Will local job quotas pass the legal test? | Explained Premium

The Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024, which aims to provide reservation for Kannadigas in the private sector in the State, has been put on hold after severe backlash from business leaders and industry representatives.

The story so far: The Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024, which aims to provide reservation for Kannadigas in the private sector in the State, has been put on hold after severe backlash from business leaders and industry representatives. The Bill was cleared by the Cabinet, but is yet to be introduced in the Assembly. The government has promised wider consultations with stakeholders before it takes the next step. The legality and constitutionality of such quotas for local candidates, however, are in doubt, as similar steps elsewhere have run into legal impediments.

The Bill made it a rule that any factory, industry or establishment must appoint local candidates to 50% of its managerial category and 70% of its non-managerial category.

‘Local candidate’ is defined as anyone born in Karnataka, domiciled for at least 15 years in the State, and who can read, write and speak Kannada. Candidates not possessing a secondary school certificate with Kannada as a language must pass a Kannada proficiency test prescribed by a nodal agency.

Where qualified or suitable candidates are not available, the Bill gives three years to the establishments to train and engage local candidates. They may also apply to the government for relaxation of norms, but the relaxation cannot be less than 25% for management category and 50% for non-management category.

Business and industry responded with alarm on hearing of the features of the proposed Bill. They felt that such measures would drive out companies from the State and impact foreign investment. NASSCOM, the national lobbying body of the software industry, said it was deeply disturbing. The Bill, it felt, would “hamper the growth of the industry, impact jobs and the global brand for the State”. Many expressed concern over the impact of such measures on Karnataka’s leading position in technology and described it as regressive and short-sighted.

EDITORIAL | Wrongheaded policy: On the Karnataka jobs-for-locals bill

Andhra Pradesh, Haryana and Jharkhand are among the States that have tried to bring in legislation to mandate reservation for domiciles or local residents in the government or private sector. The Andhra Pradesh Employment of Local Candidates in the Industries/Factories Act, 2019, sought to introduce 75% reservation for local people in any industry, factory, joint venture or project taken up in the public-private partnership mode. It also gave a three-year period for training and engaging local candidates, if suitable candidates were not available. The Act has been challenged in the Andhra Pradesh High Court, but the government itself has not been zealously implementing its provisions so far.