Pilot Contract
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when i sober up i have decided to write a pilot employment manual which has accurate research on a number of these legal issues feel free to PM me if you want anything added to the list for things to be cleared up.
I am planning
Section 1: Advice for the fresh CPL Instructor Vs Instrument (just simple pro's and con's of each no hear say or anacdotal BS that sometimes makes it way onto this forum)
Section 2: Finding a Job and what to put on Resume (i dont give a sh!t about your life history in scouts) and what to say in interviews
Section 3: Networking and making friends (without being the airport b!tch)
Section 4: What should i be getting paid and how should i be employed
Section 5: Stuff you need when you make a mistake (crashing planes, flying too low and CASA generally giving you a hard time)
Section 6: How to aviod 3 ex wives as an airline pilot, thats right i said prenup
Actually you can write section 6 yourselves ill just leave a space to put a photo of the boat you used to have
I am planning
Section 1: Advice for the fresh CPL Instructor Vs Instrument (just simple pro's and con's of each no hear say or anacdotal BS that sometimes makes it way onto this forum)
Section 2: Finding a Job and what to put on Resume (i dont give a sh!t about your life history in scouts) and what to say in interviews
Section 3: Networking and making friends (without being the airport b!tch)
Section 4: What should i be getting paid and how should i be employed
Section 5: Stuff you need when you make a mistake (crashing planes, flying too low and CASA generally giving you a hard time)
Section 6: How to aviod 3 ex wives as an airline pilot, thats right i said prenup
Actually you can write section 6 yourselves ill just leave a space to put a photo of the boat you used to have
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If you need flying advice ask a pilot. If however, you need legal advice...
There's no separate and distinct legal test to determine if an individual is a contractor or an employee. The relationship is covered by a number of different legislative areas, including superannuation guarantee and OH&S, but primarily we look to the Independent Contractors Act 2006, together with consequential amendments to the Workplace Relations Act.
To quickly dispel a popular urban myth, there's no all encompassing test based on tenure. There's absolutely no reason what so ever why an independent contractor cannot derive 100% of his income for an undefined period from a single source.
Generally speaking, these are the things to consider. Control over work, independence, payment, commercial risk, ability to delegate, ownership of tools and equipment.
There's a number of things which make our friend the Contracted Pilot look and smell like a contractor.
1. There is a written contract in place between The Principal and himself
2. The pilot is responsible for his own tax and super (except even withstanding the contract arrangement, the Principal may still be required to hold super because of an interesting provision of the Superannuation guarantee)
3. The pilot supplies his own uniforms, equipment, charts etc and is not reimbursed
4. The pilot has substantial commercial risk. He's liable for damage to the aircraft. THIS IS AN IMPORTANT CONSIDERATION. Employees are normally indemnified from risk by an Employer.
5. The pilot is independent, in that the contract has no exclusion clause preventing him from working elsewhere
Please note that I can just as easily drum up legal argument that makes him look like an employee. My point is that you should be extremely careful in saying that he's undoubtedly an employee because that most certainly is incorrect.
Also, any allusion to the fact that lawyers are happy to carelessly draw contracts because they don't expect them contested is ridiculous. Whom better than a lawyer to understand the very real risk in this day and age of attracting a law suit for professional negligence? Most lawyers charge by the hour, so why wouldn't one take the time to get it right?
There's no separate and distinct legal test to determine if an individual is a contractor or an employee. The relationship is covered by a number of different legislative areas, including superannuation guarantee and OH&S, but primarily we look to the Independent Contractors Act 2006, together with consequential amendments to the Workplace Relations Act.
To quickly dispel a popular urban myth, there's no all encompassing test based on tenure. There's absolutely no reason what so ever why an independent contractor cannot derive 100% of his income for an undefined period from a single source.
Generally speaking, these are the things to consider. Control over work, independence, payment, commercial risk, ability to delegate, ownership of tools and equipment.
There's a number of things which make our friend the Contracted Pilot look and smell like a contractor.
1. There is a written contract in place between The Principal and himself
2. The pilot is responsible for his own tax and super (except even withstanding the contract arrangement, the Principal may still be required to hold super because of an interesting provision of the Superannuation guarantee)
3. The pilot supplies his own uniforms, equipment, charts etc and is not reimbursed
4. The pilot has substantial commercial risk. He's liable for damage to the aircraft. THIS IS AN IMPORTANT CONSIDERATION. Employees are normally indemnified from risk by an Employer.
5. The pilot is independent, in that the contract has no exclusion clause preventing him from working elsewhere
Please note that I can just as easily drum up legal argument that makes him look like an employee. My point is that you should be extremely careful in saying that he's undoubtedly an employee because that most certainly is incorrect.
Also, any allusion to the fact that lawyers are happy to carelessly draw contracts because they don't expect them contested is ridiculous. Whom better than a lawyer to understand the very real risk in this day and age of attracting a law suit for professional negligence? Most lawyers charge by the hour, so why wouldn't one take the time to get it right?
Last edited by Rojer Wilco; 10th Jan 2010 at 11:02.
Roger, you may be correct under industrial law, but overlook requirements peculiar to civil aviation and the functions and obligations of a commercial pilot engaged in air charter or RPT operations.
1. An AOC holder is required to insure liabilities in accordance with the Civil Aviation (Carrier's Liability) Act;
2. A "contract" pilot may not practice his trade in an independent manner, but must operate in accordance with each operators accepted Operations Manual.
3. CAR and CAO requirements at least for air charter and RPT require greater than a casual relationship between an operator and pilot.
It may be possible to engage a casual contract pilot for aircraft ferry, private or aerial work operations. I do not believe it possible to engage a casual contract pilot to conduct air charter or RPT operations.
1. An AOC holder is required to insure liabilities in accordance with the Civil Aviation (Carrier's Liability) Act;
2. A "contract" pilot may not practice his trade in an independent manner, but must operate in accordance with each operators accepted Operations Manual.
3. CAR and CAO requirements at least for air charter and RPT require greater than a casual relationship between an operator and pilot.
It may be possible to engage a casual contract pilot for aircraft ferry, private or aerial work operations. I do not believe it possible to engage a casual contract pilot to conduct air charter or RPT operations.
I would suggest you get a quote for the insurance premium for the aircraft and workers comp for yourself, you may find after paying these, and your living expenses it will be costing you money to work.
Don't even think of not having insurance, if you ding a prop and end up having the engine stripped the bill will make your eyes water. Have a chat to a nice friendly engineer and get an idea of some of the bills they send out, especially if a recovery is involved, think two engineers plus pilot in a twin flying from Cairns (you pay travelling time as well), workshop labour and parts.
Also if you are injured on the job, consider the cost of a medivac alone, before you even get to hospital. Last time I was in Australia, Medicare didn't pay for work place injuries.
IF you are desperate enough to sign this, make sure you get professional advice first as to what's legal and enforcable. Possibly you could sign in the knowledge that it would be laughed out of court (pay your own workers comp though). Join a union before you start, I'd have the TWU on my side just in case.
Don't even think of not having insurance, if you ding a prop and end up having the engine stripped the bill will make your eyes water. Have a chat to a nice friendly engineer and get an idea of some of the bills they send out, especially if a recovery is involved, think two engineers plus pilot in a twin flying from Cairns (you pay travelling time as well), workshop labour and parts.
Also if you are injured on the job, consider the cost of a medivac alone, before you even get to hospital. Last time I was in Australia, Medicare didn't pay for work place injuries.
IF you are desperate enough to sign this, make sure you get professional advice first as to what's legal and enforcable. Possibly you could sign in the knowledge that it would be laughed out of court (pay your own workers comp though). Join a union before you start, I'd have the TWU on my side just in case.
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The Interview
Courtesy of Airline Pilot Central.
I walked into the interview with a great deal of confidence and enthusiasm. Flying airplanes was my one true passion in this life. This was my big chance to merge my occupation with my love. I would become an airline pilot.
"So you want to be an airline pilot?" the interviewer inquired.
"Yes, sir, more than anything else I have ever wanted," I replied, realizing I sounded like an anxious adolescent.
"Well, great, welcome aboard," the airline executive said.
"You mean I'm hired?!" I cheered.
"You bet, we're glad to have you. Actually, we've had trouble finding good pilots to hire," the exec explained. If I was surprised, it was overshadowed by my joy of reaching my dream.
"Let's just go over a few points before you sign on the dotted line," the company man chortled. "We're going to send you to the world's most renowned medical center. They'll spend two days probing your body orifices, draining and analyzing your blood, and administering psychological exams. They'll literally take you apart and put you back together. If they find any hint of current or future problems, you're fired and can find your own ride home."
"Gee, I think my health is OK," I nervously choked out.
The manager went on, "Good, next we'll evaluate your flying skills in an aircraft you've never been in before. "If we don't like the way you perform, you're fired,"
I was confident with my flying, but this guy was making me nervous.
He continued, "Next, if you're still here, we'll run you through our training program. If during any time in the next 10 years you decide to leave the company, you'll have to reimburse us $20,000, or we'll sue you. Also if you fail to measure up during training, you're fired."
The man who had just given me my dream job listed still more hurdles. "Each time, before we allow you near one of our multimillion dollar aircraft we'll X-ray your flight bag and luggage, because we don't trust you. Also we'll ask you to pass through a magnetometer each time. If you fail to do so, you'll be arrested and jailed."
"When you've completed your flight, we'll have you provide a urine sample, because we don't trust you to not take drugs. Very soon, we plan to take a blood sample to look for more drugs. "Also if you ever fly with another crew member who may have used drugs or alcohol, you must report to us immediately. If you fail to notice that anyone has used these substances, you'll be fired, have your license to fly revoked, and be fined $10,000."
"Every six months, we want you to go back to the medical center for another exam. If they ever find a hint of a problem, your license to fly will be revoked and we'll fire you. Anytime you see a medical person, you must tell us about it so we can see if you need to be grounded and terminated. Also, we need to examine your driving record, and you must tell us if you have even any minor infractions so we can remove you from the cockpit as soon as possible."
"At any time, without notice, a special branch of the government will send one of its inspectors to ride in your aircraft. The inspector will demand to see your papers and license; if your papers are not in order, you'll be removed, fined, terminated, and possibly jailed."
"If at any time you make an error in judgment or an honest human mistake, you will be terminated, be fined tens of thousands of dollars, and be dragged through months of court proceedings. The government will make sure you never fly again for any airline."
"You will be well out of town most holidays, weekends, and family events - half our pilots are always on the job at any point in time.
Smiling an evil smile now, the airline hirer went on. "Oh, and one last thing to cover. Occasionally, we in management fail to see a trend and screw up royally or the country's economy falls flat on its face. If as a result of one of those events the corporation begins to lose money, you as an employee will be expected to make up the losses from your paycheck. Of course, management will not be held to the same standards.
Oh, and one last thing - if we negotiate pay and work rule concessions from you in the in exchange for a better pension plan, we probably won't fund that pension plan agreement (unlike the management pension plan and golden parachutes) and will likely have yanked it away from you."
"Now sign here," he pointed, grinning as he handed me a pen.
I faked a sudden nosebleed. Holding my head back and pinching my nostrils, I hurried from his office. When I got to the hall, I began to run. I ran all the way to my car. I figured if I hurried I could still get to the county vocational school before 5:00 and enroll in the industrial welding career program. !!
Courtesy of Airline Pilot Central.
I walked into the interview with a great deal of confidence and enthusiasm. Flying airplanes was my one true passion in this life. This was my big chance to merge my occupation with my love. I would become an airline pilot.
"So you want to be an airline pilot?" the interviewer inquired.
"Yes, sir, more than anything else I have ever wanted," I replied, realizing I sounded like an anxious adolescent.
"Well, great, welcome aboard," the airline executive said.
"You mean I'm hired?!" I cheered.
"You bet, we're glad to have you. Actually, we've had trouble finding good pilots to hire," the exec explained. If I was surprised, it was overshadowed by my joy of reaching my dream.
"Let's just go over a few points before you sign on the dotted line," the company man chortled. "We're going to send you to the world's most renowned medical center. They'll spend two days probing your body orifices, draining and analyzing your blood, and administering psychological exams. They'll literally take you apart and put you back together. If they find any hint of current or future problems, you're fired and can find your own ride home."
"Gee, I think my health is OK," I nervously choked out.
The manager went on, "Good, next we'll evaluate your flying skills in an aircraft you've never been in before. "If we don't like the way you perform, you're fired,"
I was confident with my flying, but this guy was making me nervous.
He continued, "Next, if you're still here, we'll run you through our training program. If during any time in the next 10 years you decide to leave the company, you'll have to reimburse us $20,000, or we'll sue you. Also if you fail to measure up during training, you're fired."
The man who had just given me my dream job listed still more hurdles. "Each time, before we allow you near one of our multimillion dollar aircraft we'll X-ray your flight bag and luggage, because we don't trust you. Also we'll ask you to pass through a magnetometer each time. If you fail to do so, you'll be arrested and jailed."
"When you've completed your flight, we'll have you provide a urine sample, because we don't trust you to not take drugs. Very soon, we plan to take a blood sample to look for more drugs. "Also if you ever fly with another crew member who may have used drugs or alcohol, you must report to us immediately. If you fail to notice that anyone has used these substances, you'll be fired, have your license to fly revoked, and be fined $10,000."
"Every six months, we want you to go back to the medical center for another exam. If they ever find a hint of a problem, your license to fly will be revoked and we'll fire you. Anytime you see a medical person, you must tell us about it so we can see if you need to be grounded and terminated. Also, we need to examine your driving record, and you must tell us if you have even any minor infractions so we can remove you from the cockpit as soon as possible."
"At any time, without notice, a special branch of the government will send one of its inspectors to ride in your aircraft. The inspector will demand to see your papers and license; if your papers are not in order, you'll be removed, fined, terminated, and possibly jailed."
"If at any time you make an error in judgment or an honest human mistake, you will be terminated, be fined tens of thousands of dollars, and be dragged through months of court proceedings. The government will make sure you never fly again for any airline."
"You will be well out of town most holidays, weekends, and family events - half our pilots are always on the job at any point in time.
Smiling an evil smile now, the airline hirer went on. "Oh, and one last thing to cover. Occasionally, we in management fail to see a trend and screw up royally or the country's economy falls flat on its face. If as a result of one of those events the corporation begins to lose money, you as an employee will be expected to make up the losses from your paycheck. Of course, management will not be held to the same standards.
Oh, and one last thing - if we negotiate pay and work rule concessions from you in the in exchange for a better pension plan, we probably won't fund that pension plan agreement (unlike the management pension plan and golden parachutes) and will likely have yanked it away from you."
"Now sign here," he pointed, grinning as he handed me a pen.
I faked a sudden nosebleed. Holding my head back and pinching my nostrils, I hurried from his office. When I got to the hall, I began to run. I ran all the way to my car. I figured if I hurried I could still get to the county vocational school before 5:00 and enroll in the industrial welding career program. !!
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Roger, you may be correct under industrial law, but overlook requirements peculiar to civil aviation and the functions and obligations of a commercial pilot engaged in air charter or RPT operations.
I'd advise you as follows;
1. An AOC holder is required to insure liabilities in accordance with the Civil Aviation (Carrier's Liability) Act;
2. A "contract" pilot may not practice his trade in an independent manner, but must operate in accordance with each operators accepted Operations Manual.
It's normally the whole point of any such contract, and I don't understand how your point is relevant in determining either the validity of the contract, nor whether the pilot is an emplyee or a contractor.
3. CAR and CAO requirements at least for air charter and RPT require greater than a casual relationship between an operator and pilot.
Anyway, your point is immaterial to any legal argument about whether the pilot is a contractor or an employee because we're merely discussing how often he provides the service, rather than the instrument of that provision.
It may be possible to engage a casual contract pilot for aircraft ferry, private or aerial work operations. I do not believe it possible to engage a casual contract pilot to conduct air charter or RPT operations.
--------------
As a piece of final advice; Even if the contract was effected by any of your points above, it wouldn't automatically make the pilot an employee, and it wouldn't necessarily relieve either party from any or all of their contracted obligations.
Last edited by Rojer Wilco; 11th Jan 2010 at 03:49.
Roger Wilco,
Clearly you have a very good grip on this matter. Would you agree though that a contractor is leaving him or her self more open to financial claim by an aircraft operator should they damage the aircraft whilst it is under their control, as Metro Man outlined in his post above?
Clearly you have a very good grip on this matter. Would you agree though that a contractor is leaving him or her self more open to financial claim by an aircraft operator should they damage the aircraft whilst it is under their control, as Metro Man outlined in his post above?
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Quote:YPTJ
Clearly you have a very good grip on this matter. Would you agree though that a contractor is leaving him or her self more open to financial claim by an aircraft operator should they damage the aircraft whilst it is under their control, as Metro Man outlined in his post above?
Clearly you have a very good grip on this matter. Would you agree though that a contractor is leaving him or her self more open to financial claim by an aircraft operator should they damage the aircraft whilst it is under their control, as Metro Man outlined in his post above?
The Contract Pilot would be prudent to limit his personal liability by forming a proprietary limited company for the purposes of offering the contracted services (which would also be advantageous for taxation minimisation).
The Principal in turn would be wise to make the contract conditional on The Contractor holding public liability insurance, workers compensation and some sort of professional indemnity insurance that covers The Contractor in the event that The Principal wishes to sue for damages (say to remedy an aircraft owned by The Principal and damaged by The Contractor through negligence).
The clever amongst you should have also noticed a possible illegal ops problem here.
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Only if you don't have an AOC.
Would professional indemnity insurance be of any benefit? I would have thought that hull and public liability (including carriers) insurance would provide appropriate protection as anything that damages the aircraft will be the a result of a f*** up or bad luck. IMHO professional indemnity insurance would only become essential if you were the CP, had a T&C function or performed/certified maintenance whilst being an independent contractor given that you would be providing professional opinions to other people at times.
Actually on second thoughts performing a daily inspection where someone else flies the aircraft could leave you open for a professional indemnity claim as you sign that the aircraft is serviceable for the day (professional advice). If the wings fall off whilst another pilot is flying the plane then the pilot, principal and/or pax could sue you for incorrectly certifying that the aircraft is airworthy.
Would professional indemnity insurance be of any benefit? I would have thought that hull and public liability (including carriers) insurance would provide appropriate protection as anything that damages the aircraft will be the a result of a f*** up or bad luck. IMHO professional indemnity insurance would only become essential if you were the CP, had a T&C function or performed/certified maintenance whilst being an independent contractor given that you would be providing professional opinions to other people at times.
Actually on second thoughts performing a daily inspection where someone else flies the aircraft could leave you open for a professional indemnity claim as you sign that the aircraft is serviceable for the day (professional advice). If the wings fall off whilst another pilot is flying the plane then the pilot, principal and/or pax could sue you for incorrectly certifying that the aircraft is airworthy.
Simply outstanding.....
Best laugh I've had in ages...but probably so true somewhere.....thank you!!!Join Date: Apr 2009
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Werbil,
You may well be correct about the insurance. Aviation insurance isn't an area in which I have a great deal of experience.
I suggested PI because if The Contractor dings it, he needs to be insured to sufficiently cover a claim arising from The Principal (or some other plaintiff) that the damage was caused or contributed to by a poor operational decision, error or an omission made in the course of The Contractor's service delivery. PI will cover that.
If some other form of insurance is available that covers damage to an aircraft The Contractor doesn't own but is using in the course of his business, then that would probably be more suitable. Not sure if hull insurance covers that sort of thing, but there may be some insurance product out there that does.
Does public liability cover it? Maybe, but you'd have to check the terms and conditions carefully. Often public liability claims may only be actioned to cover injury or damage to third parties, ie an entity that has suffered loss or damage, but is not a party to a contract or transaction (say, a member of the public - hence it's name).
You may well be correct about the insurance. Aviation insurance isn't an area in which I have a great deal of experience.
I suggested PI because if The Contractor dings it, he needs to be insured to sufficiently cover a claim arising from The Principal (or some other plaintiff) that the damage was caused or contributed to by a poor operational decision, error or an omission made in the course of The Contractor's service delivery. PI will cover that.
If some other form of insurance is available that covers damage to an aircraft The Contractor doesn't own but is using in the course of his business, then that would probably be more suitable. Not sure if hull insurance covers that sort of thing, but there may be some insurance product out there that does.
Does public liability cover it? Maybe, but you'd have to check the terms and conditions carefully. Often public liability claims may only be actioned to cover injury or damage to third parties, ie an entity that has suffered loss or damage, but is not a party to a contract or transaction (say, a member of the public - hence it's name).
