Singapore Airlines (SIA) has successfully pursued a former first officer in a US court in a case to decide whether the carrier can legally enforce bonded contracts of employment on cockpit crew. The decision, which is viewed by many as setting a legal precedent, will cost the pilot $205,000 in bond repayments.
The suit is the first of several legal cases either pending or continuing against former SIA cockpit crew in Australian and European courts. In the case of the recent litigation in the USA, judgement was entered against the pilot and in favour of the airline.
According to airline sources, the cases are being watched with keen interest by foreign employees considering resigning early, but who face hefty contractual penalties on outstanding training bonds. Pilots are being drawn away by a mix of more-lucrative offers from other airlines and dissatisfaction with local terms and conditions.
The legal controversy focuses on the size of "liquidated damages" for which pilots and guarantors are liable. Expatriates joining with a commercial pilot's licence, with instrument rating, sign a S$320,000 ($200,000) bond, before undergoing 18 months of advance and line training as a second officer. For a serving first officer, the bond is progressively reduced over a seven-year period.
Pilots also face a recently revised S$24,000 bill for training on the company's Learjets, as well as a "subsequent bond" of up to S$70,000 when converting onto another type. Ex-employees contesting their contracts in court have claimed that the "actual cost" of line and conversion training is much lower.
SIA disputes this, arguing that it is a fair reflection of the training received, and adds that, in the case of local inductees entering at the ab initio level, the bond is less than the cost of the training.
Source: Flight International