IPA Pilots - Bond agreements update

Bond agreements update

April 2023 Blog

Some time ago, we wrote an article questioning whether bond agreements in the aviation industry were, what we termed at the time, a ‘necessary evil’.  It has been interesting to see how matters relating to bonds have evolved since the publication of that piece, to the extent that we are now revisiting it. 

In summary, that article did not in any way constitute legal advice, it neither condemned nor condoned the practice of bond agreements, and it was qualified in when a bond agreement may or may not be a valid contract between the employer and the employee. 

Subsequently, the subject of bonds, and specifically that blog has been raised several times.  Whilst we know that members like a clear-cut scenario, the reality is that when it comes to employment disputes, it is very rarely the case that we can say with certainty that one party will undoubtedly be successful.  That is because every case is nuanced.  On the face of it, two, or several cases may appear the same, but it is only when we explore the facts of a specific case that has been presented to us are we able to give an informed view. 

Since publishing the aforementioned blog, we have found ourselves in a situation where an employer sought to rely on our blog in order to enforce the terms of their own bond.  The position they were seemingly adopting was that a trade union says they are legitimate and valid so it can be enforced.  This was not what was said, and the employer chose to be selective in what they sought to rely upon, taking the comments out of context.  This practice demonstrates why we stress that a blog, or any other general article cannot constitute legal advice, and it was somewhat of a bizarre situation when an employer sought to suggest otherwise. 

This further blog is not legal advice, and in the same way as the previous blog, neither condemns nor condones bond agreements in the aviation sector.  Those final four words are significant, as case law has found a requirement to repay training bonds/costs in certain specific circumstances in certain other sectors to be unenforceable. 

What we find surprising is the number of enquiries regarding bonds and the assumption that a bond agreement cannot be valid in law and is thus unenforceable.  The starting point is that as the standard rules of contract apply, they can be valid and enforceable, in the same way that any contract in any sector or area of law can be valid and enforceable.  We are not saying that they are, so would discourage readers from relying on statements that are not legal advice.  Where the employer has set out detailed terms of the bond agreement and given the employee the opportunity to review and sign before the training takes place, there are likely to be less issues around enforceability, subject to the agreement not being punitive or in restraint of trade.  An employer has a right to protect its business interests, and this may include training costs. 

When exploring whether and in what circumstances training costs might be recoverable, there are several issues to consider:

  • Is the agreement within the contract of employment or a separate, specific document?
  • What is the jurisdiction for the working arrangement?
  • Do the terms of the training bond meet the threshold for enforceability that has generally been established through case law?
  • What type of training course does the agreement purport to cover?
  • What does the value of the bond represent? 
  • What circumstances trigger repayment on all or part of the bond?

Only once certain details have been established can a view be taken as to whether the bond agreement is likely to be deemed valid and enforceable. 

To any of our members who may be required to sign a bond agreement – please take legal advice from your union before signing. It may be the case that you are going to sign, irrespective of advice, but at least you will have had the benefit of knowing what potential liability you may have in the future.

To any of our members who have a bond agreement and are seeking other employment – please contact us before you hand your notice in.  We cannot unravel any situations created prior to our involvement, and members risk undermining their position in any discussions by not seeking appropriate advice. 

The Independent Pilots (Financial Services)

The Independent Pilots (Financial Services) Ltd was set up for the IPA and are specialist Chartered Financial Planners dedicated to providing the very best tailored advice for our members.

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