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This article is written by R Sai Gayatri, from Post Graduate College of Law, Osmania University. This article deals extensively with the Haryana State Employment of Local Candidates Bill, 2020.  


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. As per the said Act, there will be a job reservation of 75% in the private sector for the youth of Haryana. Is this legislation a step towards the progress of the state, or is it sending meritocracy for a toss? 

Salient features of the Bill 

The Haryana State Employment of Local Candidates Bill, 2020 contained the following features-

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It was stated in the Bill that provisions under it shall cease to exist after a period of 10 years from the date of its commencement. 


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 said Bill shall apply to all companies, trusts, societies, partnership firms, limited liability partnerships and covered employers i.e, the persons employing ten or more persons. The Bill excludes the Central and State government and the organisations owned by them. 


For local candidates 

As per the Bill, every employer shall employ 75% of the local candidates in such posts where the salary or wages per month does not exceed Rs. 50,000 or as mentioned by the government. However, the employer has the freedom to restrict such employment of local candidates from any particular district to 10% of the total number of the local candidates.

Outside-the-state candidates 

In case a covered employer chooses to recruit employees who are non-locals based on the reason that there is a shortage of local candidates who can be eligible for such a job, then the same must be applied by the employer to the Designated Officer appointed under the said Bill. Further, the Designated Officer is required to examine whether the covered employer has successfully tried to recruit local candidates for the said job and then decide upon the application. The application may be accepted or rejected by the Designated Officer. He may also ask the covered employer to provide the local candidates with robust training so that they become eligible for the required job. 

Reporting requirements 

As per the said Bill, it is mandatory for the covered employers to provide quarterly reports concerning the recruitment of local candidates done by them. This report must be produced in the manner prescribed by the State government in its rules. 

Liable employers

The Haryana State Employment of Local Candidates Act, 2020 states that – when a company commits an offence under the said Act – every Director, Manager, Secretary, Agent, persons concerned with the management and other such officers shall be considered guilty of the offence committed unless it is proven by such person that the offence was committed without their knowledge or consent. 


  1. By not adhering to the requirements prescribed under the Bill, a fine between the range of Rs. 25,000 to Rs. 1,00,000 may be imposed.
  2. A penalty of Rs. 1,000 per day will be imposed if the employer chooses to continue with such violation even after conviction, till such violation is carried out.
  3. Any employer who creates false records or knowingly produces false statements or counterfeits records will be charged with a penalty of Rs. 50,000. The penalty shall increase to the range of Rs. 2,00,000 to Rs. 5,00,000 in case there is a subsequent violation.
  4. Failure on the part of the employer to employ 75% of local candidates for the appropriate jobs as stated under the Bill will lead to the imposition of a fine between the range of Rs. 50,000 to Rs. 2,00,000. 

Reservation in employment to the extent of 75%

As per the said Bill, every employer in the state of Haryana must provide 75% of their jobs to local candidates. It is debatable whether such reservation based on the sole basis of domicile is justified or not. In the case of Indra Sawhney v Union of India (1992), the Supreme Court established certain guidelines restricting the extent of reservation for backwardness as provided under Article 16(4) of the Indian Constitution. It was stated that to maintain the effectiveness and competence in the administration, the reservation under Article 16(4) for the backward classes in the public domain must not go beyond 50%. The court emphasized that though 50% reservation is the rule, it may be relaxed in extraordinary cases. 

However, reservations exceeding 50% have been prescribed in Maharashtra (Socially and Educationally Backward Classes) Act, 2018 and the Telangana (Backward Classes Scheduled Castes and Scheduled Tribes) Act, 2017 against the limit set by the Supreme Court. The Maharashtra SEBC Act of 2018 was assessed by the Supreme Court in September 2020 which resulted in the stay of the implementation of the Act. The basis for such stay was that the backwardness of a certain community and the presence of data showing the insufficiency in public services shall not be considered as extraordinary circumstances which call for reservations that exceed 50%. 

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.  

Violating Article 16 of the Indian Constitution 

The Indian Constitution under Article 16(2) states that no person shall be ineligible or discriminated against on the grounds of place of birth or residence regarding any employment or office under the State. Similarly, Article 14 of the Indian Constitution states everyone must be treated equally before the law irrespective of their place of birth. The Supreme Court, in a case, opined that reservation in employment, simply on the basis of being a domicile of some state is violative of Article 16(2) and Article 14 of the Indian Constitution. 

The said Bill makes it imperative for the organizations to employ local candidates. Such employment is based only upon the factor that the candidates are domicile of the state of Haryana. Prima facie, the Bill seems to be in utter violation of the rights of the employers. It not only reduces the scope of giving a fair chance to each person but also eliminates the chance of having a comparatively diversified workforce. 

Domicile – a legal basis for job reservation

As per Article 16(3) of the Indian Constitution, the Parliament has the power to provide reservation in public employment solely based on domicile. The reservation may extend to jobs created under any authority of a state or Union Territory. The Public Employment (requirements as to residence) Act, 1957 was passed by the Parliament to repeal all the laws that required domicile to be eligible for public employment in all States and Union Territories. Regarding certain posts of public employment in selected areas of Andhra Pradesh, Himachal Pradesh, Manipur and Tripura, the Parliament reserved its right to prescribe rules.

The extent to which the Parliament may exercise this power was elucidated by the Supreme Court in the case of A.V.S Narasimha Rao v. State of AP. It stated that the Parliament’s power to enact a law where domicile is required for public employment in Telangana region of the then state of Andhra Pradesh was ultra vires with regard to the Constitution. In its verdict, the court held that the Parliament by the virtue of Article 16(3) is not allowed to provide domicile-based reservation only in a selected part of the state, rather, it must apply to the state in total.

In Pradeep Jain v. Union of India, the Apex court stated that no individual belonging to one state must be treated as an outsider in another state in light of domicile reservation. The court further stated that doing so would eliminate the very purpose of unity among the states in India and more importantly it would violate the constitutional right of such an individual.

Releasing the ‘Inspector Raj’ in the state

The term ‘Inspector Raj’ refers to the inspection or assessment done by government officials in the private sector. Such inspections are done to check whether the establishments in the private sector are following the health and safety protocols as prescribed by the respective governments. The private sector seems to be a non-essential area for such inspection to be carried out since it reduces the efficiency and productivity of the establishments.  

The ‘inspector raj’ concept was introduced in India by Indira Gandhi and was well established between the 1970s and 1990s. Although inspector raj is not rampant in India right now, it has not completely vanished as well. The Act states that Officers at different levels will be appointed based on the size of the establishment. No legal proceedings shall be put up against any designated or authorized officer. The persons who are acting bona fide as per the directions or orders of such designated or authorized officers in furtherance of the provisions of the Act shall also be resistant to such suits.

Mr. V.S. Kundu, Additional Chief Secretary (Labour) of Haryana, stated that officers do their duty in good faith as tools of the government and so they must be immune from legal processes. However, if at all an officer does something in utter violation of the law then required action will be taken against him.

The industrialists based in Manesar, Haryana had questioned the legality of the 75% reservation and stated that if such reservation is not questioned in the court of law then it might lead to the re-birth of inspector raj in the state. The over-involvement and supervision of the government in the private sector did not go down well with the IT industry too.  


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. 


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