That would be my interpretation - and I'd say any legal decision would come down to how the person came to work for nothing in the first place. If a pilot walks into a charter company that pays award rates without complaint and says "I really want to work and I'll do it for nothing" and they accept, not sure if any law's being broken.
They would have to be deemed an employee though, with the employee file that goes with it, and if that same person then demanded to commence being paid 2 weeks later though, and were sacked as a result - then that might be some interesting legal ground.
Couldn't agree more about the erosion of the industry - it's definitely becoming a race to the bottom at all levels of aviation.