Haryana State Employment of Local Candidates Act, 2020

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    In News

    • The Haryana State Employment of Local Candidates Act, 2020 has now been notified. 

    About the Law

    • The law will guarantee 75% reservation: to locals in private sector jobs in Haryana.
    • Application: The law covers jobs where the monthly salary is less than Rs 30,000 and applies to private companies, societies, trusts and partnership firms in the state with 10 or more employees.
    • Exemptions: New start-ups and IT/ITES companies are exempted for two years under the new law and short-term works, extending up to 45 days, have been kept out of its purview.
    • Haryana lowered the domicile stipulation: from 15 years to 5 years for the new law.
      • It requires a residence certificate based on a voter ID, Aadhaar or a ration card.

    A populist move

    • Haryana is not the first state to take the populist decision. 
    • Jharkhand Assembly passed a bill to provide 75% reservation for locals in the private sector with a salary up to Rs 40,000. It has not been notified yet.
    • Andhra Pradesh reserved 75% of jobs in private industries and factories for locals. Although the law was notified more than two years ago, the state has gone slow in enforcing it. Finding sufficient local talent has been difficult for industries in the state.

    Issues/ Challenges with the new law 

    • The law also seems to be against the spirit of the Constitution of India: which guarantees the right to equality and the freedom to reside in any part of the country and practise any occupation.
    • Industrialists, migrant workers and contractors: remain wary of its repercussions on businesses and employment prospects.
      • At a time when attracting investments should be the highest priority for the government, the new legislation threatens to hurt the industry’s freedom.
    • Almost 99% of employees in a Micro, Small and Medium Enterprise (MSME): earn less than 30,000 and fall under the purview of the new law.
      • MSMEs hire and lay off workers based on the demand. Finding locals with requisite skills every time would not be possible.
    • Lack of data: A political decision was taken and implemented without any data or research.
    • Survey findings: An internal survey by the Garments Exporters and Manufacturers Association had revealed that more than 82% may not consider Haryana for expansion in case the new law was not repealed or the industry not exempted from its provisions.
    • Vague relaxations: Though the law allows relaxation to hire non-locals in certain conditions, the industrialists are skeptical that they cannot wait for three months for the DC office to grant the permission.
    • Skew the workforce balance: Three-fourth reservation in jobs would also skew the workforce balance between locals and migrants and disrupt the smooth running of the businesses.
    • The migrants too fear rampant job losses: Though the residency condition for a domicile certificate under the new law has been reduced to five years from 15.

    Haryana government’s argument

    • The private jobs reservation was part of the election manifesto.
    • Urbanization and industrialisation have led to substantial land acquisition in the State: which has historically been an agrarian society.
    • Employment opportunities in agriculture sector: The government believes this has led to reduction in employment opportunities in agriculture sector for the local youth and the law will help create new job opportunities for them and also encourage skill development.
    • It will reduce dependency: of employers in Haryana on migrant workers and improve their efficiencies.

    Way Forward

    • Challenge the law in court: Companies in the Micro, Small & Medium Enterprises (MSME) sector are planning to challenge the law in court.
    • The IT industry: is evaluating relocation options in nearby Delhi and Noida for fresh growth since the policy applies only to new jobs.

    Source: TH