GS Paper II

News Excerpt:

The Karnataka Cabinet has cleared a Bill mandating that industries, factories and other establishments appoint local candidates in 50% of management positions and 70% in non-management positions.

More detail about news:

• The Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024, which aims to provide reservation for Kannadigas in the private sector in the State, has been put on hold after severe backlash from business leaders and industry representatives. 
• The Bill was cleared by the Cabinet on July 15, but is yet to be introduced in the Assembly.

Background of the Bill (Long-pending demand)

• The Bill has been passed in the backdrop of voices calling for 100% job reservation for Kannadigas.  
• Earlier in July, Kannada organisations had organised rallies in parts of the State demanding immediate implementation of the Sarojini Mahishi report that recommended a quota for locals in government and private sector jobs.
• Mahishi, former Union Minister and the first woman MP from Karnataka, who headed the Mahishi Committee, submitted a report in 1984. The report had 58 recommendations, including 100% reservation for locals in group C and D jobs in Central government departments and public sector undertakings (PSUs) operating in Karnataka.

Provisions of the Bill:

• The Act defines a local candidate as a person “who is born in the State of Karnataka and who is domiciled in the State for a period of 15 years and who is capable of speaking, reading and writing Kannada in a legible way and has passed a required test conducted by the nodal agency”.
• According to the Act, candidates must have a secondary school certificate with Kannada as a language. If not, they should pass a Kannada proficiency test, as specified by the nodal agency notified by the government.
• If qualified or suitable local candidates are not available, the industries and establishments, in collaboration with the government, should take steps to train local candidates within three years.
• “If sufficient numbers of local candidates are not available, then an industry or factory or other establishments may apply for relaxation from the provisions of this Act to the government, and after due enquiry, the government may pass appropriate orders and such orders passed by the government shall be final,” according to the Bill.
• Nevertheless, the percentage of local candidates should not go below 25% in management positions and 50% in non-management categories. Failure to comply may attract penalties ranging from ₹10,000 to ₹25,000.
  

Why is industry opposed to it?

• Business and industry responded with alarm on hearing of the features of the proposed Bill. They felt that such measures would drive out companies from the State and impact foreign investment. NASSCOM, the national lobbying body of the software industry, said it was deeply disturbing. 
• The Bill, it felt, would “hamper the growth of the industry, impact jobs and the global brand for the State”. Many expressed concern over the impact of such measures on Karnataka’s leading position in technology and described it as regressive and short-sighted.

What about similar laws in other States?

• Andhra Pradesh, Haryana and Jharkhand are among the States that have tried to bring in legislation to mandate reservation for domiciles or local residents in the government or private sector.

• • The Andhra Pradesh Employment of Local Candidates in the Industries/Factories Act, 2019, sought to introduce 75% reservation for local people in any industry, factory, joint venture or project taken up in the public-private partnership mode. It also gave a three-year period for training and engaging local candidates, if suitable candidates were not available. 
    • The Act has been challenged in the Andhra Pradesh High Court, but the government itself has not been zealously implementing its provisions so far.
  • The Haryana State Employment of Local Candidates Act, 2020, was struck down by the Punjab and Haryana High Court, and the matter is now before the Supreme Court.
    • • It provided for 75% reservation in the private sector for jobs that entailed a salary of up to ₹30,000 a month. It also came with a sunset clause that said it would lapse after 10 years.
      • The court held that the law violates fundamental rights and that it is beyond the State Assembly’s purview to legislate on the issue. It said such enactments would result in States putting up “artificial walls” throughout the country.

• • The Jharkhand Definition of Local Persons and for Extending the Consequential Social, Cultural and Other Benefits to such Local Persons Bill was passed in 2022.

• Jharkhand Governor C.P. Radhakrishnan returned the Bill with comments to the effect that providing for 100% reservation for locals in Class III and Class IV employment opportunities may be unconstitutional. The Hemant Soren government, however, got it re-enacted in the Assembly in December 2023.

What are the Constitutional issues that arise?

• In broad terms, these issues arise from the absence of any provision in the Constitution for private sector job reservation, the absence of legislative power in State Assemblies to prescribe residential criteria for employment, the constitutional guarantee of freedom from discrimination on grounds of place of birth or residence and the fundamental right to practise any profession, or carry on any occupation, trade or business.
• Article 16 lays down that there shall be equality of opportunity in public employment. 
• It prohibits discrimination on grounds of race, religion, caste, sex, descent, place of birth or residence with respect to any employment or office under the state.
• Article 16(3) allows Parliament to make any law prescribing a requirement as to residence within a State or Union Territory prior to employment or appointment to a public office in that State or Union Territory. 
• Article 35(a) says Parliament alone, and not any State legislature, will have the power to enact such a law as a residential requirement.
• Another constitutional issue is the effect local quotas have on the freedom of movement of citizens throughout the territory of India, guaranteed by Article 19(1)(d). Any curbs on people belonging to one State to seek employment in another will inevitably impinge on their right to reside and settle in another State, enshrined in Article 19(1)(e).
• As far as individuals are concerned, the restriction on hiring people of their choice may violate their right under Article 19(1)(g) to carry on any occupation, trade or business.