In the landmark ruling by the division bench comprising Justices G. S. Sandhawalia and Harpreet Kaur Jeewan delivered a verdict declaring the Haryana State Employment of Local Candidates Act, 2020, as unconstitutional, asserting that it infringed upon the fundamental rights outlined in Part III of the Constitution. This landmark judgement of Punjab & Haryana High Court (“P&H HC”), ‘IMT Industrial Association and another v. State of Haryana and another,’ has significant implications not only for Haryana but for other Indian states considering or implementing similar local reservation laws.[1]
Background
The Local Candidates Act, enacted on March 2, 2021, and enforced from January 15, 2022, mandated that private sector employers in Haryana reserve 75% of jobs for local candidates domiciled in the state, provided their gross monthly salary or wages did not exceed INR 30,000. However, its constitutionality was challenged, leading to a series of legal battles.
Initially, the P&H HC issued an interim order in favour of the petitioners, temporarily staying the implementation of the Act on February 3, 2022. The State of Haryana appealed this decision before the Supreme Court of India (“SC”), which, on February 17, 2022, set aside the interim order but directed the P&H HC to expedite the case’s resolution.[2]
Issues Framed
The P&H HC has addressed several key legal questions, including the maintainability of the writ petition by an association of persons and whether the state could enact legislation infringing on private employer’s’ fundamental rights.
Petitioner’s Arguments
The petitioners, represented by IMT Industrial Association and others, contended that the Local Candidates Act infringed upon Article 19 of the Constitution, which protects the right to carry on business and trade. They argued that the Act was an assault on the unity and integrity of the country by favouring local candidates over others, violating Article 14.
Respondent’s Arguments
The State of Haryana defended the Act, asserting that the right under Article 19(1)(g) was not absolute but qualified. They argued that restricting reservations to low-paid jobs, with a salary cap of INR 30,000, was a reasonable restriction in the interest of the public. They cited issues related to infrastructure, housing and environmental concerns caused by a large stream of migrants competing for low-wage jobs.
Decision
The P&H HC asserted that the Local Candidates Act exceeded the state’s jurisdiction by imposing limitations on how the private sector could hire individuals for low-paying positions. The court stressed that Article 19 liberties could not be restricted by the state’s narrow perspective, deeming such legislative directives contrary to constitutional morality.
Moreover, the court ruled that the Act violated Article 19 and placed unwarranted constraints on citizen’s freedom to move and reside anywhere in India. It also dismissed objections regarding the suitability of the writ petition by an association of individuals, citing precedents from the Supreme Court.
Impact and Importance
The P&H HC ruling has far-reaching implications for both Haryana and other states contemplating similar local reservation laws. Private sector entities in Haryana are relieved of burdensome compliance and reporting requirements imposed by the Local Candidates Act. The judgement emphasises the importance of upholding constitutional principles and fundamental rights while formulating employment policies.
Moreover, this landmark decision may influence the fate of similar legislation in other states, such as Jharkhand and Andhra Pradesh, where local reservation laws have faced legal challenges.
Conclusion
The P&H HC ruling on the Haryana State Employment of Local Candidates Act, 2020, is a significant milestone in India’s legal landscape. It reaffirms the supremacy of fundamental rights and constitutional values, striking down a law that intruded into the private sector’s hiring practices. The judgement not only impacts Haryana but sets a precedent that could shape the fate of similar laws in other states, emphasising the importance of a balanced approach between local interests and constitutional rights in employment legislation.
