Training Bonds

[cypho26]

I would like fellow ppruners to share with me their experiences or those of people whom they know about the various legal and other issues that come up when a pilot puts in a resignation prior to his completing the full term of the bond.

Specifically would like to know the payment methods usually acceptable to airlines in Africa.Will paying back the bond in installments over aperiod of time be acceptable?or do you have to pay fully?Will resigning before the end of your bond period tarnish a pilots reputation in the industry even if he pays back the money and resigns for personal reasons?

Thanks in advance..

[Kennytheking]

cypho26

Been there done that........

You can resign when you like and you can pay the bond back over as long as you like. One thing I have learnt is that the man holding the cash is in a very strong position. You employer will pressurise you to settle sooner......he wouldn't be a very good businessman if he didn't. You must just know where you stand in terms of the law and act accordingly.

It is just like any civil contract out there. You negotiate the terms and if the employer want to get his money, he will play ball.

Your choice to resign will not affect your reputation although job hopping may raise some questions......

This is written in a South African context.....if your employer is a notorius congolese drug lord then you would probably be better off paying in full immediately.

[sslut]

Did your employer do a credit check on you prior to hiring you and are they registered as a financial institute? In line with the new FICA legislation if not then they actually have no leg to stand on.............
just a thought to mull over.

[snotneus]

sslut, please elaborate on that statement regarding FICA.
thanks

[Kennytheking]

snotneus,

Actually, I think sslut is referring to NCA....the New Credit Act. FICA is legislation that applies to financial entities to prevent money laundering(you know those pesky utility bills proving your address that you have to give to every tom, dick and harry). I think sslut is getting at the fact that you could use the NCA to escape your liabilities, as it places certain repsonsibilities on the lender which could result in them not being able to enforce their rights if they have slipped up.

I don't agree with this point of view as the NCA would then effectively kill off all ability to contract by any parties if this were to be the case. One needs to be sure to differentiate between a loan and a financial obligation that arises as a result of contract......both are forms of contract but a loan is a specific type. I don't think a bond would be covered by the NCA.......you can go argue it in court, but I certainly wouldn't spend a R100k to back such a flimsy argument.

[Doodlebug2]

Negotiate your method of settlement. Claim the taxable portion back from SARS. Takes a while for it to be repaid, but worth the wait. :ok:

[sslut]

My apologies, KtK has the right acronym. The NCA is the thingumagwodgy I was referring to. Lets wait and see it tested in the labour court to see how well the employers stand up to it. I have a feeling this may be sooner than later. The NCA has very specific guidelines as to what the "lender" has to do before they may place credit risk and terms on the "borrower". In this instance the borrower is clearly at risk and unless it has been proven that the loan can be repaid, they are not allowed to offer credit which in this case is the "bond". It may well have a negative impact on training bonds in the future, lets wait and see how employers react to it. I know a few of the smaller guys are looking at the legal options already.

[hatman]

How sad. These guys win thier case. Aircarft owners/operators no longer able to give bonds. So no more training. Better to get guys who are rated already! So now no loans for traing do it yourself!!

[sslut]

The best mindset is to create an environment in which the crew don't want to leave. The old carrot on a stick trick works well for pilots as we seem to classified in the same league as donkeys and asses. Seriously, this is being debated regularly now and the whole mindset is wrong trying to prevent people from leaving and having all sorts of nasty clauses, rather motivate them want to stay longer. Nuff said!!

[JCO7]

I'm not a legal expert but I'm not sure that a training bond falls under the scope of the NCA. There isn't really a credit agreement between the employer and employee. Even in the case where the employee leaves before serving his time, there is no undertaking by the employer to allow credit terms to the employee. In fact the training bonds that I have seen does not say anything about allowing the employee to repay the amount owed in installments, even though this is the way it normally happens in practice. Therefore if one tries to be hardegat with the company they could theoretically turn around and demand the money immediately as you signed a contract stating that this money would be due to the company if you should leave early. Companies don't operate like this because it wouldn't be good for their reputation, but I disagree that he who "holds the cash" is in a position of authority. In any event I certainly wouldn't count on the NCA to get me out of the obligations of a training bond.

[Gooneybird]

sslut wrote:The old carrot on a stick trick works well for pilots as we seem to classified in the same league as donkeys and asses.

God damn sslut, you sound just as bitter as me :}

Depends on the bond,some are fairly short term and therefore fair enough. I've been told that companies make these bonds back in about 6 months though and I do feel that the terms of the bond should only reflect the costs to the company and not a stick to beat their employees with for years to come.

[Gooneybird]

Specifically would like to know the payment methods usually acceptable to airlines in Africa.Will paying back the bond in installments over aperiod of time be acceptable?

I don't know the specific legislation but if you owe money to a company and offer to settle in installments then I think most would accept this for the simple reason that a court proceeding would only likely get the same result.

[Kennytheking]

JCO7,

I'm sorry mate, perhaps you did not understand what I meant when I said the person holding the cash has the power.

You have obviously never had to try and get money out of some-one......it is very expensive and time consuming, no matter how watertight a contract is. The best way is by negotiation(irrespective of the contract terms) and that implies that I can pay as I wish ergo my statment that the person holding the cash has the power.

I have been on the receiving end of this from a certain company aligned with SAA. I left after 18 months and they wanted their full amount back. I made an offer and they rejected it(Hardegat I think was your term). They ended up accepting my offer 3 years later just before we were due in court. Even after my legal fees, I had the use of R100k for 3 years which more than makes up for the effort.

Think about this......what can they do? Take your licence away? Give you a bad reference? Throw you in jail?

If you make an offer, as long as it is anywhere in the realms of reality, they will have a tough time justifying spending many thousands to take you to court and what is the best outcome they can hope for.....maybe make you pay a bit more at best.

Bottom line is that if you have the money and you are prepared to pay, then you are in a super powerfull position. Obviously if you are not prepared to pay, then whether you have the money or not is irrelevant.

[sslut]

hehe Gooney - used to be bitter, now I'm just twisted!!!
Honestly just looking for a fair deal where both parties are happy and neither feels too badly rogered in the process.

[CJ750]

Guys forgive me if i have this wrong but this sounds typically pilot thinking

"give me everything for free, i am owed everything for my hard work"

I know there are SOME unscrupulous operators out there but what about an operator seeking protection for spending their cash on training somebody and quite frankly there are also some unscrupulous pilots as well. I have been on both sides and have never been outdone by any employer and am prepared to sign a bond with my present employer only for a new conversion but refuse to sign for any refresher training. A previous employer tried to get me to sign a bond for sim training and wanted to include hotel accommodation and S & T which i considered unfair and on top of that i had 1000 hours on type.

A bond is there to protect both pilot and employer but is open to exploitation by both parties.