The government and lawmakers are scrambling to address the consequences of a Constitutional Court ruling that declared the Job Creation Law – the controversial centerpiece of President Joko “Jokowi” Widodo’s ambitious reform agenda – “conditionally unconstitutional”.

The court ruled that the government and the House of Representatives would have to pass a revised, constitutionally compliant version of the law within two years.

If they fail to do so, the law will be permanently repealed and the regulations it sought to replace will be reinstated. In the meantime, the jobs law will remain in effect.

The ruling has raised a number of questions, including whether an unconstitutional procedure renders the resultant law void and whether revising a 2011 law on legislative procedure would be enough to make the jobs law valid again. The court held that because the 2011 law did not specify an “omnibus” form of legislation, the Job Creation Law, which used the omnibus method of revising multiple laws at once, was procedurally invalid.

Opinions are divided on what would bring the law into accordance with the constitution. The government says policymakers must pass a new version of the law, but House Legislation Body (Baleg) member Firman Soebagyo has said he believes amending the 2011 law alone will be enough to make the law valid. Constitutional law experts and labor unions say policymakers should start both the legislative process and the discussion of the content of the jobs law from scratch.

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Economists fear the ruling will allow business uncertainty to linger in the country, depressing investment.

 

Compromise

The court held that the Constitution required legislation to be carried out in accordance with the 2011 law on legislative procedure, which does not recognize the concept of an omnibus law. The court also noted that the deliberation of the bill lacked transparency, had insufficient public participation and that the bill had undergone multiple changes after being approved by the House. Nonetheless, the bench acknowledged that the law was intended to create jobs and attract investment.

In a bid to strike a "balance between procedural propriety and the strategic goals of the jobs law", the court declared the law conditionally unconstitutional and gave policymakers "a chance to fix the process".

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The vote was 5 to 4, with chief justice Anwar Usman – a two-time justice appointed by the Supreme Court – joining three other justices in dissent.

The court also ruled that the government should not issue any derivative regulations while it was redoing the lawmaking process.

 

Dissenting opinions

In a rare split for the court, two separate dissenting opinions were filed.

"Even though the law had many weaknesses in the drafting process, there is an immediate need to make a cross-sector law using an omnibus method," Anwar and justice Arief Hidayat, a House appointee, wrote in their joint dissent. "Thus the petition should have been rejected."

Manahan Sitompul, another two-time appointee from the Supreme Court, and Daniel Yusmic Foekh, a presidential appointee and the newest arrival on the bench, having been appointed in January of last year, wrote that the government and lawmakers had heard sufficient input from the public, including labor groups.

They said the court should have declared the law constitutional because while the 2011 law on legislative procedure did not establish an omnibus process, in practice, the method had been used for passing bills in the past, including the 2017 Elections Law, which altered three election-related laws at once.

They said policymakers should be required to revise the 2011 law to accommodate the omnibus process within two years and that they should be permitted to revise the jobs law afterwards using the omnibus method.

 

Substantial changes

Some observers contend that even though the court’s objections were mostly procedural and the ruling only mandated a revision to the lawmaking process, an unconstitutional process automatically renders a law null and void, thus the old regulations should remain in force.

"[The jobs law] should be frozen. I do not understand why the Constitutional Court did not repeal the law and reinstate the old laws since the legislative process had very serious flaws,” said Padjadjaran University constitutional law professor Susi Dwi Harijanti.

Read also: Business uncertainty likely result of jobs law ruling

Legal experts have also asked policymakers not to take the easy way out and only redo the procedural process of the jobs law or revise the 2011 law.

"The drafting of the [jobs] law had very fatal [flaws]," she said. “It is impossible to just fix the procedure without deliberating the contents of the law. In my opinion, [changes] should begin from the discussions of the contents," Susi said.

She said policymakers should invite meaningful public participation at all stages of the lawmaking process, from proposing the draft bill to passing the law.

 

Precedent for proper lawmaking

The petition represented the first procedural objection to a piece of legislation to be accepted by the court, fueling hopes that the House and the government will be more careful with legislative procedure in the future.

Constitutional law expert Feri Amsari, who was an expert witness in a previous jobs law petition, said this set a precedent for similar procedural reviews in the future and, at the same time, opened the door for the public to challenge other problematic laws.

At least two other contentious pieces of legislation were passed last year: the Mining Law and the Constitutional Court Law. They were enacted without transparent deliberation, eliciting accusations from the public that lawmakers had used the restrictions of the COVID-19 pandemic as cover to avoid public scrutiny.

These laws came after the October 2019 passage of a revised KPK Law, which also followed a similar pattern of opacity and haste, drawing public criticism.