
• The petitioners argued that private sector jobs are purely based on skills and an analytical bent of mind, and employees have a fundamental right to work in any part of India.
• Therefore, forcing the employers to employ local candidates in the private sector violates the federal structure framed by the Constitution of India.
  • The government cannot act contrary to public interest and cannot benefit one class.
• The Haryana government argued that it had the power to create such reservations under Article 16(4) of the Constitution.
  • Article 16(4) says that the right to equality in public employment does not prevent the State from making reservation of appointments or posts in favour of any backward class of citizens.

What did the High Court Rule?

• The court held the law is violative of Part III of the Constitution (Fundamental Rights) and declared it to be ineffective “from the date it came into force”.
• The court noted that the provisions (which required employers to submit quarterly reports and which authorised officers to call for documents or verification) of the Act amounted to “Inspector Raj”.
• The court ruled that the state’s action amounted to exercising “absolute control over a private employer”.
• These restrictions violate a person’s right to carry on occupation, trade, or business under Article 19(1)(g) of the Constitution.

Similar Cases and What Happens Now

• Earlier, the Andhra Pradesh Employment of Local Candidates in the Industries/Factories Bill 2019, was challenged in the Andhra Pradesh HC, which observed that “it may be unconstitutional”.
  • However, the challenge to the law (which reserves 3/4th of jobs for local candidates within 3 years of the commencement of the Act) is yet to be heard on merits.
• The quota was a key promise of Deputy CM’s Jannayak Janata Party before the 2019 Assembly elections.
  • He has said that the Haryana government would not give up: “We will move the Supreme Court and file an SLP (Special Leave Petition) after thoroughly examining the HC order.”

Q1) What is the 103rd Amendment to the Indian Constitution?

The 103rd Amendment inserted Articles 15(6) and 16(6) in the Constitution to provide up to 10 per cent reservation to the economically weaker sections (EWS) among non-OBC and non-SC/ST sections of the population.

Q2) What are the affirmative actions policies in India?

Affirmative action in the form of reservation policies increases the chances of getting admission in educational institutions and public employment for the socially and educationally backward classes (SCs, STs, OBCs) in India.

Source: Why HC has struck down Haryana’s private sector quota, and what happens now