Haryana State Job Reservation - Is it Constitutional!!!

 Haryana State Job Reservation

Is it Constitutional!!!

Recently we found Haryana State making efforts to assure more job opportunities to it's local people, by introducing the Haryana State Employment of Local Act 2020, followed by The Haryana State Employment of Local Act 2021.

I believe that any state law providing for reservation in private establishments on the basis of residence may not be constitutional, by the virtue of Article 19(1)(g), still the Haryana State Employment of Local Act, 2021 Act seeks to reserve 75% of new jobs for local candidates in private establishments. Reservation to the extent of 75% may violate the guidelines laid down by the Supreme Court.

Over the last five years, we have noticed many other states have also announced or taken measures to provide reservation in employment for local residents and stayed its implementation  

Measures taken by states for providing reservation in employment (last five years)
State	Year	Bill/Act	Reservation
Haryana	2020	The Haryana State Employment of Local Act 2021	75% reservation for locals in private industry
Andhra Pradesh	2019	Andhra Pradesh Employment of Local candidates in the Industries/Factories Bill, 2019	75% reservation for locals in industry/factories (including PPP mode)
Karnataka	2016	Draft - Karnataka Industrial Employment (Standing Orders) Rules (Amendment) 2016	100% reservation for locals in blue-collar jobs (draft)
Rajasthan	2019	Rajasthan (Backward Classes Amendment Bill, 2019)	5% reservation to certain communities
Maharashtra	2018	Maharashtra (Socially and Educationally Backward Classes (SEBC) Act, 2018	13% reservation to certain communities
Telangana	2017	Telangana (Backward Classes Scheduled Castes and Scheduled Tribes Act 2017)	Reservation for backward classes, SC and ST increased to 62%

Reservation Provision by the Constitution of India :-  

• Article 16(3) - The Constitution provides our Parliament the power to make a law regarding employment to an office under the State providing requirements such as residence within that state
• Article 15(4) - The State may make provisions for the advancement of socially and educationally backward class of citizens or Scheduled Castes and Scheduled Tribes
• Article 16(4) - The State can make provisions for reservation of appointments or posts in favour of any backward classes of citizens who are not adequately represented in the services of the State.

As all citizens of India have a fundamental right to practice any profession, or to carry on any occupation, trade or business as a fundamental right. Mandating private institutions to employ a certain set of candidates may encroach upon an institution’s right to carry on its occupation.

Reservation in employment to the extent of 75% may violate the guidelines laid down by the Court -  In 1992, the Supreme Court laid down guidelines restricting the ambit of reservation provided through Article 16(4) for backwardness - ref - Indra Sawhney and Ors. vs Union of India and Ors. (1992), AIR 1993 SC 477.

Employer to Claim Exemption from Providing Reservation  to Local Residence

The Act allows an employer to claim exemption from providing reservation if adequate number of local candidates of desired skill, qualification, or proficiency are not available. However, this exemption will be granted based on the decision of the designated officer.

The designated officer may also direct the company claiming an exemption to train local candidates in the required skills. This will lead to additional costs for the private companies. 

This is to be noted that breaching any provision of this Act is punishable with a penalty between Rs 10,000 and Rs 50,000, with an additional penalty for every day till the contravention continues.

In conclusion, I must say that The Haryana State Employment of Local Act 2021 in burden for employer & not in good health to ease of doing business & ease of doing compliance