Karnataka Government has Hold Reservation Bills for Locals

Context

• The Karnataka Cabinet has approved a bill that mandates local hiring quota for industries, factories, and other establishments within the state.
• This legislation, known as the Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024

Karnataka Government Puts Private Sector Quota Bill on Hold After Backlash

The Karnataka government has paused its proposed private sector job reservation Bill after backlash from top CEOs and industry bodies. The Bill mandated 75% reservation in non-management jobs and 50% in management jobs for local candidates. Critics, including Biocon’s Kiran Mazumdar Shaw and Nasscom, argued it would drive away companies and stifle startups. Chief Minister Siddaramaiah announced the Bill is still in draft form and will undergo comprehensive discussion in the next Cabinet meeting. Industries Minister MB Patil assured that wider consultations will be held before any decision is made.

Key Provisions of Karnataka Employment Bill

• Hiring Quotas: The bill stipulates that 50% of management positions and 75% of non-management positions must be filled by local candidates.
  • The Bill specifies that a local candidate must be someone born in Karnataka who has been domiciled in the state for at least 15 years.
• Penalties for Non-compliance: Violations of the bill’s provisions can result in fines up to Rs 25,000.
• Language Requirements: Eligible local candidates must either have a secondary school certificate with Kannada as a language or pass a Kannada proficiency test as determined by the designated nodal agency.
• Training Obligations: If qualified or suitable local candidates are not available, employers are required to train local individuals and ensure they are ready for employment within three years.
• Provisions for Relaxation: Establishments can apply for relaxation from these requirements if they demonstrate an insufficient number of qualified local candidates are available. The government will conduct an enquiry before deciding on such applications.
• Nodal Agency: A nodal agency will be established under the Act to monitor compliance and submit periodic reports to the government on the employment status of industries.

SImilar Legislations in Other States

• Haryana State Employment of Local Candidates Act, 2020: This law, which mandated a 75% reservation for state residents in private sector jobs paying less than Rs 30,000 per month, was overturned by the Punjab and Haryana High Court. The court determined that the act exceeded Haryana’s legislative powers by limiting private employers’ ability to hire freely from the open market.
  • The court found that the Act violated constitutional principles of equality (Article 14) and freedom (Article 19), stating that it infringed on the rights of citizens from other states and could lead to similar restrictive measures across the country, creating “artificial walls” within India.
  • The court highlighted that the reservation for locals unreasonably restricted the right of workers to move freely and seek employment across the country.
  • The Act was criticized for imposing regulatory burdens reminiscent of the “Inspector Raj” era, placing undue constraints on private employers.
• Similar Legislation in Other States: States like Andhra Pradesh and Jharkhand have passed similar laws. The Andhra Pradesh High Court has indicated that its state’s Bill from 2019 might also be unconstitutional.

Sharing is caring!