The Punjab & Haryana High Court on Friday struck down the 75% quota for locals in private sector in Haryana, calling it unconstitutional. The Haryana State Employment of Local Candidates Act, 2020 made a provision for reservation of 75% jobs with monthly salary upto ₹30,000 in the private sector, but the high court said that Private employers can’t be forced to employ persons from a particular state.
The bench of Justice G.S. Sandhawalia and Justice Harpreet Kaur Jeewan of the High Court said that the “law is unconstitutional and violative of the part-III of the Constitution.” The court accordingly allowed a batch of petitions challenging the law reserving 75% private jobs for locals in Haryana, saying that the state law violates Article 19 of the constitution.
The law was introduced in 2020, saying that the influx of a large number of migrants competing for low- paid jobs placed a significant impact on local infrastructure and housing, which led to proliferation of slums, which further causes environmental and health issues. The law stated that giving preference to local candidates in low-paid jobs is socially, economically and environmentally desirable and in the interests of the general public.
Several petitions were filed against the law, stating that it amounted to introducing reservation in the private sector. Faridabad Industries Association stated that it was 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. Its petition had stated that the move was not reasonable and it was arbitrary, capricious, excessive and uncalled for.
The petitioners also argued that the Act is contrary to the principles of justice, equality, liberty, and fraternity laid down in the Preamble of the Constitution. Further, the Act is contrary to the right to equality enshrined in Article 14 and Article 19 of the Constitution. After hearing the arguments, the court had reserved the verdict on 19th October.
In the verdict delivered today, the court agreed with the petitions, and ruled the law unreasonable and unconstitutional. The court stated that the state cannot discriminate against the individuals on account of the fact that they do not belong to a certain State and have a negative discrimination against other citizens of the country.
The court in its order said, “The private employer being a builder, for example, raising a multi-storeyed complex, cannot be asked not to employ a person who is skilled in the work of installation of wood work who might come from a particular area of the country i.e. Kashmir; where this skill has been enhanced, whereas from another part of the country, labour which is more skilled in setting up the steel frames and building are found i.e. Punjab; whereas similar persons with different skills who would be more proficient in just executing the civil work i.e. Uttar Pradesh and Bihar”
The high court ruled that the state can’t direct the private employer who it has to employee keeping in view the principles of laissez faire that “the lesser it governs, the better itself”.
“Once there is a bar under the Constitution of India, we do not see any reason how the State can force a private employer to employ a local candidate as it would lead to a large scale similar state enactments providing similar protection for their residents and putting up artificial walls throughout the country, which the framers of the Constitution never envisaged,” the court said.
The judgement added that the law imposes unreasonable restrictions regarding the right to move freely throughout the territory of India or to reside and settle in any part or the territory of India. It said, “while referring to Article 19(6), it can be said that the right of the State is regarding the provisional or technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business to restrict the right under Article 19(l)(g) or to carry on any trade, business, industry or service exclusively by the State or its Corporations to the exclusion of other citizens. It can, thus, be said that the Act as such cannot be said to be reasonable in any manner and it was directing the employers to violate the constitutional provisions.”
The high court judgement stated, “the restrictions imposed upon all types of private employers as defined under Article 2(e) are gross to the extent that a person’s right to carry on occupation, trade or business is grossly impaired under Article 19(l)(g) of the Constitution of India. The requirement to register any employee on the designated portal within three months who was being paid less than Rs.30,000/- per month upto 75%, thus, is violative of the fundamental rights protected under the Constitution of India.”
#BREAKING State cannot discriminate against individuals because they belong to some other States.
— Live Law (@LiveLawIndia) November 17, 2023
Private employers can't be forced to employ persons from a particular state – Punjab & Haryana High Court while striking down #Haryana's 75% domicile quota in pvt sector. pic.twitter.com/bj4IJnJRej
The court added that the control of the State by a designated officer having a right to consider the cases of exemption to reject them are onerous. It added, “The requirement of submitting quarterly reports and the power of the Authorized Officer to call for records and to inspect premises for purposes of examining the records, registers and documents by just giving one day prior notice as such are conditions which can be termed as the “Inspector Raj” of the State.”
It further said, “The private employer, thus, has been put under the anvil of the State as to whom to employ and the penalties which are liable to be imposed on contravention which have already been noticed which multiply on account of any violations apart from leading to criminal prosecution by filing of a complaint. The bar under Section 20 of not being able to challenge the legal proceedings in any Court against any Authorized Officer or designated officer further ties the hands of the employer.” It is notable that the The Punjab & Haryana High Court had issued an interim order staying the implementation of the Act in 2022. But that interim order was set aside by the Supreme Court, asking the High Court to expedite the hearing into the merits of the act.
