Bajandi, Jay Anthony C

The principle of party autonomy in contracts is not an absolute principle. Parties may not contract away certain law
provisions especially matters impressed with public interest such as labor and employment.

Pakistan vs Ople

28 Sept 1990
Feliciano, J.

Parties:
Petitioners Pakistan International Airlines Corp
Respondents Hon. Blas F. Ople, as minister of Labor, Hon. Vicente Leogardo, as deputy minister, Ethelynne Farrales and Maria
Moonyeen Mamasig, respondents

Facts:
Pakistan International Airline Corp (PIA) has two separate contracts of employment with Ethelynne Farrales and Maria
Moonyeen Mamasig
The contract stipulates that the duration of the employment is for three years and that PIA reserves the right to terminate
the contract at any time before by giving notice in writing in advance and payment of wages equivalent to one month
One year and four months prior to the expiration of the employment contract, PIA gave the advanced notice to Farrales and
Mamasig and terminated them thereafter pursuant to the contract provisions on termination.
Both Farrales and Mamasig filed complaints for illegal dismissal and non-payment of benefits and bonuses against PIA
with the Ministry of Labor and Employment (MOLE)
MOLE ruled in favor of the dismissed employees and ordered their reinstatement and backwages pursuant to the
provisions of the Labor Code. No employer can dismiss an employee with at least one year of service without the
approval of the DOLE
PIA appealed and argued that the provisions in the contract of employment should be controlling as the contract is the law
between the parties rather than the Labor Code

Issue:
W/N the termination provisions of the contract of employment between PIA and the dismissed employees is valid?

Ruling:
SC: NO. Decision is sustained. Such stipulation is contrary to public policy and thus cannot be used to override other provisions of
law.
A contract freely entered by the parties should be respected since the contract is the law between the parties. (GENERAL
RULE)
The principle of party autonomy in contracts is not an absolute principle. Parties may not contract away certain law
provisions especially matters impressed with public interest such as labor and employment. (EXCEPTION)

Notes: