Legal certainty

Kompas – January 4, 2023

Widodo: Legal certainty for investors (Paper glider reads Jobs Law Perppu 2/2022)

Worker: How about for us Mr?

Civil society activists, trade unions and legal experts have reacted angrily to a move by President Joko "Jokowi" Widodo to issue Government Regulation in Lieu of Law (Perppu) Number 2/2022 to replace the 2020 Omnibus Law on Job Creation.

The original law – which was the subject of massive and often violent protests – was declared conditionally unconstitutional by the Constitutional Court in November 2021, and the government was ordered to revise the law within two years.

The government however chose to circumvent the court's ruling by issuing a Perppu on December 20 (just before the Christmas and New Year holiday break when it hoped public reaction would be minimal) which the House of Representatives can be expected to pass into law as soon as it returns from recess later in this month.

The government justified the move on the grounds that the Perppu was necessary to provide legal certainty and address a legal vacuum in the perception of domestic and foreign investors, and to anticipate an economic crisis in the wake of an expected global economic slowdown and the impact of the Ukraine-Russian war.

Legal experts however say that the constitutional requirements for issuing a Perppu – that a compelling crisis or a legal vacuum exists – have not been met.

They point out that the government has repeatedly reassured the pubic that Indonesia will be largely immune from the impact of the global economic slowdown (with economic growth in 2023 predicated to be as high a 5.3 percent) and despite being declared conditionally unconstitutional, the law is still in effect.

Most Indonesians appear to agree with these criticisms. A Kompas Research and Development (Litbang) survey found that the majority of the public or 61.3 percent of respondents do not believe that the Jobs Law Perppu is urgent.

The survey also showed that most respondents or around 25.3 percent believe that the Jobs Law only benefits business and employers and 48.2 percent said that it creates uncertainty for ordinary people because it makes it easier to dismiss workers, expands contract labour and outsourcing and reduces severance pay.