The Punjab and Haryana High Court on February 3, 2022 granted an interim stay on the Haryana State Employment of Local Candidate Act, 2020.
- The law stipulates that firms with 10 or more employees must reserve 75% of all jobs which offer a salary of less than Rs 30,000 a month to those having a domicile (resident certificate) of Haryana.
- On March 2, 2021, the Governor gave his assent to the Bill. The law came into effect from January 15, 2022.
Petition
- Around eight petitioners, including different industrial associations and individuals, moved the court in December 2021 against the law, pleading that it was against the provisions of the Constitution and the basic principle of meritocracy that acted as the foundation for businesses to grow and remain competitive.
Industry concerns
- Industry bodies said the act would severely impact manufacturing and IT sectors, deter investment, and may force companies to relocate from the state in the long run.
Constitutional issues
- It prima facie exercises a power exclusively within the domain of Parliament under Article 16(3). Constitution’s Article 16(3) allows Parliament to make any law with residence qualifications necessary for government jobs, introducing domicile-based preferential treatment, there is no such provision in the Constitution empowering states to pass laws on domicile-based reservation.
- It breaches the 50% ceiling on reservation.
- It interferes with the constitutional right of citizens to conduct business or trade.
- In Uttar Pradesh vs Pradip Tandon (1974), the Supreme Court held that “no reservation can be made on the basis of place of birth as that would offend Article 15”. Article 15 prohibits the state from discriminating against any citizen on grounds of religion, race, caste, sex, or place of birth.
- In Dr Pradeep Jain vs Union of India, 1984, the apex court dealt specifically with the issue of domicile-based reservation, underscoring that to regard an individual from one state as an outsider in another state “would be to deny him his constitutional rights and to derecognise the essential unity and integrity of the country.’
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