GS Paper II

News Excerpt: 

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.

Provisions of the Bill

• The  Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024, aims to provide reservation for Kannadigas in the private sector. 
• The Bill stipulates that factories, industries, and establishments must appoint local candidates for 50% of managerial positions and 70% of non-managerial positions.
• The Bill also allows a three-year period for training and engaging local candidates if suitable Local Candidates are not available.

Who is a Local Candidate?

• A 'local candidate' is defined as someone born in Karnataka, domiciled in the state for at least 15 years, and proficient in Kannada.
• Candidates not possessing a secondary school certificate with Kannada as a language must pass a Kannada proficiency test prescribed by a nodal agency.

Issues around the Bill:

• The  Bill has faced severe backlash from business leaders and industry representatives.
• They argue that such measures could drive companies out of the state and negatively impact foreign investment.
• As per NASSCOM the Bill will 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.

Similar Cases in Other States

Constitutional Provisions for Reservation:

Article 16

• Article 16 of the Constitution ensures equality of opportunity in public employment and prohibits discrimination based on race, religion, caste, sex, descent, place of birth, or residence.
• It also allows Parliament to make laws prescribing residence requirements for public office employment within a State or Union Territory.
• But this power is not extended to State legislatures.

Violation of Rights Under Article 19:

• The Bill potentially violates Article 19(1)(d) and Article 19(1)(e), which guarantee the freedom of movement throughout India and the right to reside and settle in any part of the country. 
• Restrictions on hiring individuals from other states for private sector jobs could impede these rights.
• The restriction on hiring individuals based on local quotas may infringe on the right to practice any profession or carry on any occupation, trade, or business, as guaranteed by Article 19(1)(g). 
• Individuals and businesses may argue that such restrictions limit their ability to operate freely and choose their workforce.

Court Orders:

• Courts have consistently struck down state laws that mandate local reservations in private sector employment, citing violations of fundamental rights and overreach of state legislative power. 
• The Punjab and Haryana High Court’s ruling on the Haryana Act exemplifies judicial resistance to such legislation, with the Supreme Court’s pending decision likely to set a significant precedent.

Conclusion

The Karnataka Bill faces significant legal challenges, primarily due to constitutional provisions that protect equality of opportunity and freedom of movement, residence, and occupation. The experiences of Andhra Pradesh, Haryana, and Jharkhand highlight the judicial skepticism towards similar laws. As Karnataka promises wider consultations before advancing the Bill, its fate will likely depend on balancing local employment objectives with constitutional guarantees and business interests.