Haryana Private Sector Job Reservation: Constitutional Implications and Drawbacks

Job Reservation Controversy in Haryana: High Court Scraps State’s Employment Act

• Violation: The court completely scrapped the Haryana State Employment of Local Candidates Act, 2020 as it violated Articles 14 and 19 of the Constitution.
• Petitioners: Several industrial associations had moved in court against the law, stating that the state did not have legislative competence under Article 35 for enacting this law.
• Manifesto Promise: Providing 75 percent Job reservation in private sector for state-domiciled candidates was one of the electoral promises of the JJP, which is part of the ruling alliance in the state.

Key Provisions of Haryana’s Job Reservation Act for Local Candidates in Private Sector

• Application: The law applied to private sector companies, societies, trusts, limited liability partnership firms, partnership firms, and any person employing 10 or more persons on salary, wages, or other remuneration for manufacturing, carrying on business, or providing any service in Haryana.

• Time Duration: The law would be applicable for a period of 10 years.
• Salary Ceiling: The law will apply for local candidates for all jobs with a salary below Rs 50,000 per month. 
• Exemption: Private sector entities could claim exemption if candidates of desired skill are not available in the state.
• Penalties: Failure to implement the act will attract a fine between Rs 50,000 and two lakh rupees, with an additional penalty of Rs 1,000 for each day till the violation continues. 

Framework and Evolution of Reservation in Public Employment in India

• Public Employment: Reservation in public employment was confined to Scheduled Castes and Scheduled Tribes but got extended to Other Backward Classes as well on the basis of the recommendations of the Mandal Commission.
  • The Mandal Commission recommended providing 27% reservation to Other Backward Classes in central services and public sector undertakings, over and above the existing reservation.
• Constitutional Provisions: Reservation is not a fundamental right. Even though the constitution mandates non-discrimination in public employment, the state can provide for advancement of certain sections of the society through reservation in education or employment.  
  • However, this reservation may be on the basis of domicile (residence), or backwardness.  
  • The Parliament has the power to make a law regarding employment to an office under the State providing requirements such as residence within that state (under Article 16(3)). 
  • The State may make provisions for the advancement of socially and educationally backward class of citizens or Scheduled Castes and Scheduled Tribes (under Article 15(4)). 
  • The State can make provisions for reserving posts for any backward classes of citizens who are not adequately represented in the services of the State (under Article 16(4)).  

Implications and Challenges: Job Reservation in Private Sector in India

• Violation of Supreme Court guidelines: The law of providing 75% job reservation may violate the guidelines laid down by the Supreme Court, which has said that domicile cannot be the sole criteria for job reservation.
• Financial Efficacy: Efficacy of private establishments could be affected if there are constraints in making appointments from outside state.
• Fundamental Rights Violation: The job reservation in private institutions may violate their right to carry on an occupation or business.
• Shifting of Business: Business and private sector institutions would be forced to relocate to another jurisdiction due to such laws.
• Salary Caps: In order to overcome the provisions of the law, private companies may resort to putting a cap on employee salaries.
• Promote Regionalism: Job Reservations in the private sector may further increase regionalist tendencies among citizens and reduce nationalism. 

Landmark Judicial Decisions: Shaping the Landscape of Job Reservation in India

• Indira Sawhney Case (1992)
  • In this case, the apex court validated the constitutionality of the 27% reservation but put a ceiling of 50% in reservation in public employment.
  • The court also suggested that advanced sections among the OBCs (the creamy layer) should be excluded from the list of beneficiaries of reservation.
• M Nagraj Case (2006)
  • The Supreme Court upheld the constitutional validity of 77th Amendment, which allowed the state to make provisions for reserving posts for any backward classes of citizens who are not adequately represented in the services of the State.   
  • The court added that the creamy layer among Scheduled castes and tribes is to be excluded from the reservation.
• Janhit Abhiyan (EWS) Case (2022)
  • The Supreme Court has upheld the validity of the 103rd Constitutional Amendment which provides 10% reservation for the Economically Weaker Sections (EWS).
  • The court added that the EWS quota does not violate 50% ceiling imposed on reservation as the quota is within the non-reserved category.

State-wise Initiatives: Private Sector Job Reservation Across India