Haryana’s 75% Quota to Locals in Private Sector

Syllabus: GS2/ Indian Constitution, GS1/ Social Justice

In Context

• Recently, the Punjab and Haryana High Court quashed a law providing 75% quota to locals in the private sector.

About the Haryana State Employment of Local Candidates Act, 2020

• The law provided for 75% of the new employment to be given to local candidates for jobs having a salary of less than ₹30,000 per month in various privately managed companies, societies, trusts, limited liability partnership firms, partnership firms, etc. situated in Haryana.
• Other States such as Andhra Pradesh and Jharkhand have also enacted similar legislation.

Rationale behind the legislation

• Shift of jobs:
  • There is resentment among locals in better-off States over their jobs being taken up by “migrant” workers and which has compelled their governments to come up with such protectionist measures. 
• Segmentation of the labour market: 
  • There are more than a few private employers who exploit the migrant labour market as such workers tend to work long hours for low wages with little or no social protection and benefits. 
  • This creates a segmentation of the labour market with low-wage migrant workers on the one side and local workers with better bargaining power on the other. 
• Responsibility of private players:
  • Immunity to the private sector from the constitutional responsibility of removing discrimination has become the biggest bane in post-liberalisation India. 
  • The private sector has assumed the primary role of employer without much social responsibility or constitutional mandate.
• Role of privatisation:
  • Social justice movements have increasingly feared that increasing privatisation may lead to a complete decline of opportunities for the historically marginalised caste groups.
  • More than 1 lakh jobs, otherwise reserved for the Scheduled Caste and Scheduled Tribe communities, had been lost due to privatisation.
• Way out from limitations:
  • Job reservations for the local population are seen as a solution to the state’s infrastructural and environmental problems. 

Court’s judgment:

• Beyond state’s purview: 
  • The court stated that it was beyond the purview of the State to legislate on the issue and restrict private employers from recruiting people from the open market. 
• Violative of Rights:
  • It also held that the Act violated equality guaranteed under Article 14 and freedom under Article 19 of the Constitution. 
  • The court said that by allotting 75% reservation for “locals”, the Act militates against the rights of citizens of the rest of the country, and that such acts could lead to other States coming up with similar enactments, in effect putting up “artificial walls” throughout India. 
• Unreasonable restrictions: 
  • It argued that the Act was imposing unreasonable restrictions on workers’ right to move freely throughout the territory of India. 
  • The court termed the requirements on private employers stipulated in the Act as akin to those under “Inspector Raj”.

Other criticisms:

• Affecting Economy: 
  • Workers move to other States seeking job opportunities that are relevant to their skills and abilities. 
  • If States build walls and impose restrictions that prevent job seekers from other States from accessing opportunities, citizens of poorer States will have to eke out a living within their own regions. 
  • This will affect the economy of the entire country. 
• Pressure on the poor: 
  • Ironically, it is the poor migrant who takes the hit.
  • Such laws seek to exclude only those migrant workers who work in jobs that pay below a designated monthly wage. 
• Creation of anti-migrant sentiment: 
  • In addition to conflict over employment and lack of job creation, environment and climate change cloak the anti-migrant sentiment of nativist legislation. 

Way ahead

• States should ensure that migrant workers in all establishments enjoy basic labour rights that are legally due to them, thereby creating a level playing field for all workers. 
• This will also be a curb on exploitative practices by employers. Protectionism in the labour market is not the answer.