Source: Parochial law: States need to implement labour rights uniformly and not rely on protectionism (November 22, The Hindu)
- Unconstitutional Legislation: The Punjab and Haryana High Court has declared the Haryana State Employment of Local Candidates Act, 2020 invalid. The Act’s provision mandating 75% job reservation for State residents in private jobs with salaries below ₹30,000 has been termed unconstitutional.
- Overstepping State Powers: The court highlighted that such legislation exceeds State authority, infringing upon the fundamental rights of citizens. It stated that private sector hiring should be conducted freely and without state-imposed limitations.
- Violation of Fundamental Rights: The Act was found to breach the equality principle articulated in Article 14 and the freedom granted under Article 19 of the Indian Constitution.
- Discrimination Against Non-Locals: By prioritising local candidates, the Act discriminates against non-residents and could trigger similar restrictive laws in other States.
- Imposition on Private Employers: The court likened the Act’s requirements for private companies to the bygone era of “Inspector Raj,” viewing them as unfairly restrictive practices.
Labour Market Protectionism
- Economic Impact of Interstate Job Restrictions: Interstate job barriers hinder the national economy. These restrictions force individuals to work within their home states, which may have fewer opportunities, suppressing economic growth across the country.
- Local Resentment Versus Migrant Exploitation: Locals in prosperous regions often resent migrant workers for taking job opportunities. This has led to hasty legislative action by governments aiming to appease local constituents.
- Labour Market Segmentation: Employers can exploit migrant workers, resulting in a divided labour market. Migrant workers often endure unfavourable conditions, while locals possess greater negotiating power.
- Ensuring Equal Rights for Migrant Workers: To genuinely protect all workers, states must enforce equal labour rights for migrants, which would balance the playing field and deter employer exploitation.
- Conclusion: Adopting a protectionist stance in the labour market is not a sustainable solution. Ensuring fair treatment and rights for all workers is paramount.