States announce reservations for locals, but fail to implement it

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On Wednesday, the Jharkhand assembly passed the Jharkhand State Employment of Local Candidates Bill, 2021 becoming the third state in the country, after Andhra Pradesh and Haryana, to pass a law which promises reservations for locals in private jobs. The law, originally tabled in the assembly’s budget session in March, accords 75% reservation to locals in jobs, with the caveat that this will apply to those who earn 40,000 or below.

While Jharkhand may have taken the plunge this September, the idea is gaining traction across states, driven by issues of scarcity of employment, and the need for governments to satisfy their domestic electorate.

The Dravida Munnetra Kazhagam (DMK) has promised reservation akin to this in their manifesto, while Madhya Pradesh and Maharashtra have spoken of it as well, with governments promising that the law is around the corner. In other states, there have been policy decisions reserving a segment of jobs for locals in states such as Karnataka and Gujarat, but these have rarely been implemented. Haryana has not yet implemented the law, and neither has the path to implementation been smooth in Andhra Pradesh, with handicaps in convincing industry, and questions of whether they pass legal muster.

The Andhra story

The Andhra Pradesh Employment of Local Candidates in the Industries and Factories Act was passed in the state assembly first, on July 17, 2019. The law mandates 75% reservation for locals in both existing and upcoming industries, with existing industries that want to recruit afresh given three years to implement the rules in spirit and action. The law has provisions that a company be exempted if it writes to the government that it requires specialised manpower not available locally, but this will require an examination by the state industries department.

“The intention was local empowerment, as we are a newly formed state, and wanted local jobs for people so that they don’t start looking at other places. It depends from industry to industry. Some might need more experts, so we are asking industries to tell us what skill sets they need. The government can train people and supply the requirements as well,” said Abbaya Kothati Chowdary, YSR Congress Party legislator and spokesperson.

Chowdary refuted the charge that these laws simply pander to their domestic constituencies. “It will not give us any political mileage. The government is taking the burden of training people and we wanted new industrialists to come in. There is still a 25% provision for non-local jobs. On a case-by-case basis, if someone needs more non-locals, then it can be done. From day one we are saying that the government is flexible,” Chowdary maintained, when asked if the law is fair.

However, industry is unhappy. A former head of the Federation of Andhra Pradesh Chamber of Commerce and Industry, who did not want to be quoted, said that the state government should first draw out a road map to bring in more industries and then talk about local jobs.

“When your policies don’t get in enough industries, why talk about jobs? It is purely a political gimmick. There are no sops and no rebates for investors. The first step should have been to have a five year plan. Today what is happening is that most of the unskilled labour is from east India. Be it construction or anything else, many workers come from that side,” he added.

The law has faced a legal challenge too in the Andhra Pradesh High Court, where it has been challenged on the grounds that it violates Article 16(2) and 16(3) of the constitution. Article 16(2) states, “No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect or, any employment or office under the State.”

Article 16(3) says, “Nothing in this article shall prevent Parliament from making any law prescribing, in regard to a class or classes of employment or appointment to an office under the Government of, or any local or other authority within, a State or Union territory, any requirement as to residence within that State or Union territory prior to such employment or appointment.” Senior officials in Andhra Pradesh have said that while there is no stay, the case is subjudice.

The debate in Haryana

More than a year later, after it was one of the primary planks of Dushyant Chautala’s outfit with which the Bharatiya Janata Party formed a coalition, the Manohar Lal Khattar led Haryana government passed a law which provides for 75% reservation in private sector jobs to those having a resident certificate (domicile). The law will be applicable for a period of 10 years.

In Haryana, an ordinance was first approved by cabinet in July 2020, which was reserved by the Governor for consideration of the President. Though the ordinance was withdrawn by the cabinet in October, the Union Labour and Employment Ministry which examined the ordinance had advised the state government against enacting such a law, with legal experts saying that the new law would not withstand judicial scrutiny.

Issues raised by the Law and Legislative Secretary during the vetting of the proposed law still hold good, legal experts said. The argument they made was that a clause in the law providing for preference in jobs to the local candidates domiciled in Haryana was in contravention of Article 14 of the Constitution, pertaining to equality before the law, and Article 19 (1)(g), which provides for protection of certain rights to practice any profession, or to carry on any occupation, trade or business.

Former Haryana advocate general, Ashok Aggarwal said that domicile can never form the basis of employment. Aggarwal said, “If public employment cannot be given on the basis of domicile, how can private jobs be given this way? The government is not the employer in private sector jobs,” he said.

The legal challenge

Experts have also pointed to a Supreme Court order in 1984, by Justices PN Bhagwati, Amarendra Nath and Rangnath Misra, which held that the word domicile “is to identify the personal law by which an individual is governed in respect of matters such as essential validity of a marriage, its effect on proprietary rights of husband and wife, jurisdiction in divorce, nullity of marriage etc”.

The court had said, “If India is one national and there is only one citizenship, “every citizen has a right to move freely throughout the country and to reside and settle in any part, irrespective of the place where he is born or the language which he speaks or the religion which he professes and he is guaranteed freedom of trade, commerce and intercourse throughout the country and is entitled to equality before the law and equal protection of the law with other citizens in every part of India, it is difficult to see how a citizen having his permanent home in Tamil Nadu or speaking Tamil language can be regarded as an outsider in Uttar Pradesh or a citizen having his permanent home in Maharashtra or speaking Marathi language be regarded as an outsider in Karnataka. He must be held entitled to the same rights as a citizen having his permanent home in Uttar Pradesh or Karnataka, as the case may be. To regard him as an outsider would be to deny him his constitutional rights and to de-recognize the essential unity and integrity of the country by treating it as if it were a mere conglomeration of independent states.”

Perhaps, this explains the reticence of state governments such as Maharashtra, which promised a legislation to make 80% reservation for locals in private firms mandatory but the bill was never tabled. Industries minister Subhash Desai had that the government would bring a bill in the budget session of March 2020. Both the Shiv Sena and the Nationalist Congress Party had promised reservation in their 2019-Assembly poll manifestos.

Apart from this, the Maharashtra state government has, from time to time, issued government resolutions, the latest in 2014, directing the private firms to employ at least 80% locals. However, symbolic of the challenges, both in terms of principle and implementation that this form of reservations have faced, these have barely taken off the ground. Though the responsibility is with district collectors, no strict implementation is done due to paucity of the staff with the industries/labour departments, said officials from industries department.

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