In a notable decision today, the Punjab & Haryana High Court declared the 75% reservation for local residents in Haryana within the private sector jobs, specifically those with a monthly salary below Rs 30,000, as "unconstitutional." The ruling, rendered by Justice G.S. Sandhawalia and Justice Harpreet Kaur Jeewan, held that the Haryana State Employment of Local Candidates Act, 2020, goes against the constitutional principles outlined in part III of the Constitution.

The court's verdict nullifies the act, which had granted substantial reservations to local candidates. The legal deliberation revolved around four key issues:

I. The maintainability of the Writ Petitions.

II. The State's legislative competence to enact the Impugned Act under Article 35 in conjunction with Entry 81 of List 1 of the Seventh Schedule.

III. The State's authority to enforce a reservation policy within the private sector.

IV. The determination of whether the Act qualifies as a reasonable restriction.

All four issues were decided in favor of the petitioners, though a detailed judgment is still awaited.

The Haryana State Employment of Local Candidates Act, 2020, was introduced in the State Assembly with the rationale that an influx of migrants competing for low-wage positions had adverse effects on local infrastructure, housing, and led to the growth of slums, causing environmental and health concerns. Prioritizing local candidates for such jobs was seen as socially, economically, and environmentally beneficial, aligning with broader public interests.

One of the petitioners, the Faridabad Industries Association, contended that the Act effectively establishes reservation in private employment, constituting unprecedented government interference in the fundamental rights of private employers under Article 19. The imposed restrictions were argued to be arbitrary, capricious, excessive, and unwarranted.

The plea further claimed that the Act is inconsistent with the principles of justice, equality, liberty, and fraternity articulated in the Constitution's Preamble. It was asserted that the Act contradicts the right to equality guaranteed under both Article 14 and Article 19, posing a significant threat to the unity and integrity of the country by establishing a divide between individuals domiciled in various states.

The decision, reserved on October 19, was pronounced today, marking a crucial development in the ongoing legal discourse surrounding reservation policies in private employment.