On 25 November 2021, the Indonesian Constitutional Court (“Constitutional Court”), through Decision No. 91/PUU-XVIII/2020 (“Decision 91/2020”) has declared that Law No. 11 of 2020 concerning Job Creation (“Job Creation Law”) is “conditionally unconstitutional”.

The Decision 91/2020 does not necessarily revoke the Job Creation Law. However, due to the conditionally unconstitutional status, Legislators will have to rectify the Job Creation Law and postponed the issuance of any new implementing regulation.

Decision 91/2020 Key Rulings

1. To declare that the formation of the Job Creation Law contradicts with the Constitution of the Republic of Indonesia and conditionally will have no legal binding power if it is not revised within the period of 2 (two) years since the date of Decision 91/2020;
2. To declare that the Job Creation Law shall remain in effect until the revision is made within the period of 2 (two) years;
3. To order the legislator to revise the Job Creation Law within 2 (two) years as of the date of Decision 91/2020, otherwise the Job Creation Law shall become permanently unconstitutional;
4. To declare that in the event the revisions were not made within the period of 2 (two) years, any and all articles or provisions of law that have been revoked or amended by the Job Creation Law will be declared to be reinstated; and
5. To declare the suspension of all strategic and broad-impact actions/policies and prohibition of issuance of new implementing regulations in relation to the Job Creation Law.

Considerations that Lead to “Conditionally Unconstitutional” Decision

1. Contradictory with the Mandatory Procedure

The petitioners argued that the Formation of Job Creation Law contradicts with the Mandatory Lawmaking Procedure under Law No. 12 of 2011 on the Formation of Laws and Regulations as amended by Law No. 15 of 2019 on the Amendment of Law No. 12 of 2011 on the Formation of Laws and Regulations (“Law 12/2011”).

Job Creation Law was drafted using the omnibus law method which has not been recognized under the Indonesian legal system which raised the argument that the method causes it to be unclear whether the Job Creation Law is classified as a new law, an amendment law, or a revocation to existing law.

2. Lack of Public Participation in the Lawmaking Process

As stated in Regulation of the People’s Representative Council of the Republic of Indonesia No. 2 of 2020 concerning the Formation of Laws, the formation of laws required obtaining public input. Prior to the drafting of new laws, The House of Representatives (DPR) is required to announce the lawmaking plan through mass media, both print and electronic, and/or make a working visit to acquire public input.

In the lawmaking process of the Job Creation Law, The Constitutional Court pointed out the lack of public participation. Although several communities and/or organizations were included, the Constitutional Court requested the legislators to ensure better public participation before any laws are issued.

3. Significant Changes After Enactment

According to the Petitioners, there have been changes to the material content of the Job Creation Law after the joint approval of the House of Representatives (DPR) and the President which are not only technical in writing but also substantial changes, including errors in quoting.

There were at least 3 (three) versions of the Job Creation Law circulated in public, which contents are significantly different from the official version of the law after the Job Creation Law was ratified by the House of Representatives (DPR) and the President.

The House of Representatives (DPR) testified that the differences in the drafts and ratified version of the Job Creation Law are only in wording and formatting errors. However, according to their review and comparisons, the Constitutional Court states some substantial changes exist.

Conclusion

The Job Creation Law has been declared to be conditionally unconstitutional by Decision 91/2020. Due to the decision, Legislators will have to introduce a rectification to the Job Creation Law within 2 (two) years since the date of the Decision 91/2020, otherwise, the Job Creation Law will become unconstitutional permanently. Within such period, the Constitutional Court also restrict the issuance of new laws related to the Job Creation Law. As for any and all articles or provisions of law that have been revoked or amended by the Job Creation Law will be declared to be reinstated in the event that the legislator failed to provide revision to the Job Creation Law within the 2 (two years) period. The considerations that lead to such decision, among others, due to the formulation of Job Creation Law that used the omnibus law method is deemed contradictory to Law 12/2011, the lack of public participation in the lawmaking process and the many substantial changes after the enactment.

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