20-December-2024-Editorial

DOMICILE-BASED RESERVATIONS IN PRIVATE SECTOR JOBS

Domicile-based reservation policies in the private sector have become a contentious issue in India. These laws aim to prioritize locals for employment, citing high unemployment among residents and a perceived loss of jobs to migrant workers.

While these measures may appear beneficial for local populations, they raise concerns about constitutional rights, business freedom, and national unity.

Key Developments: Jharkhand High Court’s Decision

Background

• The Jharkhand State Employment of Local Candidates in Private Sector Company Act, 2021 mandated a 75% job reservation for local residents in private-sector jobs with salaries up to ₹40,000.
• The law faced a legal challenge from the Jharkhand Small Scale Industries Association (JSSIA), which argued that it violated constitutional principles and business freedom.

Court Ruling

Stay on Implementation: The Jharkhand High Court (HC) has halted the enforcement of the law.

Violations Highlighted:

• Article 14: Right to Equality; the law discriminates against non-local candidates.
• Article 19(1)(g): Freedom to conduct business; the law restricts employers’ ability to hire freely.

The petition also cited a precedent: Punjab and Haryana HC quashed the Haryana State Employment of Local Candidates Act, 2020, for similar constitutional violations.

Domicile-Based Reservation Laws in Other States

Andhra Pradesh

• Introduced the Andhra Pradesh Employment of Local Candidates in Industries/Factories Act, 2019, reserving 75% of private-sector jobs for locals.
• The Andhra Pradesh HC observed potential unconstitutionality but has not issued a final ruling.

Karnataka

• Proposed the Karnataka State Employment of Local Candidates in Industries, Factories and Other Establishments Bill, 2024.
• Reservation quotas include 50% for locals in management roles and 75% in non-management positions.
• The law has drawn criticism for its potential impact on business operations and labor mobility.

Why Do States Introduce Domicile-Based Reservation Laws?

• High Unemployment Among Locals: States face job shortages for locals, especially in low-skilled sectors.
• Migrant Worker Concerns: Perception of migrants taking jobs fuels resentment in industrial regions.
• State Employment Prioritization: Private sectors benefit from government incentives, prompting states to demand local hiring as a form of social justice.
• Political Pressure: Governments introduce such laws to gain local support and secure vote banks.
• Skill Mismatch: Locals may lack qualifications for higher-paying jobs, making quotas a temporary solution for employment gaps.
• Retention of Talent: Ensures locals remain employed within the state, addressing issues like brain drain.

About Domicile Reservation

Domicile Reservation allocates opportunities to individuals based on their residence, ensuring locals receive preference in jobs and education.

Constitutional Framework

• Article 16(3): Parliament can enable residence-based reservations in state jobs.
• Article 371D: Special provisions for Andhra Pradesh and Telangana to ensure local representation in government jobs.
• Article 15: Prohibits discrimination based on birthplace but not residence.

Landmark Judgments

• DP Joshi vs. Madhya Bharat (1955): Upheld domicile-based reservations as legitimate for state interests.
• Dr. Pradeep Jain vs. Union of India (1984): Affirmed that such quotas are permissible if they adhere to principles of reasonable classification.

Challenges of Domicile-Based Reservations

• Merit Compromise: Overemphasis on local quotas can undermine merit-based selection.
• National Unity Risks: May foster regionalism and divisions, weakening national integration.
• Exclusion of Migrants: Migrants contributing to local economies may face unfair exclusion.
• Manipulation: Domicile criteria can be exploited for favoritism or political gain.
• Sustainability: Over-reliance on quotas detracts from long-term investments in education and skill development.
• Intra-Regional Inequalities: Wealthier locals may benefit more than marginalized groups within the state.

Way Forward

• Balanced Policies: Combine merit-based hiring with mechanisms to address local unemployment.
• Skill Development: Prioritize training programs to enhance local competitiveness in the job market.
• Incentivize Employers: Offer tax breaks or subsidies to companies prioritizing local talent voluntarily.
• Ensure Labor Rights: Protect both local and migrant workers with fair wages and social protections.
• Sustainable Development: Address root causes of unemployment by improving education, healthcare, and infrastructure.
• Collaborative Solutions: Foster dialogue between industries, governments, and local communities to create inclusive policies.

Conclusion

Domicile-based reservations aim to address local unemployment and ensure inclusive growth. However, they pose significant constitutional, social, and economic challenges. A balanced approach emphasizing skill development, fair labor practices, and inclusive policies can address regional disparities without compromising merit or national unity.