The more I think about it, the more I'm convinced that Pay2Fly schemes are unlawful according to British Employment Laws. However, I can see why it would be difficult for lawyers to spot the illegality. It's due to ignorance of how pilots obtain their qualifications and are licensed.
Lets remind us, in order for an airliner to fly from A to B it must be crewed by two ______ pilots (I will simply refer to them as pilots for now). Ignoring the fact that airlines use agencies to mask the truth, assuming the two pilots are direct employees. Ordinarily they both have to be paid a mimimum wage.
However, in the P2F scenario, the inexperienced pilot is not paid at all. Instead he is charged a heavy sum with the airline claiming that they are providing "training" at a cost and that too to another company (the TRTO) who decide to send their own "trainees". This assures that the outsider sees the whole affair as a wholly commercial transaction.
Here's where they have managed to delude people within employment law who might have otherwise spotted the illegality of it all... Most lawyers would assume that if it is training then the airline is within right to receive payment. However what they fail to see is that "training" is for the unqualified. As a type rated pilot one is fully qualified to do a job and requires no further training according to the regulatory body's rules and regulations. Sure they require supervision but that's not the same thing.
Clearly then, line "training" cannot be used as an excuse for an airline to say that they are providing training services. It is not a form of "training", it is the airline selling right hand seat time for the individual pilot to build experience and avoiding the need to therefore hire a fully paid employee who they would have to otherwise pay a minimum wage.
If the airline claims they are truly providing "training" then the new pilot is not qualified and shouldn't be operating a large aircraft with fare paying passengers.