In the recent past, many States like Madhya Pradesh, Andhra Pradesh, Haryana, Karnataka and Telangana have passed laws mandating employers in the private sector to provide for employment upto a reserved percentage to local candidates from within the State. These laws not only provide for registration of both employers and prospective employees (as adjudged eligible therein) to ensure compliance, but also mobilise a veritable army of bureaucracy and officialdom to oversee and enforce the same.
Proponents of such laws will no doubt argue in favour of creating job opportunities for, and promoting the employment prospects of, the local workforce hailing from within a State. They would likely also point to the widespread loss of livelihood in urban and semi-urban regions of the country, which was further aggravated by the unfortunate exodus of migrants to their hometowns during the Covid-19 related nation-wide lockdown of 2020.
This curious ilk of protectionist legislation is somewhat ironical in the present times, given that the Central Government has, with much aplomb, announced certain seemingly innovative governance related measures such as the creation of one nation-one tax; one nation-one grid; one nation-one mobility card; and last but not the least, one nation-one election. Despite this, many States including those governed by the ruling party at the Centre are creating artificial barriers for restricting access to jobs on narrow parochial considerations, thereby curtailing basic fundamental freedoms of Indian citizens and imposing onerous obligations and intrusive measures upon private industry and business. Such legislative policies, as we will see presently, stand on shaky legal foundations.
Article 16 of the Indian Constitution, in particular sub-section (2) thereof, states that no citizen shall be ineligible for, or be discriminated against in respect of any employment or office under the State only on grounds of religion, race, caste, descent, place of birth or residence. This constitutional prohibition, read along with the positively worded prescription of Article 16(1) that, there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State, means that such job reservation statutes based on domicile will be susceptible to serious constitutional challenges in their entirety or atleast to the extent they are applied to private sector establishments.
It would also be instructive to note the views of the Supreme Court of India on the legality of legislative reservation or preference based on domicile or residence requirement for employment. As early as in 1984, a three Judge bench, in Dr. Pradeep Jain vs. Union of India and others (1984) 3 SCC 654, expressed its concerns in these prescient terms which resonate even in today's times:
"1...we find today the integrity of the nation is threatened by the divisive forces of regionalism, linguist and communalism and regional, linguistics and communal loyalties are gaining ascendancy in national life and seeking to tear apart and destroy national integrity. We tend to forget that India is one nation and we are all Indians first and Indians last...
3...Now if India is one nation and there is only one citizenship, namely citizenship of India, and every citizen has a right to move freely throughout the territory of India and to reside and settle in any part of India, irrespective of the place where he is born or the language which he speaks or the religion which he professes and he is guaranteed freedom of trade, commerce and intercourse throughout the territory of India and is entitled to equality before the law and equal protection of the law with other citizens in every part of the territory of India, it is difficult to see how a citizen having his permanent home in Tamil Nadu or speaking Tamil language can be regarded as an outsider in Uttar Pradesh or a citizen having his permanent home in Maharashtra or speaking Marathi language be regarded as an outsider in Karnataka. He must be held entitled to the same rights as a citizen having his permanent home in Uttar Pradesh or Karnataka, as the case may be. To regard him as an outsider would be to deny him his constitutional rights and to derecognise the essential unity and integrity of the country by treating it as if it were a mere conglomeration of independent States."
The Pradeep Jain case (supra) related to admissions to medical colleges being confined to those candidates who had their 'domicil' or residence within the State for a specified period or provision of some kind of reservations for them. Conscious of this limitation and yet acutely concerned by the pursuit of policies of localism by many State Governments, the Apex Court expressed a prima facie view that it was constitutionally impermissible for States to adopt 'sons of the soil' policies that prescribe reservation or preference based on domicile or residence requirement for employment or appointment to an office under the Government of a State or any local or other authority or agency or instrumentality of the State.
After about a decade, the Supreme Court had another occasion to revisit this vexed issue in V.N. Sunanda Reddy and others vs. State of Andhra Pradesh and others (1995) Supp (2) SCC 235, where the validity of a state government policy that gave 5% extra weightage to candidates who had studied with Telugu as the medium of instruction was in issue. While striking down the policy, the Supreme Court referred to its observations in Pradeep Jain case (supra) and observed that the sweep of Article 14 read with Article 16(1) would be pervasive and would render such policies unconstitutional.
The trend of judicial thumbing down of reservation laws or policies based on narrow considerations of domicile within a State was reiterated by the Supreme Court in subsequent judgments including Kailash Chand Sharma vs. State of Rajasthan (2002) 6 SCC 562, Magan Malhotra vs. Union of India (2003) 11 SCC 186, Nikhil Himthani vs. State of Uttarakhand and others (2013) 10 SCC 237 and Charu Khurana and others vs. Union of India and others (2015) 1 SCC 192.
It can be gainsaid that such legislative restrictions based on narrow and parochial considerations not only ignore the cosmopolitan nature of our urban metropolises, cities and towns, but also fly in the face of the fundamental rights vested in citizens of this country to reside and settle freely in any part of the territory of India and practise any profession, or to carry out any occupation, trade of business. Further, the imposition of such laws is antithetical to the oft-repeated mantras of 'more governance less government' and 'ease of doing business', especially in the present times when private industry and businesses across the country are struggling to regain their bearings in the prevailing Covid-19 environment.
The validity of the job quota law passed by the State of Andhra Pradesh was challenged before the High Court of that State and the matter is currently sub judice. However, considering that the ramifications of such measures by some States will have far-reaching consequences for non-local work force located within and beyond their borders, one can only hope for an authoritative judicial pronouncement by the Supreme Court on the validity of such laws and policies at the earliest.
Having said that, it is extremely unlikely that in the interim, supporters of the 'sons of the soil' argument on which such statutes/policies are premised, will be able to persuade the naysayers, including the most affected section of private employer (read job creators) within the State, that the perceived advantages outweigh the downsides. A potential, more worrying consequence could be the disincentive for new industry and business to set up shop in these States and even worse, the migration of existing industry and capital within their territories to States with less regressive regimes, which may prove counterproductive to the objectives sought to be achieved by such laws in the first place.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.