MC Explainer: Haryana jobs quota law, the controversy and the legal tangle around it

The Supreme Court is set to hear a petition filed by the Haryana state government urging it to vacate the stay on a legislation on job reservations for locals, by the Punjab and Haryana High Court. While the state believes that it is an important welfare mechanism for its own people, employers believe that it is discriminatory, hampers talent sourcing and is against the federal structure of the country. Moneycontrol explains the Haryana jobs quota, the controversy and the legal tangle around it.

What is the Haryana Jobs quota law and what does it entail?

The Haryana State Employment Local Candidates Act 2020 was notified on November 26, 2021, and sought to provide 75 percent reservation for local candidates in private sector jobs that offer a salary of less than Rs 30,000 per month. The Act came into effect on January 15, 2022. The act that extends to the whole of the state applies to all the “Companies, Societies, Trusts, Limited Liability Partnership firms, Partnership Firm” etc. in the state as may be notified by the government, from time to time.

How do the industries view the legislation and why do they believe that it is discriminatory?

Industries believe that the legislation is partial, not viable and hampers investment climate in the state, known from its industrial belts, auto hubs, cosmopolitan townships, and a vibrant startup ecosystem. Industry body Confederation of Indian Industries (CII) in March 2021 had said that reservation affects productivity and industry competitiveness. “We hope the state government of Haryana relooks at the legislation,” CII had said then.

Industries and some experts separately also argue that it may encourage other states to put in place similar restrictive laws. And this will lead to lack of talent mobility, an upper hand to local residents, and may also lead to workers’ confrontation with managements. They also argue that it may negatively impact productivity and competitiveness.

Why did the industry associations move the High Court and on what grounds?

Advocate Siddharth Dias representing the Employers Association of Delhi as well as some industries operating in Haryana has submitted in the Punjab and Haryana High Court last week that the Act is unconstitutional on account of being extremely vague and arbitrary. “Moreover, the Authorized Officers appointed under the said Act were given wide discretion; capable of misuse. It was also averred that the Act is applicable to all diverse nature of employments and therefore, not based upon an intelligible differentia and rational classification, thus was ultra vires of the Constitution,” Dias said.

A couple of more industry associations too had moved the high court. Industry associations claim that the Act is contrary to the very idea of common citizenship for the Union of India and that it fails to uphold the federal structure of the country.

What the petition of the Haryana government in the Supreme Court says?

The Haryana government wants a vacation on the stay order of the High Court. The state has argued that the Division Bench of the HC admitted multiple petitions against the implementation of the Haryana State Employment of Local Candidates Act, and stayed the law within minutes.

The writ petition of the state in the apex court says the “honourable High Court without affording an effective hearing to the state and without hearing the law officer appearing for the state – in the hearing which lasted only one minute and 30 seconds has stayed the operation of the Haryana State Employment of Local Candidates Act, 2020”.

(Shruti Mahajan of Moneycontrol contributed to the story)