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Local Job Quotas in the Private Sector
Context:
The Karnataka State Employment of Local Candidates in the Industries, Factories, and Other Establishments Bill, 2024, which seeks to provide job reservations for Kannadigas in the state’s private sector, has been paused following strong opposition from business leaders and industry representatives.
About the Bill:
- The bill Mandated that any factory, industry, or establishment must hire local candidates for 50% of managerial positions and 70% of non-managerial positions.
- ‘Local candidate’ is defined as
- anyone born in Karnataka,
- domiciled for at least 15 years in the State, and who can read, write and speak Kannada. Candidates not possessing a secondary school certificate with Kannada as a language must pass a Kannada proficiency test prescribed by a nodal agency.
Argument for reservation:
- The states have a legitimate right to ask private sectors to adhere to the reservation policy as the private sector utilises public resources like infrastructure,.provide several concessions for them including tax breaks and cheaper land.
- Prevents migration and empowers local youth and aspiration .
- Several states use a linguistic requirement as a workaround to the ‘sons of the soil’ rule, mandating knowledge of the local language for public jobs.
- These policies are in line with global practices where countries like the US, (The US Civil Rights Act of 1964) and Canada (The Employment Equity Act), provide reservation in private jobs.
Arguments against reservation:
- Industry opposition:Business and Industrial bodies like NASSCOM felt that such measures would drive out companies from the State and impact foreign investment.
- hamper the growth of the industry, impact jobs and the global brand for the State as well as Karnataka’s leading position in technology.
- The legality and constitutionality of such quotas for local candidates, however, are in doubt, as similar steps elsewhere have run into legal impediments.
- The Constitution has no manifest provision which allows states to make laws mandating reservation in the private sector.
- Violating the concept of common citizenship , opposing integration ,diversity of the nation and hampers the merit system .
Similar laws in other States and courts view on them
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Constitutional Provision:
- Article 15 prescribes that the state “shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them.” These fundamental rights have no geographical boundaries.
- 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.
- Though it is not concerning private employment still the spirit of the article opposes undue reservations against outsiders.
- 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.
- State legislatures are not mandated to prescribe residence as a criteria for a job.
- Similarly Article 35(a) says Parliament alone, and not any State legislature, will have the power to enact such a law as a residential requirement.
- Article 19(1)(d) & Article 19(1)(e):Any restrictions on individuals from one state seeking employment in another will inevitably infringe upon their freedom of movement throughout the territory of India, as guaranteed by Article 19(1)(d), and their right to reside and settle in any state, as enshrined in Article 19(1)(e).
- Article 19(1)(g) :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.
Way forward:
- Balancing local aspiration with national integration: As highlighted by SC in Dr. Pradeep Jain Etc vs Union Of India And Ors. Etc , 1984 that while local reservation policies may offer short-term benefits, they could harm the state’s economic development and national unity in the medium and long term.
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- Therefore, states should focus on capacity building through skill development and incentivize the private sector to hire local youth to achieve the intended benefits of these policies.
- Supreme Court interpretation: The SC as soon as possible answers all the legal and constitutional ambiguities regarding state government power to provide reservation in the private sector .
