Even after Law No. 11 of 2020 concerning Job Creation (“Job Creation Law”) was enacted and came into effect on 2 November 2020, this Job Creation Law still reaps many pros and cons from the community, let say the problem of its drafting process which is considered materially and procedurally flawed as it is deemed not to comply with the provisions of the legislation drafting and is in contrary to the 1945 Constitution. Thus, the Constitutional Court needs to conduct a formal review of the Job Creation Law against the 1945 Constitution.

The method that has been used when drafting the Job Creation Law is the omnibus law method which has the characteristics of reformulating, negating, revoking a part or all of other regulations. The Job Creation Law itself is a simplification of the 78 laws with different content materials from each other and all the combined laws are still effective except for the articles that are amended in the Job Creation Law. Through the Constitutional Court's Decision No. 91/PUU-XVIII/2020 (“Decision No. 91/PUU-XVIII/2020”), the Constitutional Court assessed that the omnibus law method used in the Job Creation Law is difficult to understand whether it is a new law, an amendment, or a repeal of the law.

In addition, the Constitutional Court considers that the Job Creation Law drafting process does not meet the principles of clarity of formulation and the principle of transparency which are the formal requirements for legislative drafting.

In line with the above considerations, the Constitutional Court decided that the Job Creation Law does not have binding legal force, if within 2 (two) years after the Decision No. 91/PUU-XVIII/2020 has been pronounced, the legislators did not make revision to the Job Creation Law.  Nevertheless, this Job Creation Law remains valid and in effect until the grace period of 2 years as stated previously.

In the event, that the legislators are unable to complete the revision of the Job Creation Law within a grace period of 2 years, the Job Creation Law will be declared unconstitutional permanently and the law or articles or material content of the law that has been revoked or amended by the Job Creation Law is declared to be valid again.

Should there be any queries related to this regulation or to find out if this affects your business or personal interest, please do not hesitate to contact us.