The End of Training Bonds in Canada? Let's Hope...

anyways · Post by **anyways** » Fri May 05, 2006 7:04 pm

ABC XYZ:

one thing your forgetting though is that nobody is forcing you to sign these bonds. all are voluntary. yes if you dont sign you dont get the job but NOBODY IS FORCING YOU TO TAKE THE JOB.

I realize you may be playing devil's advocate here, but this is the kind of attitude that sets pilots back in terms of work conditions and employer expectations.

You say that no one forces you to sign a training bond, and that is true if you mean that no one forces the pen into your hand. Let's not forget that when someone signs a training bond, they have already sacrificed significant sums of money and time on training, moving, and various other opportunity costs. So, after investing so much in terms of resources just getting to the point of 'training bond contention' (and given the alternate choice of having little chance at career advancement while living below the poverty line), pilots are unquestionably forced to sign on the dotted line.

trey kule · Post by **trey kule** » Fri May 05, 2006 7:08 pm

Doc.

Wish it were true. Saying it slowly is not going to make a difference.

And I have not had a problem with it personally, but I have seem enough resumes from pilots that just got a PPC a month presviously looking for work.

so let me repeat it to you slowly, as that seems to be your preference.
It is a two way street. There must be balance. And until there is I dont expect much to change....dont read into what I am saying more than what I am saying.

Dust Devil · Post by **Dust Devil** » Fri May 05, 2006 7:28 pm

This should be good for the PPC selling buisness.

Where'd who go? · Post by **Where'd who go?** » Fri May 05, 2006 8:19 pm

Pachanga · Post by **Pachanga** » Fri May 05, 2006 9:02 pm

Where'd who go? wrote:Wouldn't need training bonds if the majority of "young" Pilots had any concept of what it means to be a human being.

Wouldn't have "young" pilots having issues with what it means to be a human being if it wasn't for $hit entry-level jobs, working the ramp for years, cleaning airplanes and the bosses car, and getting paid poverty money for slavery work!

Where'd who go? · Post by **Where'd who go?** » Fri May 05, 2006 10:29 pm

Pachanga · Post by **Pachanga** » Fri May 05, 2006 10:53 pm

Where'd who go? wrote:Pachanga, I won't comment on the state of your mental health.

Let's just say that you appear to be a "sucka".

WWG?

Better than being an a$$hole who fits the description of everything you stated in your original post. It amuses me how tough one can become with their keyboard when unfortunately they receive back some of what they have been dishing out to others.

cyyz · Post by **cyyz** » Fri May 05, 2006 11:10 pm

Dust Devil wrote:This should be good for the PPC selling buisness.

That's my theory...

Like I said, and funny that no one commented on 17,18,19,20, ALPA made a good point in regards to other transportation industries who have "better" hours of work(we do CARS they do labour code)...

I think that should be looked at seriously, I don't know if we want TC, the labour board, or what have you "fixing it," but it should be looked at...

And yes I'm trying to get everyone to shut up on the "training issue" which we will beat to death, but it would be good if we move on and collaborate on 17-20, "hours of work" as mentioned in the release.

abc xyz · Post by **abc xyz** » Sat May 06, 2006 5:23 am

Hy Anyways,

without a doubt there is a lot of pressure on a lesser expereienced pilot to try to get their career moving. But saying you are essentailly forced into anything that may be placed before you is complete nonsense.

Your theory is like breaking minimums because the boss would yell at you for going to your alternate. We're pilots - we are paid for our decision making skills, sometimes saying no is tough but its the right answer.

if the terms are bearable for you - sign up enjoy safe flying. ie loan for training is in your name and if you leave before x period of time you cover the balance. cut and dry no mystery

if you know your getting hooped to help bankroll an operation without realistically seeing any progress in career. you have nobody to blame but yourself.

Doc · Post by **Doc** » Sat May 06, 2006 5:39 am

Think I'll lease a Navajo, and start selling PPC's! That way, it'll still come out of the poor dumb pilot's pockets, but the companies will not look like "evil doers"! Then companies will pay me a %age, and save training costs..yah!

Wilbur · Post by **Wilbur** » Sat May 06, 2006 7:51 am

Lets not forget that the employers also have their own associations to represent their interests. If pilot mobility and training costs are big issues, what is stopping the employers groups from jointly establishing standards for themselves. For example, as a condition of membership your company will not hire anyone from another company within 24 months of them recieving a type rating, PPC, upgrade, or whatever.

On the other hand, if some form of bond is deemed warranted or necessary, that money should be held in trust. Creditors should never have access to it in the event of a bankruptcy, and the company should have to prove their entitlement to compensation from those funds if a pilot leaves before fulfilling his employment contract.

flaps40 · Post by **flaps40** » Sat May 06, 2006 9:36 am

Hey whatever happened to the good old days? Days off? Oh ya that was a day that you showed up for work at 4am, hung arround the shop until 1500 and then had the trip scrubbed, BUT you didn't go flying so there's your day off. So why would we be after normalized hours? As for training bonds, this should be no different than a carpenter showing up for work. If he has a hammer and a tape meassure he's equipped to work. If a pilot has the rattings the opperator requires then he is equipped. Extra training should be at opperators expense.

Cat Driver · Post by **Cat Driver** » Sat May 06, 2006 10:26 am

"Extra training should be at opperators expense. "

But what about the pilots who receive the training and then jump to another company at the first opportunity?

Is that just another part of owning an OC?

Cat

cyyz · Post by **cyyz** » Sat May 06, 2006 10:39 am

Wilbur wrote:Lets not forget that the employers also have their own associations to represent their interests. If pilot mobility and training costs are big issues, what is stopping the employers groups from jointly establishing standards for themselves. For example, as a condition of membership your company will not hire anyone from another company within 24 months of them recieving a type rating, PPC, upgrade, or whatever.

These guys can't even get together to raise the prices because one of their peers will undercut the rest....

Hey whatever happened to the good old days? Days off? Oh ya that was a day that you showed up for work at 4am, hung arround the shop until 1500 and then had the trip scrubbed, BUT you didn't go flying so there's your day off. So why would we be after normalized hours?

Exactly, and that stuff needs to be addressed....

Pitts99 · Post by **Pitts99** » Sat May 06, 2006 12:36 pm

This document points really well the problems that face pilots in Canada, especially “Training Bonds”.
As some people rose in this topic, the companies want to protect themselves to avoid losing new pilots that cost a lot of money to train. That’s understandable, but where is the line?
There is different way used by the companies to protect them;
1-No protection at all; a pilot can leave at any time without any obligation. (could cost a lot of money to company)
2-A clause in the union contract saying that pilot must pay back the training cost at pro rata of the time remaining of his obligation. (in this situation, it’s the company that must try to get his money from the pilot)
3-A contract between the company and the pilot, saying the same thing that in 2.
4-A Training Bond where the pilot contracts a mortgage to put money upfront to cover the training cost. The company does the mortgage’s payment as long as the pilot works for the company.
5-A Training Bond like in 4, but where it’s the pilot that pays mortgage, and the cie pay back the pilot at the end of the bond.
6-Pilot simply pays the training, without any pay back. (fortunately that kind of deal almost doesn’t exist)

Now the question is, what is acceptable, and what isn’t acceptable? And how long should last that kind of contract or bond, 6 months, 1 year, … 4 years??

From my point of view, as long as there is no Bond, no money put upfront, that’s acceptable, and the maximum time of a contract should be 1 year.

So the proposal in 16 should be more precise, should be different concerning the duration and should talk about “Contract” instead of a “Training Bond”. And what is “direct cost incurred by the employer”; for a PPC, is it based on fuel, cost of instructor, cost of flight test, or is it based on the rate that the employers ask to his customers? That makes a huge difference.

anyways · Post by **anyways** » Sat May 06, 2006 3:06 pm

XYZ -

I see your point, and I realize there are a thousand shades of gray to the issue of training bonds. The fact remains that is a system with very little in terms of limitations, so when supply and demand for pilots favours employers (which it inevitably does in Canada) pilots are more likely to become victims of unfair terms. I know things are pretty comfy from the seat you're in now, but try and put yourself in the shoes of a kid with 1000 hours in a C172 and no hope of moving up without signing a bond.

Your theory is like breaking minimums because the boss would yell at you for going to your alternate. We're pilots - we are paid for our decision making skills, sometimes saying no is tough but its the right answer.

It's not fair to say that a pilot who signs a bond under unfavourable circumstances has poor decision making abilities and is more likely to break minimums. Since when did someone's safety depend on how much money you forked over to secure your position with a company?

snaproll20 · Post by **snaproll20** » Sat May 06, 2006 3:08 pm

The training bond issue will not likely go away easily. There is right on both sides.
The duty day time could be more easily fixed. And should be.
TCCA gives out the 15 hour long duty day Ops Specs with very little restrictions to operators who will happily extend pilot duty days to the point of chronic fatigue. This is happening more and more, even with previously "respectable" operators.

Then we have accidents. ...Duh!!!! IF TCCA is sincere about bringing down the Air Taxi statistics, this is one problem they need to tackle.

abc xyz · Post by **abc xyz** » Sat May 06, 2006 4:00 pm

Hi Anyways

my minimums remark was simply used as a reference to suggest that pilots need to be accountable for their own decisions. Its your licence nobody else's.

If you constantly feel like a cornered animal you will make rash decisions that my not be the most beneficial in the long run. Some employers know this - they play the game. Aviation is what it is, a very dirty business.

Being a newer pilot in this day and age is very cut throat - everybody is looking for that edge. The only thing I can really suggest is do your best to network and promote yourself at every turn. If you have a buddy who works at a good company get him to get your resume on the top of the pile. Everybody wants that next step to come yesterday. In time new opportunities will present themselves, just dont assume you need to jump at the 1st thing that comes your way.

Safe flying

ei ei owe · Post by **ei ei owe** » Sat May 06, 2006 5:10 pm

Bonds wouldn't be so bad if there was a way to insure them if a company should go under. The operator has every right to put out bonds but should be forced to pay out any balances upon going under.

Doc, that's a business you could get in..... bond insurance for companies running dodgy operations. Forget the PPC biz, it's saturated.

goldeneagle · Post by **goldeneagle** » Sat May 06, 2006 6:39 pm

ei ei owe wrote:Bonds wouldn't be so bad if there was a way to insure them if a company should go under. The operator has every right to put out bonds but should be forced to pay out any balances upon going under.

Doc, that's a business you could get in..... bond insurance for companies running dodgy operations. Forget the PPC biz, it's saturated.

This is exactly the reason the topic gets so confusing for most. A real bond is provided by an insurance company, and is a form of insurance. There would be a flat fee up front for the bond, it's done this way all the time for performance bonds in other industries, ie a company is 'bonded' when they put up a peformance bond on a construction project.

In aviation the concept has been twisted a bit, but the initial twist wasn't so bad. A company wanted to protect an investment, and, asked a pilot to sign a pro-rated promissory note for the training value. The promissory note is usually worded such that it's forgiven after a period, and includes an offer of employment for the period. If the employment offer is withdrawn (either thru termination or ceased operations) the note is forgiven. At the end of the term it's forgiven. There is no up front expense for the pilot, expense only occurrs if they break the term. It's an arrangement that puts some legal and financial teeth into a gentlemans agreement to stay the term.

The concept got completely twisted when companies started a completely new financial arrangement, namely 'pilot financed training', but still tried to call it a 'bond'. It wasn't a bond, it was a simple financial loan transaction where the pilot loaned the company money for the training expenses. In some cases, it was a pretty large loan, and the company actually co-signed bankloans for folks to get the cash. The cash was then delivered to the company in the form of a loan. When the company shut down, well, pilots can get in line with all the rest of the creditors, and try recover the loans. How they ever got away with calling it a 'bond' is beyond me, and how folks could sign those documents without understanding the ramifications is also beyond me.

A bond properly written puts absolutely no financial duress on a pilot, it just puts some teeth into the agreement to stay for a given term, and those teeth only kick in if the terms are broken. It wont affect a credit rating, and it wont require any cash outlay unless the departure comes before the end of the term. Pilot financed training, well, that's another story. It has a direct affect on credit, and it can leave one stuck holding a very large outstanding balance. Especially with a startup, its an arrangement that should only be entered into if one has the financial resources to lose the entire sum.

If you are going to be looking at terms of a training bond, there's a few simple telltale signs to look for. If the agreement requires the pilot to fork up cash to do the flying involved for training, one needs to ask a simple question. 'If this company cant afford to do the training on a particular airplane, can they afford to operate it ?'. If there is no cash outlay on the part of the pilot, and it's all on the part of the company, but there is a term involved, the question to ask is this. 'Did this company become successful because they have learned to identify and hedge market risks?'. That question is easily answered by looking at the terms of the agreement, if they are reasonable, then there's a huge clue there.

Look around the industry, those who require the pro-rated prommisory note style of bond arrangement are for the most part all still operating, and, dont show the telltale signs of companies struggling to stay afloat. Look carefully at the wording on thier agreements, if they do go under, no pilot will be left with a large debt to pay. Those that required up front payment from pilots, well, most of the well known ones are no longer operating, and a few of them did leave pilots with large debts. Therein lies a pretty big clue.

This isn't rocket science folks, it's basic finances, and I'm just amazed at how many folks have no clue when it comes to finance. Personally, if a pilot cant tell the difference between a 'bond' and an 'up front payment', I'd question if they have the judgement required to sit up front of a big jet to begin with. At the same time, if a reasonable term, and a reasonable dollar amount are presented in the form of a promissory note, and they guy doesn't want to sign it, would you take his/here word they will stick around for the term? If they really plan to stick out the term, the pro-rated promissory note carries no risk.

anyways · Post by **anyways** » Sat May 06, 2006 6:49 pm

XYZ

Definately sage advice. And I don't mean to come accross as someone who is ungreatful - I feel extremely lucky to be where I am (with no money exchanging hands in the process - just a promisary note). I can't help being sensetive about the bond issue because I have seen it abused, and as ALPA pointed out, it's set to pray on the weaker elements of the pilot population (and hey, we were all there once). Like ALPA, we should all have the interests of the underdog in mind - let's face it, we get more by looking out for eachother. You can still be a 'company man/woman' while embracing this principle.

Cheers..

xsbank · Post by **xsbank** » Sat May 06, 2006 7:00 pm

Nicely written, Golden eagle. Essentially what I've been saying in every other thread on this subject: There is nothing wrong with being asked to stay for a certain period of time to earn enough revenue for the company to pay for your training costs. If you leave early, you pay; if you live up to your word and stay the course, no pay. There are two guys who left us to return to the airlines and they are paying off their bonds by contracting, filling in when they are not doing their normal job. And just to set the record straight, they are paid at their full contract rate, the ONLY thing that is deducted is the time they owe. Fair? Everyone is happy, and the guys get to supplement their (meagre) airline salaries.

W0X0F · Post by **W0X0F** » Sun May 07, 2006 8:27 am

Goldeneagle hits the nail on the head!

Many of the comments on this thread are valid.

There are pilots among us who have acted dishonourably. A person given an opportunity by an employer does owe the employer a reasonable degree of loyalty. Clearly there have been "ladder climbers" that have besmirched us and contributed to the implementation of "pilot financed training".

There are also shoddy employers that implemented "pilot financed training" as a means of financing their company.

The problem is that "pilot financed training" has become so widespread in this industry that to just say, "No!" as abc xyz would have us do is a very limited option. I myself would have forfeited a promotion had I not signed. It angered me that I was cornered into such a position and I argued against it as much as I could at some detriment to myself. Yet in the end I reasoned that it was the lesser bitter pill to swallow and so I too am partially responsible for perpetuating the "pilot financed training" issue.

Goldeneagle correctly differenciated bonds versus "pilot financed training". Even ALPA places the words "training bond" in quotations as an acknowledgement that it is a misnomer.

As in many cases, dishonourable actions by some (on both employer and employee side) have lead to a counter-mechanism, in our case, "pilot financed training". That a major (sorry for using the term) carrier, ie. Jetsgo implemented "pilot financed training" just made it mainstream. And as with most point and counterpoint issues, the pendulum swings too far.

It is my sincere wish that with it's involvement, ALPA does mangage to reverse the path we have been on.

Unfortunately, it is human nature to move towards the lowest common denominator. Some pilots and employers have lower standards and have dragged a sizable portion of our industry into this "pilot financed training" mess. To counter this, we may get more regulation. Just what we need. A fine choice of poisons.

Lastly, a tip of the hat to all those employer that have not implemented "pilot financed training", and to all pilots that have acted honourably and have resisted the move towards "pilot financed training". Play nice and there is no need for stupid rules.

With regards...

Post by **avcanada** » Sun May 07, 2006 10:17 am

Looks like CUPE also put in a letter which addressed several labour concerns..

Was an interesting read http://www.fls-ntf.gc.ca/en/sub_fb_75.asp

The deadline for the submission of comments on the questions and issues raised in the consultation paper as well as on any other matter that is within the Review's mandate was October 31, 2005. However, if you wish to send a written submission to the Review, please contact us by phone (1-866-660-0344) or e-mail (info@fls-ntf.gc.ca).

CD · Post by CD » Sun May 07, 2006 10:19 am

Labour Code