The legal knot of domicile quota

Policy decisions may escalate tensions between migrant labourers and local population due to discriminatory treatment

The Karnataka government recently proposed a bill to provide 50 per cent reservation in management jobs, 75 per cent in non-management employment, and 100 per cent of blue-collar ‘Group C and D’ jobs for Karnataka domiciles in the private sector. However, due to backlash from various industry stakeholders, the bill has been temporarily put on hold. This is not an isolated incident. Previously, the state governments of Andhra Pradesh, Jharkhand, and Haryana tried to implement local reservations for private sector jobs, but the Supreme Court has yet to decide on the validity of these legislations.

The Supreme Court has set legal precedents on the status of domicile-based reservations in India. The first landmark judgment on this issue was Dr Pradeep Jain vs Union of India (1984), where the court upheld the constitutional validity of domicile-based reservations. The court based the reasoning of its judgment on the principle of state interest and the region’s claim of backwardness.

The state’s interest in promoting the welfare of its residents can arguably justify a reasonable classification between residents and non-residents. The principle of state interest was also highlighted by the apex court earlier in DP Joshi vs State of Madhya Bharat (1955).

The Supreme Court in Saurabh Chaudhari and Ors vs Union of India and Ors also followed the ratio of the Pradeep Jain case. These judgments laid the foundation for domicile-based reservations in the country and served as a check for their constitutional validity.

Andhra Pradesh was the first state to introduce a 75% domicile reservation in the private sector through the AP Employment of Local Candidates in Industries/Factories Act, 2019. This was later challenged in the Andhra Pradesh High Court, where the court observed that it might be unconstitutional and directed the government to check the constitutional validity of the bill. The Haryana government also introduced a private sector domicile reservation guaranteeing 75% reservations for locals. The Punjab and Haryana High Court quashed this legislation in IMT Industrial Association vs State of Haryana (2023). Later, the Jharkhand government also introduced legislation guaranteeing reservations for locals in the private sector. These legislations are under the legal scrutiny of the Supreme Court.

The state governments display the evocative banner of giving employment opportunities for the “sons of the soil”, which finds resonance in the words of Justice Bhagwati in the landmark Pradeep Jain case. Domicile-based reservations in employment represent a tussle between populist policy measures of government and constitutional morality. While these legislations are designed to promote the cause of the local population, they potentially challenge the principles of constitutional morality envisaged in Article 15 and Article 16 of the Constitution, which provide equality before the law and prohibit discrimination based on place of birth or residence. 

The primary argument of private employers against these legislations is the infringement of their fundamental right granted under Article 19(1)(g) of the Constitution. This argument also found its weight in IMT Industrial Association v. State of Haryana, where the Punjab & Haryana HC observed that conditions impairing a person’s right to carry on occupation, trade or business freely are violative of fundamental rights. Such conditions effectively transform private employers into agents of the state, thereby infringing upon their fundamental right to conduct business freely.

Furthermore, the migrant workforce of the country argued against these legislations, as they view them as an infringement of their ‘right to occupation’. The migrant workforce constitutes a large portion of our demographic landscape, with more than four crore of them in the country. Not surprisingly, these numbers are very high in manufacturing states like Andhra Pradesh, Gujarat, Maharashtra, Karnataka, Tamil Nadu and Haryana. Karnataka alone contributes more than 30 lakh people to the interstate migrant workforce. Such policies will also impact the lives of these migrant workers, as most of them belong to the blue-collar job market where the domicile quotas are most prevalent. 

The observations of Justice Bhagwati in Dr Pradeep Jain’s judgement should resonate with the states. These policy decisions may escalate tensions between migrant labourers and the local population due to discriminatory treatment. These legislations also going to impact employers, who find this as a challenge to their fundamental rights. The legislation also raises fundamental questions about its constitutional validity — whether the government can direct private organisations to give preferential treatment on the grounds of residence, which is yet to be decided by the Supreme Court. It is pertinent for the SC to consider this issue in guiding future policymaking.

(The writer is a student at Dharmashastra National Law University, Jabalpur)