Lack of public debate often results in bad laws. Of late, the state governments across India have been making reservation laws to mandate the private sector to provide jobs to local residents. Some of these states are Jharkhand, Andhra Pradesh, and Haryana. Not only do these laws pose a constitutional threat, but they also often carry a strong undertone of regionalism for immediate political gains. We argue in this post that such state laws forcing the private sector to guarantee jobs indicate a bigger problem ─ the government making laws in a non-transparent and non-consultative manner.
Last year in November 2023, the Punjab and Haryana high court’s decision struck down the Haryana law — the Haryana State Employment of Local Candidates Act, 2020 (HSELC Act) — as unconstitutional [violated Article 16(3) which permits only Parliament to make laws on reservation in public employment and Article 19 which guarantees individual’s right to move freely and practice trade, commerce, and intercourse throughout India].
For readers who are not aware of the HSELC Act, it mandated 75 per cent employment of local candidates (domiciled in the state of Haryana which is to be decided basis the Parivar Pehchan Patra issued under the Haryana Parivar Pehchan Act, 2021) by private employers where the gross monthly salary or wages are less than a specified amount (initially Rs 50,000, later amended to Rs 30,000) – refer this.
Can the Punjab & Haryana HC’s verdict influence other states?
Merely since the state resources are poor and limited, the private employer cannot be forced to employ based on the reservation policy in favour of local candidates. Probably with these strong remarks, the high court has set a promising precedent, especially, when there is a disturbing trend of ruling parties across state governments making similar laws for immediate electoral gains. For instance, such laws have been enacted in states like Andhra Pradesh (date of operation notified but the Act has been challenged before the Andhra Pradesh High Court) and Jharkhand (local associations are exploring options to challenge the law). Although the Haryana state government has moved to the Supreme Court, given the detailed judgement of the high court, it is unlikely that the Supreme Court would uphold the HSELC Act. In any case, it will settle the legal position.
Bigger problem remains unsolved
Surprisingly, the HSECL Act was passed when there were precedents where the Supreme Court held that the legislative power to create residential qualifications for employment is exclusively conferred on the Parliament. [AVS Narasimha Rao Case (1969), Pradeep Jain case (1984) & Saurabh Chaudri case (2003)]. Was the Haryana state government not adequately advised on the legality of the HSECL Act?
Further, it is not clear before the HSELC Act was enacted whether the state government tried to answer some of the basic questions:
- How merely ensuring reservation would boost local employment?
- What was the basis of the claim that this law would benefit private players in getting access to a rich pool of local talent?
- Was any cost-benefit analysis undertaken? Substantial precious time and resources of the judiciary was spent in the dispute, an unnecessary cost borne by society.
- Did it consider the impact of the law on labour cost and labour productivity in the local market given it will restrict choices of employers to hire people from other states?
Recently, the Ministry of I&B through the Broadcasting Bill has put all OTT content services in the basket of traditional broadcasting services. Again, a major decision taken with no prior public consultation. Similarly, at the level of state governments, it is unclear how many laws are being discussed and debated in the public domain. Discussions on laws in state assemblies are few. As per statistics of the PRS Legislative report on Annual Review of State Laws, 2022, most state legislatures met for an average of less than 25 days in a year between 2016 and 2022 and met mostly for the budget session.
Recently, the Rajasthan government passed the gig workers protection law in a hush-hush manner. While the bill was released in the public domain on July 1, 2023, in a marathon style, within less than a month’s time, the state legislative assembly passed the bill on July 24, 2023. Early this month, a meeting was convened by the Haryana government to announce its proposal of a law for the protection of gig workers in the state. Even if we assume that such a law is needed, in the scheme of regulatory governance, public consultation requires debating various options before jumping the gun. Such debates hardly happen and like an authoritarian state, diktats are issued.
Can we do anything?
In the global context, the US has a federal law called the Administrative Procedure Act which lays down the public consultation process to be followed by all federal agencies. In South Africa, public consultation requirements are given in their Constitution (Refer, sections 59 & 72). While the UK does not have a law, the cabinet office is responsible for the government consultation principles, which provide departments with guidance on conducting consultations. Individual departments are responsible for their own consultation practice.
In February 2014, the Government of India issued a Pre-Legislative Consultation Policy which mandated departments to proactively publish proposed legislations on the internet and/or other public domains with additional details such as a brief justification for the legislation, essential elements, broad financial implications, an estimated assessment of the impact of such legislation on the environment, fundamental rights, lives and livelihoods of the concerned/affected people, etc.
After almost 10 years, a 2019 study (Democratising Law Making – The Tale of PLCP) shows the performance of the pre-legislative consultation policy has been abysmal. Out of many of its findings, one of them states that from 2014 till 2019, a total of 186 bills were introduced in the Parliament, out of which 142 saw no public consultation. Of the 44 bills placed in the public domain for receipt of comments, 24 of them did not adhere to the 30-day deadline.
Given the above situation, there is a need for serious debate to design a horizontal-parliamentary law. Transparent and participative law-making cannot be overemphasised. Our civil society must demand for a codified obligation, so it is mandatory for all organs of the state (Centre, state government, statutory regulators, etc) to make laws or delegated legislation (rules or regulations) through a consultative process. Meaning, a fixed duration to respond to the draft instrument, disclosure of public response, and most importantly, the government’s response to the public response explaining its rationale behind the final decision. In sum, a law should not be allowed to come into operation unless it meets these basic requirements, until there is a pressing emergency to skip the set process.
At present, most explanatory memoranda attached to the draft bills barely offer any analysis of the government’s position or justification, other than a factual summary of the proposed clauses in the draft bill. Most ministries do not bother to publish public comments. Critiques would say easier said than done. Probably true. This exercise would need substantial capacity building across government, time, and resources. Most importantly, a willingness to change. But to justify our claim of a democratic and aspiring developed nation, this is the benchmark India must strive for.
Cut to the issue of job reservation laws, the state is expected to enable the right situations, like providing better infrastructure and affordable skilling initiatives for the youth, so the private sector can flourish and youth get ample opportunities. But it is not the duty of the private sector to provide jobs. And certainly, the state cannot direct a private employer as to who it has to employ to guarantee jobs.
Sudipto Banerjee & Deepti Thakkar are independent legal consultants. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect News18’s views.
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