The Road Never Travelled: An Analysis Of The Constitutionality Of The Haryana Bill Reserving Jobs In Private Sector

What the Bill means: As per section 4 of the Bill, its purpose is to secure (read reserve) 75% of total employee strength for local candidates in Haryana. The term local candidatehas been given the meaning of a 'Domiciled' candidate under Section2(g),and not the expression 'place of birth'. Interestingly, section 2(e) of the Bill uses the word 'employer' but an exclusion has been made for Central and State Government and entities owned by them, respectively, thus indicating that it may only apply to private sector undertakings operating within the State.Section 1(5) makes the Bill applicable to any entity employing ten or more people or any entity as notified by the Government, but Section 3 restricts the scope to only those employees who receive gross monthly salary less than INR 50,000.

As far as it concerns the employers,Section 4 gives them the liberty to restrict the employment of candidates from any particular district to 10% of the 75% quota. They have also been given the option under Section 5(1) to seek exemption from the aforesaid provision if an adequate number of skilled candidates with desired qualification or proficiency are not available. However, by Section 5(2) he designated officer has been bestowed with the discretion to accept/reject such claims based upon his Subjective assessment of attempts by the company to recruit local candidates, and on his satisfaction, the officer may even direct the employer to train local candidates to achieve desired skills, qualification or proficiency. The Bill has envisaged a limited time frame of ten years for its applicability, after which, as far as the language of the Bill is concerned, it will be repealed.

Why the Bill?

In explicit terms, the Bill's objectives have been made clear in its Statement of Objects and Reasons. The influx of migrant workers has been cited as the primary influence behind the enactment of such provisions. Undersigned by the Deputy Chief Minister of the State Sh. Dushyant Chautala, thus presumably his views or views of his Government, these large swathes of migrant workers are putting substantial pressure on the infrastructure of the Haryana and prompting the proliferation of slums, which has consequently led to environmental and health hazards in urban areas of Haryana adversely affecting the quality of life and livelihood. The supposed purpose of the Bill has been stated as socially, environmentally and economically desirable for Haryana.

Implications on Federal Balance and inherent Unconstitutionality

India was envisaged as a Union of States with Single citizenship, which necessarily implied that States were not entitled to either bestow citizenship individually or any resembling privilege.

There are multiple arguments, and a scathing challenge is expected to be mounted against any such policy action, the foremost of which, as far as Haryana is concerned, is the detrimental effect that the step would have on the ease of doing business for private entities in the State Gurgaon, in particular, is expected to suffer. Politicians in the Country are often accused of neglecting economic considerations in favour of vote bank consolidation, and this step appears in sync with such accusations. Minimal government interference is usually an indicator of a mature economy; in this case, that appears to have gone out of the window.

Even on a legal basis, such actions stand on a weak footing. Reservation per se has been a volatile topic for the Indian Society, which has slowly but surely been accepted as a reality within specified limits by the Courts and the people. The ratio for reservation, in general, is the upliftment of historically marginalized communities as well as Socially and Educationally backward classes under Art. 15(5) and Art. 16(4). It is to be noted that even these clauses are in the nature of 'Non-obstante clause', which are legal because they are explicitly mentioned. Nowhere does the Constitution empowers the 'State' to provide reservations based on domicile.

In fact, Art. 15(1) and Art. 16(2) explicitly prohibit the 'State' from discriminating based on 'Place of Birth'. Even though the Court has made a distinction between Place of Birth and Domicile on multiple instances, and the Constitution itself, through its different wordings to Art. 15(1) and Art. 16(2) makes the distinction clear. Art. 16(3) goes so far as to empower the Parliament to enact such legislation to provide domicile reservation, but that is where the legislative empowerment ends concerning domicile reservation; only the Parliament is authorized to provide such reservation and that too for appointment to offices under the State. And even that power of the Parliament has been questioned on multiple instances and has been stuck down at times.^[1]

The Courts have on multiple instances accepted the validity of Domicile based reservation, most notable of these attempts were Dr Pradeep Jain v. Union of India (1984) 3 SCC 654, Shri DP Joshi v. State of Madhya Bharat (1955) 1 SCR 1215, VN Sunanda Reddy v. State of AP 1995 Supp (2) SCC 235 and Kailash Chand Sharma v. State of Rajasthan (2002) 6 SCC 562, but the devil is in the finer details of these pronouncements. For example, In Shri DP Joshi, even for the majority opinion, the Court considered the objective of classification for providing domicile reservations. In that case, the objective was education for residents of a state, which was accepted as a legitimate objective, also because education was a state subject as opposed to the present case wherein Employment appears to be the objective prima facie, in pursuance of which the Bill targets Companies, Partnership firms, trusts to ensure social security and employment for its populace, all of which incidentally fall within the ambit of Entry 7, Entry 10, Entry 20 and Entry 23 of the Concurrent list. Further in DP Joshi, one of the primary reasons which Court cited for providing domicile reservation was the mere fact that since the Subjects of the States were contributing indirectly towards the expanses bore by the State by way of taxes, their legitimate expectation and objective of such provisions displayed a reasonable nexus. On the contrary, in the present case providing reservation in terms of employment in private sector entities which are independent of State machinery and are in no way accruing any benefit from the State and thus their expenses are bore by their respective owners and not by the populace of the State by way of taxes. These private entities are not a result of some State action. Neither the citizens nor the State can be entitled to any legitimate expectation of them, apart from the codified requirements of CSR, Environment etc. Jagannadhadas J., in his dissent in DP Joshi, went a step further and refused to accept 'the foreign concept of domicile' and explicitly mentioned it as being in contravention of Art. 15.

In no uncertain terms, the Court has rejected the concept of preferential treatment due to domicile considerations in Kailash Chandra Sharma (Supra), dubbing the classification based upon residence in a district as an indicator of Socio-Economic backwardness as 'parochial' running contrary to the unity and integrity of this Country. In Dr Pradeep Jain, the Court had taken cognizance of the 'emergence of narrow parochial loyalties fostered by interested parties…threatening India's unity and integrity. The Court wrote in its obiter that 'sons of soil' demands claiming special treatment based on residence in states are threatening the fabric of India, but since they have the populist appeal, they are being allowed to foster loyalties based on language and residence. The Court went so far as to say that this is a dangerous feeling, which might break up the Country into fragments if allowed to grow indiscriminately. In its ratio, the Court following the ratio of Jagdish Saran V Union of india (1980) 2 SCC 768laid down the two conditions which, any departure from a merit-based selection in favour of domicile-based selection, must fulfil, these were the claim of service to the State and the region's claim to backwardness. As can be observed, prima facie, the Haryana bill fulfils none of these two parameters. No objective basis, in the form of any study or report, has been prepared or presented as to how this Bill would prompt service to the State and its people; on the contrary, it might prompt disinvestment in the State rendering the coffers of the State depleted and people suffering due to a lack of funds for Public Schemes. The second claim on the region's claim to backwardness is difficult out of the two to prove in Court, particularly for a state like Haryana that currently features on the 6^th position in terms of Per Capita Income of the States in India. This can be read in accordance with the Judgement of Hon'ble Supreme Court in State Of U.P V Pradip Tandon (1975) 1 SCC 267, wherein the Court has agreed that 'Poverty' can be used as a test of Social Backwardness in pursuance of the objective of Art. 15(4). Thereby a state claiming itself and its residents to be backward while sitting 6^th in terms of Per Capita Income appears as a contradictory claim on the merits of the State Rankings system in India. Tomorrow Kerala might claim itself as Socially and Educationally backward.

Thus, it would not be wrong to say that this specific Bill of Haryana Government stands on shaky ground at best and is blatantly ultra vires at worst.

Challenges Ahead for the Bill: The Road Never Taken

Multiple states in the past, including Maharashtra, Karnataka, Madhya Pradesh, Andhra Pradesh, to name a few, have tried to enact legislations on a similar footings; some were the result of a post or pre-electoral promise, others were a result of a late surge in the autochthonous, the son of soil spirit in the leaders. Haryana is the newest addition to the list, but the ominous signals were enough for most of those states to cautiously proceed in these testing waters. For some, these signals came in the form of adverse advisory of their respective Law Ministries; for others, it was the fear of economic repercussions that were too much to bear for whatever political worth the legislations could have provided.

Haryana has not notified the Bill as of the date of writing, and it remains highly speculative if they will ever do so considering the warnings by business houses and large factory owners. However, if they do try to proceed in the exceptional case, their inexperience might come to bite them on the back. For starters, the definition of local candidate merely mentions the word 'domiciled', which in itself is a highly ambiguous term, even the Hon'ble Supreme Court has not been able to concretize the definition, and if the standard definition of 'place of birth' is taken it would be violative of Art. 15(2) prima facie, alternatively if the accepted definition encompassing 'residence' is taken, most of those migrant workers, whose influx the state government has mentioned in the objective, would be eligible to be considered as Local Candidates, thus, negating the purpose that the Bill seeks to achieve and the negative publicity it has already attracted. If in case, as has been the practice with reservations in State Universities or Provincial Civil Services, the Government chooses to opt for the schooling criteria, a large number of populations would be tendered vulnerable since the 50,000-pay cap would, under normal circumstances, only attract an unskilled or semi-skilled population of the State (considering these are private jobs). Even then, younger migrants and second-generation migrant children would be included within the ambit of Local Candidates.

If, and that is a big if, the Haryana Government can move that far and adjust in the face of these considerations, the primary challenge that they would face in a court of law is to establish a reasonable nexus between the objective sought to be achieved and the geographical considerations they have used as a solution. That is, if at the initial stage the objective itself is not rendered ultra vires the Constitution, then Haryana, with its 6^th Highest Per Capita Income in the Country, would find it difficult to substantiate their argument that the population of the State is unemployed and the migrants are the reason. Even so, using what legislative authority and credible competence have they enacted a legislation to mandate such overarching reservation in the private sector, on a basis(domicile) which itself stands on a diabolic ground with the judiciary.

Views are Personal

The Author is an Advocate Practicing at the Supreme Court of India