Yep Jonkster, I have had fuglies come in and offer to pay me for the chance of getting some work instructing. They are shown the door sharpish.
Quite apart from anything else, if they are so woefully unprepared for the real world that they beg to be exploited then they are also woefully unprepared to be a professional pilot.
And yes, instructors white ant each other and operators white ant each other. If they all paid decent wages (and the award is a lot less than a decent wage) then we could all make a decent living. Often these schools are running other tax scams as well "Sign here and pretend that you want to do a CPL and I won't charge you GST!" Sadly, they keep getting away with it, cheating their staff, cheating on super, compo, tax, and unleashing a fugly with zero public liability cover.