The Punjab and Haryana High Court has struck down the Haryana State Employment of Local Candidates Act, 2020, which mandated a 75% domicile reservation for locals in private sector jobs with a monthly salary of less than Rs 30,000, declaring it unconstitutional. The bench, comprising Justice G.S. Sandhawalia and Justice Harpreet Kaur Jeewan, ruled that the law violated Part III of the Constitution, which encompasses fundamental rights.
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The court addressed four key issues: the maintainability of the writ petitions, the state’s legislative competence to pass the Act in light of Article 35 read with Entry 81 of List 1 of the Seventh Schedule, the state’s authority to implement reservation policy in the private sphere, and whether the Act amounted to a reasonable restriction. All these issues were decided in favor of the petitioners.
The Act, introduced in the State Assembly in 2020, was challenged by various petitioners, including the Faridabad Industries Association. They contended that the Act represented an unprecedented intrusion by the government into the fundamental rights of private employers, as provided under Article 19 of the Constitution. The petitioners argued that the Act was arbitrary, capricious, excessive, and uncalled for, and it was also contrary to the principles of justice, equality, liberty, and fraternity laid down in the Preamble of the Constitution. They further asserted that the Act assaulted the unity and integrity of the country and the idea of a common Indian identity, creating a fundamental wedge between persons domiciled in different states.
The court observed that the State’s powers cannot detriment national interest or encroach upon the power of the Union government. It held that the State cannot force private employers to employ local candidates, as it could lead to the creation of “artificial walls” throughout the country. The court ruled that it was beyond the State’s purview to legislate on this issue and restrict private employers from recruiting from the open market. The court stated,
“The State cannot direct the private employers to do what has been forbidden to do under the Constitution of India. It cannot as such discriminate against the individuals on account of the fact that they do not belong to a certain State and have a negative discrimination against other citizens of the country.”
The court also opined that the Constitution bars discrimination against citizens relating to employment based on their places of birth and residence. It described the State’s reservation law as
“a manifestation of the discriminatory policy that you are not one of us and, therefore, not eligible for employment.”
The order was reserved on October 19 and pronounced recently. The High Court had previously stayed the operation of the Act in 2022, which was set aside by the Supreme Court on appeal. The Supreme Court had requested the High Court to decide the matter expeditiously and ordered that private employers be protected from any coercive action under the legislation until the final outcome of the case.
