Haryana Law on Local Hiring


    In News

    • The Haryana State Employment of Local Candidates Act, 2020, provides 75% reservations to local people in private-sector jobs.
      • This reservation is only applicable for jobs that offer a salary of less than Rs 30,000 a month. 
    • The law can trigger an exodus of large domestic and multinational investors across various sectors.

    About Haryana State  Employment of Local Candidates Act, 2020

    • The law covers the whole of the State and will be in effect for 10 years.
    • It will be applicable to: 
      • all the Companies, Societies, Trusts, 
      • Limited Liability Partnership firms, Partnership Firm,
      • any person employing ten or more persons and 
      • an entity, as may be notified by the Government, from time to time.
    • The compliance time period would be 3 months.
    • In the case of non Compliance, a fine between ?25,000 and ?1,00,000 would be levied.
    • The benefits of the law could be availed by those who have the domicile.
      • The candidates need to register on a designated portal from which recruitments will be done.

    Reservation in Private Jobs in other states

    • Madhya Pradesh (70% reservation to locals)
    • Andhra Pradesh (75% private jobs reserved)
    • Karnataka (70% of private Jobs and 100% Government Jobs reserved)
    • But their validity is being challenged before the Supreme Court and high courts and an authoritative ruling is awaited.

    Constitutional Provisions

    • Article 16 and Article 371 mentions the Reservation in jobs.
    • Article 16(3)
      • Provides for an exception by saying that Parliament may make a law “prescribing” a requirement of residence for jobs in a particular state. 
      • This power vests solely in the Parliament, not state legislatures
      • Public Employment (Requirement as to Residence) Act, 1957 was passed by Parliament to abolish Residence as criteria for job.
      • Few exceptions were made for Andhra Pradesh, Manipur, Tripura, and Himachal Pradesh.
    • Article 371:
      • Some states have special protections under Article 371. 
      • Andhra Pradesh under Section 371(d) has powers to have “direct recruitment of local cadre” in specified areas. 

    Need of Reservation for Locals in Private Job

    • High Unemployment rate:
      • As per the Centre for Monitoring India Economy, in February the unemployment rate in Haryana was over 26%.
        • Against a national average of less than 7%.
    • Loss of Livelihood of Locals:
      • With the growth in industries, the pressure of displacement is always on the locals 
      • They suffer due to land acquisition and loss of agricultural opportunities.
      • It was the argument forwarded by Andhra Pradesh.
    • Prime Victims of Pollution:
      • The locals are the first victims of pollution or industrial hazards and hence they should have first right over jobs.
    • Reservations are granted on other Grounds like Caste, Gender:
      • The locals who suffer from industrialisation also need to be brought into the net of positive discrimination.
    • Responsibility of Democratic Government towards their Citizens:
      • The objective is to empower the local youth by giving them better jobs.
    • National Monetisation Pipeline (NMP):
      • Rising privatisation and a push for NMP, such legislation would be a windfall.
      • The private sector uses public infrastructure in many ways like subsidized allotment of land, tax exemptions etc. 
      • The state has a legitimate right to require them to comply with the reservation policy.

    Constitutionality of the Law

    • Private sector can challenge the law’s effectiveness as it interferes with their constitutional rights to carry on their trade freely.
      • Violation Of Article 14 
        • Which ensures equality before the law or the equal protection of the laws within the territory of India.
      • Articles 16(1) and 16(2)
        • It prohibits the state from discriminating against any citizen on grounds of religion, race, caste, sex, place of birth.
    •  State governments have time and again given the following arguments.
      • Article 16(2)
        • As the language is not mentioned as criteria of non-discrimination, states have mandated knowledge of State Language.
      • Constitution Talks about Government Jobs
        • As per Haryana Government, the law is constitutional as it deals with jobs in Private Sector.

    Judicial verdicts

    • Dr Pradeep Jain v Union of India, 1984:
      • Legislation for “sons of the soil” was termed unconstitutional but did not expressly rule on it as the case was on different aspects of the right to equality.
    • Sunanda Reddy v State of Andhra Pradesh, 1995:
      • The Supreme Court asked to strike down the policy that gave 5% extra weightage to candidates who had studied with Telugu as the medium of instruction.
    • Appointment of Government teachers in Rajasthan:
      • The Supreme Court invalidated the appointment of government teachers in Rajasthan in 2002 
      • In which the state selection board gave preference to “applicants belonging to the district or the rural areas of the district concerned”.
    • UP Subordinate Service Selection Commission case :
      • In 2019, the Allahabad High Court struck down a recruitment notification by the UP Subordinate Service Selection Commission (UP SSSC).
      • The UP SSSC notification prescribed preference for women who are “original residents” of the UP alone.

    Global Practice

    • Many countries allow such reservations in private jobs. 
    • The US Civil Rights Act of 1964 allows the courts to order monetary damages and relief, for victims of discrimination (local people).
    • The Employment Equity Act in Canada also protects minority groups from job deprivation. 
      • Protecting natives from discrimination in all the federally regulated industries, even in the private sector.


    • Poor Ease of Doing Business:
      • Companies and Assocham have raised concerns regarding difficulties in hiring the right talent at the right pay due to such steps.
    • Profit Margins shrink:
      • Due to Suboptimal Human resources, productivity and profit margins go down.
      • Companies may move out or not invest any further thus causing even more job loss for locals than before.
    • Losing the global race:
      • The reservation will result in moving out of tech and automotive companies.
      • Imposing the reservations on gig and platform companies could create a crippling talent crunch.
    • Lesser Tax Collection:
      • The tech giants and other industries may be forced to shift their base from Haryana to other States 
      • Which would drain out the State’s monetary resources to that extent
    • Domino effect: 
      • If other States take Haryana’s cue and follow suit, there would surely be an extreme level of talent crunch across industries and the country.
      • We have already lost out to Sri Lanka and Bangladesh in textiles.
      • MNCs moving out of China have not come to India but shifted to Vietnam, Indonesia, Thailand, Sri Lanka and Bangladesh
    • Threat to unity:
      • Raising the son of the soil issue and preventing free movement of manpower resources in the State 
        • Is sure to have a tremendously adverse effect on the existing industries in the State.
      • This step would create friction among citizens.
    • Against constitutional provisions:
      • These laws are against Articles 14,16 and 19 that provide fundamental rights to Indian citizens to work anywhere in the country.

    Way Ahead and Conclusion

    • The Economic Survey 2016-17 highlighted 
      • that annual work-related migration increased to around 9 million. Thus benefiting the Economy.
    • Draft national policy on migrant workers says 
      • Migration should be acknowledged as an integral part of development.
      • Government policies should not hinder but seek to facilitate internal migration.
    • Report of the Working Group on Migration by the then Ministry of Housing and Urban Poverty Alleviation. 
      • It argued that the movement from agriculture to manufacturing and services is inherently linked to the success of migration in the country.
      • Thus, Such policies would prevent us from optimally harnessing the demographic dividend and thus end up promoting Regional Inequality.
    • Reservation as last Resort
      • First, the options to increase the number of Jobs should be explored.
      • The reservation, if any, should begin from 20%­- 25% as technical and specialised skill sets will take time to inculcate among the State’s youth
    • Incentivising the industries
      • The government may offer financial incentives to industries that invest in training local youths.
      • Such incentives could take the shape of human capital for the better.

    Source: TH