The Constitutional Court (MK) issued an "ambiguous" decision by stipulating Law Number 11 of 2020 on Job Creation (UU Cipta Kerja) as "conditionally unconstitutional" and must be revised within two years.
The Constitutional Court in its decision did not expressly annul the Job Creation Law even though a formal flaw was discovered in its formation. In this case, the President and the House of Representatives (DPR) are only required to revise the omnibus law for a maximum of two years since the ruling was issued. If the revision is not made according to the given period of time, the Job Creation Law is declared permanently unconstitutional and is no longer legally binding.
During this period, the government is also prohibited from issuing strategic policies and new implementing regulations related to the Job Creation Law.
However, relevant policies or regulations that have been issued remain in force during the revision period.
Instead of bringing clarity to the community, the Constitutional Court's decision has created new uncertainty. "Conditionally unconstitutional" is considered a joke by legal practitioners because it shows the "half-hearted" attitude of the Constitutional Court as the highest law enforcement of the constitution.
Theoretically, the "conditionally unconstitutional," which became the Constitutional Court's decision, has two concepts. First, the law under review remains temporarily valid until the required revisions have been made. Second, the law is declared temporarily invalid until the conditions for revision have been met.
The Decision of Constitutional Court No. 91/2020 number 4 jo. number 7 states that the Job Creation Law remains valid for up to two years, but it suspends all policies that are strategic and have a broad impact. In addition, new implementing regulations related to the Job Creation Law shall not be issued. The decision did not elaborate further about any "strategic and widely impactful" measures.
In fact, the Job Creation Law is a regulation in statutory level that certainly regulates the substance of material that is strategic and has a broad impact. Thus, there should be no possibility of an article that is "excluded" from the suspension.
However, in the concept of “distribution of power”, the government, in this case, the president as a chief executive, has the authority to enforce laws.
Therefore, without making a standard “strategic and widely impactful” measure, the government may solely interpret any provisions of the Job Creation Law that are not “strategic and widely impactful” so that it can still be implemented.
Furthermore, the non-justification of issuing new implementing regulations for a two-year period will actually have an impact on the provisions stipulated in the Job Creation Law that cannot be carried out, particularly for regulatory materials that are specifically ordered to be further regulated in Government Regulations. The substance of the ruling has the potential to create widespread legal uncertainty because it has materially been regulated in the Job Creation Law, but no implementing regulations can be made.
For the record, Constitutional Court's Decision Number 91/2020 number 7 can be used as a legal basis for submitting a judicial review to the Supreme Court on Government Regulations of the Job Creation Law and its derivative legal products, both those that have been promulgated before and after the Constitutional Court's decision has been read. Surely, in the future, it potentially creates legal uncertainty in Indonesia.
With this decision, the Constitutional Court has effectively closed the possibility for a judicial review of the Job Creation Law for further enforcement.
It is because, in 10 other decisions, the Constitutional Court stated that the Job Creation Law was no longer an "object of dispute" over the judicial review of the law against the 1945 State Constitution. The court's decision is final and binding or mandatory to comply.
In addition, Constitutional Court's Decision Number 91/2020 provides a message that lawmakers - the President and the House - must comply with the standards and rules for the formation of applicable laws and regulations.
Not to forget, the Job Creation Law has the potential to be permanently unconstitutional if it is not revised within two years. The consequence of the "permanently unconstitutional" is that the laws, articles and materials previously replaced by the omnibus law shall be re-enacted and has legal force.
Although the main purpose is to fill the legal void, the return of statutory material with a very broad substance can result in legal uncertainty that occurs in various sectors that are previously regulated under the Job Creation Law.
In addition, many legal products, both at the statutory level and their derivatives, which refer to the Job Creation Law—such as Law Number 7 of 2021 on Harmonization of Tax Regulations—have the potential to become “new legal objects” for judicial review.
It can be concluded that the impact of the Constitutional Court's decision has the potential to create new legal uncertainty, both on materials that have been regulated in the Job Creation Law and its derivative legal products.
For information, legal uncertainty (uncertainty of law) is one of the main issues in the risk of investing in a country. Meanwhile, the purpose of the establishment of the Job Creation Law is to increase investment and employment.
The Constitutional Court has the authority to test the suitability of legal products with the 1945 State Constitution as the basis of all legislation in this country. The Constitutional Court's decision is final and binding, which means that it must be implemented and no legal action can be taken to replace or annul it.
In relation to the formal review of the Job Creation Law, the Constitutional Court in its decision requires improvement of methods and fulfillment of the principles of law formation – as regulated in Law Number 12 of 2011.
Particularly, related to the principles of transparency and community participation.
If the Job Creation Law is deemed violating the provisions of the constitution and Law No. 12 of 2011, why was it not canceled, so that lawmakers and the House can fix it? If the legal void is the concern, the Constitutional court can actually enforce the previous regulations that were amended by the Job Creation Law.
As a result, it is not the Job Creation Law that will be revised, the Government and the House will actually revise Law Number 12 of 2011. The objective is to accommodate the omnibus law concept, which is the spirit of the Job Creation Law.
**) A short version of this article was published in?Kumparan.com?on 6 December 2021.