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Fixing jobs law after Constitutional Court ruling
Imagine if the law were considered unconstitutional in its entirety. It would just trigger chaos and uncertainty in Indonesia.
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Women laborers rally against the Job Creation Law. (KSPI/Courtesy of KSPI)
T
he recent Constitutional Court decision on the Job Creation Law has created commotion among legal experts and practitioners. The court declared the legislative process of the law conditionally unconstitutional for several reasons.
The court said the law had adopted the omnibus method (i.e. issuing one new law to amend several types of laws), which was not recognized under the prevailing system. In addition, the court highlighted that the law that had been promulgated was substantially different from the final draft that was agreed upon by the government and the House of Representatives. Finally, the court found a lack of meaningful public participation in the law-making process.
Notwithstanding the procedural issues above, the court still found the law to be valid with a caveat that the government and the House are to rectify the issues within two years. Otherwise, the law will become unconstitutional. The court also ordered that until the issues were revised, the government would have to postpone the implementation of the law relating to matters that were strategic and had broad impacts and would have to refrain from issuing new implementing regulations pertaining to the law.
The decision has led us into unchartered territory, considering that the court has never before rendered a decision granting request on legal formality. What the decision essentially means and how should we go from here are the critical questions.
The court differentiates between legal formality, which deals with the procedural aspects of the law-making process, and the merits of the law. What has been declared unconstitutional is the process, not the merits, which means that the law itself is still valid, including all its implementing regulations that have been issued thus far.
This approach might be seen vague and is full of political nuance because if there are flaws in the legal formality of the law, the law should be declared unconstitutional in its entirety. One might argue differently that the court did not only consider the legal certainty aspect but also the objectives of the law together with the benefits and consequences of the decision for the current circumstances.
To illustrate the importance of the law, the government has reformed the business licensing system by introducing a risk-based approach based on this law. The higher the potential risks posed by business activities, the stricter the control and the greater need for licensing. The type of licensing for a business activity is now determined based on the risk level of such a business activity set by the government. The latest Online Single Submission (OSS) version, which is based on the risk-based approach, was also launched to implement this reform.
