Contract pay / bankruptcy
Thread Starter
Joined: Jun 2003
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From: near the beach
Contract pay / bankruptcy
Hi Everybody. I fly contract, as a Commander for one of the major pilot agency - 3 months summer contract. The airline I am flying for is not doing well - the classic trail of unpaid bills. Since I am employed by the contract agency to fly for the airline - where does that put me when they go shinny side up - thanks.
Joined: Nov 2003
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From: Canada
That puts you as an unsecured creditor - or in other words: you'll get nothing.
In some companies in other industries it's not unheadrd of for unsecured creditors (ie: workers) owed money to seize company assets as collateral if the company goes bankrupt. Could you consider doing this in the event of bankruptcy?
That's why when airlines go bankrupt, it's usually initiated by an airport somewhere impounding aircraft due to unpaid fuel bills. The airport operators are also unsecured creditors just doing what they have to do to get their money.
Of course, it would be difficult to determine exactly when to seize your collateral.
In some companies in other industries it's not unheadrd of for unsecured creditors (ie: workers) owed money to seize company assets as collateral if the company goes bankrupt. Could you consider doing this in the event of bankruptcy?
That's why when airlines go bankrupt, it's usually initiated by an airport somewhere impounding aircraft due to unpaid fuel bills. The airport operators are also unsecured creditors just doing what they have to do to get their money.
Of course, it would be difficult to determine exactly when to seize your collateral.
Joined: May 2008
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From: Scotland
Are you paid by the company you fly for or the agency that you are contracted to? Have a look at your contract and you will find it probably states that if they dont get paid you dont get paid. Some years ago I finished a contract being owed money - about $5000 - my lawyer told me to forget it as it would have cost more than that to get it.My philosophy now is no pay - no work.
Joined: May 2004
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From: UK
If you are employed by an agency then your contract is with them, not the airline.
If the airline goes out of business the agency will lose, you will not. The only problem comes if the airline owes so much money to the agency that it puts the agency out of business.
If the airline goes out of business the agency will lose, you will not. The only problem comes if the airline owes so much money to the agency that it puts the agency out of business.
Joined: Jan 2010
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From: EU
The good news is that you do not appear to work directly for the ailing airline. The bad news is that you have a contract with a "major pilot agency", who doubtless will have covered the possibility of not getting paid by the airline for your services in specific liability limitation clauses in your contract. The contract you signed with the "major pilot agency" will be the fountain of truth that will clear away all your doubts and probably leave you short changed, but if, by some miracle, it doesn't then phone the agency......
Joined: May 2004
Posts: 133
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From: UK
Don't know about pilot contracts, but I've never seen an engineer contract with a clause about not being paid if the client goes out of business. There's no way I or I suspect any other engineer, would sign up to that. Most agencies I work through supply both pilots and engineers, I would've gussed the terms were fairly similar about being paid.
My contract is with the agency, what they do about getting paid by an airline is none of my business (quite literally!)
My contract is with the agency, what they do about getting paid by an airline is none of my business (quite literally!)
Joined: Jul 2008
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From: 3433N 06912E
I finished a contract being owed money - about $5000 - my lawyer told me to forget it as it would have cost more than that to get it.My philosophy now is no pay - no work.
No Ticket, No Laundry!
Joined: May 2004
Posts: 133
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From: UK
"no pay - no work. "
Absolutely! If an agency fails to pay even ONCE, get out of there. Also make sure your invoices go in immediately they are due. If your working week finishes on a Sunday night, get your invoice in then, that way the agency has no excuses. And get the agency to accept an emailed PDF or Word invoice, no postal delays/excuses that way.
Absolutely! If an agency fails to pay even ONCE, get out of there. Also make sure your invoices go in immediately they are due. If your working week finishes on a Sunday night, get your invoice in then, that way the agency has no excuses. And get the agency to accept an emailed PDF or Word invoice, no postal delays/excuses that way.
Joined: Aug 2005
Posts: 516
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From: uk
I am a contact Captain at a well known Euro loco.
The day my pay does not turn up will be the day I go sick until I'm paid.
My contract has a clear disclaimer stating that if the agency gets knocked, I get knocked too.
There we go.....
The day my pay does not turn up will be the day I go sick until I'm paid.
My contract has a clear disclaimer stating that if the agency gets knocked, I get knocked too.
There we go.....
Joined: Apr 2002
Posts: 3,349
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From: FUBAR
Of all the agencies I have used over the years there are only two that I know of that demand cash up front from the airline, I.E they are paid 1mth in advance.
This way if they don't get paid they have at least 1 mths salary in the kitty and you are going to have your last months salary if it all goes tits up, obviously with no notice, unless you want to work unpaid for a month.
Both of these agencies have names beginning with P,
1 is in Ireland, the other in Switzerland.
AFAIK none of the others offer this "peace of mind", and I have been let down by 2 others who would no doubt call themselves "major pilot agency" Bla bla bla
This way if they don't get paid they have at least 1 mths salary in the kitty and you are going to have your last months salary if it all goes tits up, obviously with no notice, unless you want to work unpaid for a month.
Both of these agencies have names beginning with P,
1 is in Ireland, the other in Switzerland.
AFAIK none of the others offer this "peace of mind", and I have been let down by 2 others who would no doubt call themselves "major pilot agency" Bla bla bla
Thread Starter
Joined: Jun 2003
Posts: 274
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From: near the beach
Hi everybody and many thanks for all the replys. The agency I work are huge, maybe the biggest around - I hope that they are being paid in advance as one suggested. Pay last month was on time and paid to me via the agency direct. Thanks again - I will keep you posted when payday arrives.
Joined: May 2004
Posts: 133
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From: UK
DjerbaDevil, thanks for highlighting that clause, as chance would have it I've just had a new contract sent through this week and the bugger's have slipped in that very clause! Like many of us, I could go direct with an airline but choose not to because I want the agency to take the risk, that's why they take a percentage of my pay. If they're not taking the risk, what's the point in using them?
As a contractor, try and negotiate a weekly pay instead of monthly, at least your exposure will be limited. Good luck!
As a contractor, try and negotiate a weekly pay instead of monthly, at least your exposure will be limited. Good luck!
