People are willing to engage in these schemes because they can see no way ahead. A dormant frozen ATPL with a MEP rating sat on their side board is hardly what they sat out to achieve!
They believe that IF they can get 500 - 1000 hours on a commercial type there might be a job. They are probably right if you give it some time.
I'm not sure that they are an 'employee' but more a private individual on a 'training scheme'. I don't think employment law can therefore be applied.
Remember: half the don't pay to fly gang on here are the first to be running down this track armed with daddy's fat wallet!!!
