State of Haryana - Proposed Law on Local Employment

State of Haryana - Proposed Law on Local Employment

?

By Dev Shroff, GNLU 2021-2026

?

The Haryana State Employment of Local Candidates Bill, 2020 was given a green signal on 5th November, 2020. It was further given assent by Governor Satyadev Narayan Arya on 26th February, 2021 and finally on 2nd March, 2021 the Haryana State Employment of Local Candidates Act, 2020 has come into force in the state of Haryana.

The Haryana state government has passed the Haryana State Employment of Local Candidates Act, 2020 (Haryana Employment Act) to ensure that employers in the state employ at least 75% local candidates. Local candidates are those who are domiciled in the State of Haryana and can come from any district of Haryana.

?

Overview

?

The Haryana Employment Act was been notified in the Haryana gazette on March 2, 2021?and is expected to come into effect once a notification has been issued. The Haryana Employment Act will operate in Haryana for 10 years from its effective date. As per the Bill, within three months of the Act coming into force, all the covered employers must register such employees whose salary or wage does not exceed Rs. 50,000 per month on a designated portal provided by the government. Until the registration of all such employees is done on the said portal, no person is allowed to be employed by any employer.

?

?

The Deputy Chief Minister?of the state of Haryana issued a statement[1] that the government plans to implement the law by September 2021. However, the law is yet to be made effective.

?

Employer’s obligations

?

The Haryana Employment Act defines ‘employer’ to include companies registered under the Companies Act, 2013?and a limited liability partnership as defined by the Limited Liability Partnership Act, 2008. The Haryana Employment Act will apply to any person employing at least ten persons.

?

As per the Haryana Employment Act, employers in the state of Haryana will have to the following the important obligations to comply with:

a.????Register on the designated portal as set up by the state government all the employees who are receiving salary of up to Rs. 50,000 per month, which registration needs to be done within 3 months.

b.????Recruit at least 75% local candidates who are duly registered on the state government’s portal for posts where the salary is not more than Rs. 50,000 per month.?

c.????Furnish quarterly reports on details of the local candidates appointed during each quarter.

?

In cases where adequate number of local candidates with the desired skill, qualification and proficiency are not available in the state, the employers may at their option apply for an exemption from the requirements of the Haryana Employment Act to the Designated Officer.?The Designated Officer may at its option accept or reject the application or otherwise direct the employer to train local candidates so as to acquire the desired level of skill and proficiency as required by the employer.

?

The employer is however permitted to restrict employment of local candidates from any specific district to 10% of the total number of local candidates.

?

The state government is yet to set up the designated portal for registering of local candidates.

?

Penalties for non-compliance

?

Employers who do not comply with the Haryana Employment Act shall be subjected to monetary penalties. For example, if an employer in the State of Haryana fails to register an employee as per the Haryana Employment Act, the employer may be punishable with a fine of Rs. 25,000 which fine may extend up to Rs. 1,00,000, with additional penalty of Rs. 500 per day in case of a continuing offence after conviction.?

?

In cases where an employer fails to recruit local candidates, the employer may be punishable with fine of Rs. 50,000 which may extend up to Rs. 2,00,000, along with an additional penalty of Rs. 1,000 per day in case of a continuing offence after conviction.

?

If the offence has been committed by a company, every director, manager, secretary, agent or other officer or person concerned with the management shall be deemed to be guilty of such offence, unless such person proves that the offence was committed without his/her knowledge or consent.

?

Overriding effect and rules

?

The Haryana Employment Act will have an overriding effect on any other law in the State of Haryana which is inconsistent with the law.

?

Judicial developments

?

A writ petition was filed by A.K. Automatics against the Principal Secretary of the Haryana state government and others, challenging the Haryana Employment Act before the High Court of Punjab and Haryana in March 2021. The petition was based on the premise that the law is inter alia unconstitutional, including the fundamental rights enshrined under Articles 14, 15, 16 (2) and 16 (3), 19 (1)(g), 21 of the Constitution of India. However, the petition was dismissed[2] as the Haryana Employment Act was yet to come into force at that time and hence accordingly to Chief Justice Ravi Shanker Jha, the petitioner was not affected at that stage.

?

The petitioner was of the view that the Haryana Employment Act was an attempt to introduce a domicile methodology for securing job in the private sector rather than on the basis of a prospective employee’s education skills and IQ, which will create chaos in the current industrial employment structure. The petition stated that “The law is an infringement on the constitutional rights of the employers because private-sector jobs are purely based on skills and an analytical bend of mind of employees, who are citizens of India having constitutional rights on the basis of their education to opt for jobs in any part of India.” An argument was also made in the petition that the law is an act of unfair competition between deserving employees and local residents claiming to have a right as an employee on the basis of local residence.

?

It is possible that the petition may be re-filed after the Haryana Employment Act is made effective by the state government.

?

The issue with the reservation in private institutions

?

As per Article 19(1)(g) of the Indian Constitution, every citizen of India has the fundamental right to practice any profession, carry on any occupation, trade or business. The Bill, however, makes it compulsory for all private institutions to provide 75% of the jobs to the local candidates of Haryana, this mandate violates the fundamental right of such private institutions to do their business as it restricts them from employing any candidate they deem to be fit for the job.

?

The Act states that the Designated Officer under the Bill can direct such organizations to ‘train’ the candidates so that they become skilled enough for the job. While the employers are restricted to employing local candidates of Haryana, there is a high possibility that they might miss out on candidates who are already eligible for the job. This does not just waste the time and resources of such employers but also poses a burden on them. The whole point of employing a candidate is to make use of their learned skills by the employer but the said Act is missing out on this logic.

?

As a result of reservations, the inadequacy of proper labour will hinder the efficiency of the organizations. When the efficiency of the workers reduces, the work competitiveness reduces and affects the profits of such organizations. This as a whole will make the concerned state fall behind others when it comes to work productivity.?

?

Conclusion:

?

The Haryana State Employment of Local Candidates Bill, 2020, or let’s say the Haryana State Employment of Local Candidates Act, 2020 provides 75% reservation to the local candidates of Haryana, intending to be implemented for the coming ten years. The Act shall apply to all those jobs that yield salary or wages up to Rs. 50,000 per month. Given the fact that the constitutionality of the said Act is being questioned for restricting the employers from choosing their employees as they deem fit, it is debatable if the Act will stand for a long time.

[1] https://timesofindia.indiatimes.com/city/chandigarh/will-enforce-75-haryana-quota-in-private-jobs-this-month-deputy-cm/articleshow/85843575.cms

[2] CWP No. 5970 of 2021 (O&M) dated 15.03.2021