SC Sets Aside HC Stay On Haryana Reservation Law, No Coercive Action

The Supreme Court on Thursday set aside the Punjab and Haryana High Court February 3 order by which it had temporarily stayed the implementation of the Haryana reservation act that provided for 75 percent jobs for those with a Haryana domicile in the private sector.

The bench comprising L Nageswara Rao and PS Narasimha pointed out that the high court had not given a reasoned order to justify the stay and directed the court to decide the matter by March 17. According to the February 3 order, the challenge to the Haryana law was next listed for April 18.

"We do not intend to deal with the merits of the matter. We propose to request the High Court to decide the writ petitions as expeditiously as possible, at any rate within 4 weeks. The parties are directed to seek no adjournments and present before the court next week for fixing the schedule of the hearing," the bench said dictating the order in court.

The division bench further directed the state from taking punitive action against erring employers. Haryana government told the Supreme Court that the high court had stayed the law without giving any reasoned order after a "90-second-hearing".

What is the Haryana State Employment of Local Candidates Act, 2020?

The Haryana Assembly in November 2020 passed The Haryana State Employment of Local Candidates Bill, 2020, which provided for 75 percent reservation for state domiciles in private sector jobs where the monthly salary was less than Rs 30,000.

The Governor gave his nod to the bill on March 2, 2021, and the law came into effect on January 15, 2022.

The ambit of the law covers all private companies, societies, trusts, limited liability partnership firms, partnership firms, and large individual employers. The law also covers any person who employs 10 or more persons on salary, wages or other remuneration for manufacturing jobs or to provide any service; as well as any such entity which is notified by the government.

The act exempts central and state governments or any organisation that falls under the aegis of these governments.

According to the provisions of the act, those flouting the law could attract a penalty from Rs. 50,000 to Rs. 2 lakhs.

The Haryana Reservation law was a key poll promise made by Deputy Chief Minister Dushyant Chautala's Jannayak Janta Party (JJP) which is a crucial coalition partner of the ruling-Bharatiya Janata Party (BJP) government in the state.

Before Haryana, three other state governments have passed similar laws: Andhra Pradesh, Jharkhand, and Maharashtra. However, the law has been challenged in Andhra Pradesh only however, there is no stay on the implementation of the same.

Why has the law been challenged?

The Punjab and Haryana High Court on December 10, 2021 had issued notice on a plea filed by the Faridabad Industries Association (FIA) challenging the Haryana reservation law. The Gurgaon Industrial Association, which has also challenged the law, had previously submitted that the Haryana government's "sons of the soil" policy was an infringement of their constitutional rights.

"The Act purports to effectively provide for reservation in private employment and represents an unprecedented intrusion by the government into the fundamental rights of private employers to carry out their business and trade, as provided under Article 19 and the restrictions being places upon such a right are not reasonable but are arbitrary, capricious, excessive and uncalled for," the plea read.

The act is contrary to the very idea of common citizenship and violates the federal structure of the union of India which is a basic tenet of the Constitution.

Furthermore, the plea suggested that private-sector jobs were not only purely skill-based and jobs that needed an analytical bent of mind, but employees also had a fundamental right to work in any part of India.

"The act of the respondent (government) forcing the employers to employ local candidates in private sector vide this bill impugned Act is the violation of the federal structure framed by the Constitution of India, whereby the government cannot act contrary to the public interest and cannot benefit one class," the petition said.