Court: Conditionally Unconstitutional, Job Creation Law Must Be Revised in Two Years

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Chief Justice Anwar Usman leading the ruling hearing for the judicial review hearing of Law No. 11 of 2020 on Job Creation, Thursday (11/25/2021). Photo by Humas MK/Bayu.

Thursday, November 25, 2021 | 17:09 WIB

JAKARTA, Public Relations—For the first time in history, the Constitutional Court (MK) partially granted a formal judicial review petition. The constitutional justices stressed in Decision No. 91/PUU-XVIII/2020 that Law No. 11 of 2020 on Job Creation is formally defective and declared it conditionally unconstitutional at a ruling hearing on Thursday afternoon, November 25, 2021.

In a verdict read out by Chief Justice Anwar Usman, the Court partially granted the petition by Migrant CARE, the Coordination Agency of the West Sumatera Kerapatan Adat Nagari, the Minangkabau customary court, and Muchtar Said.

“[The Court] declares the formation of the Job Creation Law unconstitutional and not legally binding conditionally insofar as not interpreted to mean ‘is not revised in 2 (two) years since this decision is pronounced;’ declares the Job Creation Law remain in effect after until revisions [are made] within the deadline as specified in this decision,” said Chief Justice Anwar Usman alongside the other eight constitutional justices.

In the 448-page decision, the Court also ordered the legislatures to revise the law within two years since the pronouncement of the ruling. If revisions are not made within that deadline, the law is permanently unconstitutional.

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Policies Pending

In addition, the Court ordered the legislatures to postpone all strategic and all-encompassing actions or policies and prohibited them from issuing new implementing regulations in relation to the Job Creation Law.

The Court also ruled that if within two years the legislatures have not finished revising the revisions to the a quo law, the articles or contents of laws that have been revoked or amended by it shall be in effect.

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Formally Defective

The Court in its legal considerations read out by Constitutional Justice Suhartoyo ruled that the formation of the Job Creation Law did not follow definite and standard lawmaking procedures, methods, and systems. During its formation, some of the substance of the bill was changed after it was approved by the House of Representatives (DPR) and the president.

“(The formation of the Job Creation Law) violates lawmaking principles, so the Court holds that the formation process of Law No. 11 of 2020 did not meet the provisions according to the 1945 Constitution, thus, must be declared formally defective,” Justice Suhartoyo stressed.

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To Avoid Legal Uncertainty

The Court then explained the grounds to declare the a quo law conditionally unconstitutional. The Court intended to avoid legal uncertainty and more significant impacts. The Court considered balancing the lawmaking requirements that must be met as formal conditions for a law that fulfils the principles of legal certainty, benefit, and justice. In addition, Justice Suhartoyo read out, it had to consider the strategic objectives of the formation of the a quo law.

“Therefore, in enforcing Law No. 11 of 2020 that has been declared conditionally unconstitutional, juridical consequences arose, so the Court offers the legislatures the opportunity to revise Law No. 11 of 202 according to definite and standard lawmaking procedures and methods in forming an omnibus law that must fulfils basic lawmaking requirements that have been determined,” Justice Suhartoyo stressed.

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New Nomenclature Unnecessary

Next, Constitutional Justice Enny Nurbaningsih stated that the Court had discovered the fact that the Job Creation Law had been named by a new name—Law on Job Creation. Therefore, it understood the Petitioners’ confusion whether the Job Creation Law is a new law or one that revised an existing one. Moreover, Article 1 point 1 of the Job Creation Law stipulates that the Job Creation nomenclature is the creation of jobs through the facilitation and protection for and empowerment of cooperatives and micro, small, and medium businesses; the improvement of investment ecosystem and ease of business; the central government’s investment; and the acceleration of national strategic projects.

“The renaming of a law, i.e. the Law of Job Creation, whose general provisions chapter is followed by the formulation of principles, objectives, and scope, which are further elaborated in chapters and articles related to said scope, means that Law No. 11 of 2020 is not in line with the standard lawmaking procedure as it indicates as if it were a new law when the most substance in Law No. 11 of 2020 constitutes amendments to a number of laws,” Justice Enny read out.

Justice Enny added that in the event of revision of a law, general provisions that contain a new nomenclature, followed by the formulation of principles, objectives, and scope, is not necessary unless the matters to amend in the law concerns those matters. A number of laws amended by the Job Creation Law are still in force, although their enforcement is not emphasized in it. Meanwhile, the principles and objectives of those laws have been stipulated in those laws.

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Not Publicly Accessible

In terms of transparency, Justice Suhartoyo said, in the hearings the Court had discovered facts that the legislatures had not allow for public participation optimally because, although several groups of the community had been called to meet, the academic text and substance to amend by the bill of law had not been revealed in the meetings.

“Thus, the community who were involved in those meetings did not know for certain the materials for amendment that would be combined into Law No. 11 of 2020. Not to mention, the academic text and the Job Creation bill were not readily accessible by the public, when in fact, based on Article 96 paragraph (4) of Law No. 12 of 2011, access to laws is mandatory in order to facilitate the public in providing inputs verbally and/or in writing,” Justice Suhartoyo said.

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Dissenting Opinion

Four of the constitutional justices—Justice Anwar Usman, Arief Hidayat, Daniel Yusmic P. Foekh, and Manahan M. P. Sitompul—had a dissenting opinion. They asserted that, although the Job Creation Law had weaknesses in terms of legal drafting, it was needed. “Thus, we believe that the formal judicial review petition of the Job Creation Law must be rejected,” Justice Arief read out.

They also reasoned that the preparation of the Job Creation Law had been outstanding and meticulous from philosophical, sociological, and juridical aspects in realizing the mandate of the Preamble to the 1945 Constitution, which fundamentally directs the vision, mission, and national goals that must be realized in the nation and state life.

At the same ruling hearing, the Court also rendered rulings for eleven other petitions on the same law—cases No. Nomor 87, 101, 103, 105, 107, and 108/PUU-XVIII/2020, as well as No. 3, 4, 5, 6, and 55/PUU-XIX/2021. Those petitions were declared inadmissible because the Job Creation Law was declared conditionally unconstitutional in the Decision No. 91/PUU-XVIII/2020. As such, the material judicial review petitions were no longer relevant because the object had been lost.

Twelve cases on the Job Creation Law were ruled by the Court at this hearing. The petition No. 87/PUU-XVIII/2020 was filed by the Singaperbangsa Trade Union Federation’s (FSPS) central executive board (DPP), represented by chairman Deni Sunarya and secretary Muhammad Hafidz. They questioned the constitutionality of the provisions on employment agreements made for a specified period of time (PKWT) in Article 81 points 15, 19, 25, 29, and 44 of the a quo law.

Meanwhile, the case No. 101/PUU-XVIII/2020 was filed by the Confederation of Indonesian Trade Unions (KSPI), represented by Said Iqbal and peers, who requested the material judicial review of Articles 81, 82, and 83 of the Job Creation Law. They argued that the Job Creation Law had led to legal uncertainty and restricted their constitutional rights. They argued the a quo law is in violation of Article 18 paragraphs (1), (2), (5), (6), and (7); Article 27 paragraph (2); Article 28D paragraphs (1) and (2); Article 28E paragraph (3); and Article 28I of the 1945 Constitution.

The petition No. 103/PUU-XVIII/2020 was filed by Elly Rosita Silaban and Dedi Hardianto (Petitioners I-II) of the Confederation of All Indonesian Labor Unions (KSBSI). They filed a petition for the formal judicial review of Chapter IV of the Job Creation Law and the material judicial review of Chapter IV Part II of the Job Creation Law, that is Article 42 paragraph (3) letter c and Article 57 paragraphs (1) and (2).

The Petitioners of case No. 105/PUU-XVIII/2020 are the chairman of the Garment and Leather Textile Workers’ Union Federation - All-Indonesian Workers Union Indonesia (PP FSP TSK-SPSI) and 12 individual petitioners. They challenged formally and materially, among others, the second part of Chapter IV of the Job Creation Law: 1) Article 81 point 1 (Article 13 paragraph (1) letter c of Law No. 13 of 2003 on Manpower), which stipulates that work training is organized by the company’s professional training agency; 2) Article 81 point 2 (Article 14 paragraph (1) of Law No. 13 of 2003) that private professional training agencies as referred to in Article 13 paragraph (1) letter b must have regent/city government-issued business license.

The petition No. 108/PUU-XVIII/2020 was filed by advocates Ignatius Supriyadi, Sidik, and Janteri. They challenge Article 6, Article 17 point 16, Article 24 point 44, Article 25 point 10, Article 27 point 14, Article 34 point 2, Article 41 point 25, Article 50 point 9, Article 52 point 27, Article 82 point 2, Article 114 point 5, Article 124 point 2, Article 150 point 31, Article 151, and Article 175 point 6 of the Job Creation Law.

The petition No. 3/PUU-XIX/2021 was filed by Sudarto and Yayan Supyan, the general chairman and secretary of the central executive board of the Federation of Cigarette, Tobacco, Food, and Beverage Workers - All-Indonesian Workers Union Indonesia (FSP RTMM-SPSI). They challenged Articles 154A and 156 of the second part of Chapter IV of Law No. 11 of 2020 on Job Creation. In the petition, they alleged that Chapter IV of the Job Creation Law—dubbed the labor cluster—had greatly harmed the constitutional rights of workers/laborers and workers/labor unions stipulated in the 1945 Constitution.

The general chairman of the Federation of Chemical, Energy, and Mine Workers Union - All-Indonesian Workers Union Indonesia R. Abdullah along with 662 other petitioners challenged Law No. 11 of 2020 on Job Creation formally and materially through their legal counsels in case No. 4/PUU-XIX/2021.

Meanwhile, the case No. No. 5/PUU-XIX/2020 was filed by Putu Bagus Dian Rendragraha and Simon Petrus Simbolon (Petitioners I-II), two persons with disabilities. They requested the formal and material judicial review of Article 24 point 4, Article 24 point 13, Article 24 point 24, Article 24 point 28, Article 61 point 7, Article 81 point 15, and the elucidation to Article 55 point 3 of the Job Creation Law.

The Petitioners of case No. 6/PUU-XIXI/2021, Riden Hatam Aziz and three others, asserted that the Job Creation Law did not have legal certainty because its lawmaking process was formally defective. Thus, in the petitum, they requested that the Court declare the a quo law unconstitutional and annul it.

The petition No. 55/PUU-XIX/2021 was filed by HAkA (Hutan, Alam dan Lingkungan Aceh/Forest, Nature, and Environment of Aceh) Foundation, represented Farwiza and colleagues. The Petitioner believed the elimination of the prerequisite community input to AMDAL documents, which is referred to in Article 26 paragraph (3) of Law No. 32 of 2009 but has been amended by Article 22 point 5 of Law No. 11 of 2020, indicated their factual or potential loss in preventing the environment against any damage due to big-scale projects where environmental impact assessment (AMDAL) is mandatory.

Writer        : Nano Tresna A./Lulu A.
Editor        : Lulu Anjarsari P.
PR            : Raisa Ayudhita
Translator  : Yuniar Widiastuti (NL)

Translation uploaded on 11/25/2021 23:37 WIB

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.