Training Cost Recovery - "Claw Back"
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Training Cost Recovery - "Claw Back"
Hi all,
I'm interested in peoples opinions about the increasing use of 'claw back' clauses in contracts.
It is commonplace in several industries to provide training to new recruits and on the basis of leaving the company early attempt to recover some or all of that training cost. This prevents people from getting cheap training and immediately moving on to another employer.
I've seen some aviation employee contracts recently that contain clauses enabling a company to use 'claw back' provisions. However, the following clause in the Air Pilots Award (MA000046) appears to prohibit this.
16.2 Where the employer requires a pilot to reach and maintain minimum qualifications for a particular aircraft type in accordance with this award, all facilities and other costs associated with attaining and maintaining those qualifications will be the responsibility of the employer.
Paragraph 16.5 makes similar undertakings in relation to meeting entry criteria and training periods.
So, is this another rampant rip off by some operators, albeit on the surface illegal? Have you been the victim of this rort? Comments please.
I'm interested in peoples opinions about the increasing use of 'claw back' clauses in contracts.
It is commonplace in several industries to provide training to new recruits and on the basis of leaving the company early attempt to recover some or all of that training cost. This prevents people from getting cheap training and immediately moving on to another employer.
I've seen some aviation employee contracts recently that contain clauses enabling a company to use 'claw back' provisions. However, the following clause in the Air Pilots Award (MA000046) appears to prohibit this.
16.2 Where the employer requires a pilot to reach and maintain minimum qualifications for a particular aircraft type in accordance with this award, all facilities and other costs associated with attaining and maintaining those qualifications will be the responsibility of the employer.
Paragraph 16.5 makes similar undertakings in relation to meeting entry criteria and training periods.
So, is this another rampant rip off by some operators, albeit on the surface illegal? Have you been the victim of this rort? Comments please.
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I always try and take a middle ground on these sorts of issues.
Sure you don't want an employer hitting an employee for large $ just because they left the organisation, BUT.. why should the employer foot the bill for the asset (in the form of the qualification you have gained at their expense) that is being taken from them (often to a competitor) before they have had a chance to get a return on their investment?
I'd say an employee who takes the training then leaves is just as much a rampant rip off as the other way around.
But then again, I live in a seemingly long gone world where self-interest isn't the only driving factor in people decision making!! (And yes, I'm talking both sides of the equation!!)
Sure you don't want an employer hitting an employee for large $ just because they left the organisation, BUT.. why should the employer foot the bill for the asset (in the form of the qualification you have gained at their expense) that is being taken from them (often to a competitor) before they have had a chance to get a return on their investment?
I'd say an employee who takes the training then leaves is just as much a rampant rip off as the other way around.
But then again, I live in a seemingly long gone world where self-interest isn't the only driving factor in people decision making!! (And yes, I'm talking both sides of the equation!!)
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Those contracts you mention, are they subject to the Air Pilots Award or do they fall outside its ambit by virtue of the salary offered being in excess of the stututory amount of some $115K?
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It is not at all uncommon to have bonded training so that the employer has some certainty that an employee intends to remain for an agreed period following what can be quite a large expense to the employer.
Generally bonds are sliding so that the bond reduces according to some agreed scale over the bonded period.
The employee doesn't have to agree to undertake bonded training. Indeed, I have some folk who have declined to do so, deciding that the additional pay, or whatever, doesn't warrant the bond. As an aside, a couple of such folk subsequently reversed their decisions a year or so later and did the next available training course with the bond. We can offer the carrot but the employee has to decide to nibble.
Most companies don't waste time setting up for bonds other than for significant training expenses .. ie, nickels and dimes training is gratis. Likewise, in my experience, most companies are reasonable in the case where the employee's departure is outside his/her reasonable control .. eg health or serious family issues.
The intent is to constrain the overt abuse of training by leaving shortly after. This doesn't stop the employee moving to a better employment opportunity but provides for a rather fairer balance between employer expenditure and employee freedom. It is relevant to note that many bonds do not cover anything like the total employer training cost.
The vexed question in the pilot fraternity of paying for training is in a slightly different paddock but, again, not at all uncommon in Industry.
Generally bonds are sliding so that the bond reduces according to some agreed scale over the bonded period.
The employee doesn't have to agree to undertake bonded training. Indeed, I have some folk who have declined to do so, deciding that the additional pay, or whatever, doesn't warrant the bond. As an aside, a couple of such folk subsequently reversed their decisions a year or so later and did the next available training course with the bond. We can offer the carrot but the employee has to decide to nibble.
Most companies don't waste time setting up for bonds other than for significant training expenses .. ie, nickels and dimes training is gratis. Likewise, in my experience, most companies are reasonable in the case where the employee's departure is outside his/her reasonable control .. eg health or serious family issues.
The intent is to constrain the overt abuse of training by leaving shortly after. This doesn't stop the employee moving to a better employment opportunity but provides for a rather fairer balance between employer expenditure and employee freedom. It is relevant to note that many bonds do not cover anything like the total employer training cost.
The vexed question in the pilot fraternity of paying for training is in a slightly different paddock but, again, not at all uncommon in Industry.
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If you don't like the bond, don't take the job.
Simple really.
If you do, then run shortly after without manning up to your obligations (unless it's family, health, etc etc) then you can jump.
We don't want it to go back to pay for your endorsement in the regionals and GA.
When I started out, REX were the only ones paying for training. You even had to pay Qantas 10K for the privilege of flying a Dash!
With the likes of V Australia seeming to be the entry point now for Virgin Australia and training covered with guaranteed domestic progression, hopefully soon the pay for your endorsement scheme will be obsolete in Australia.
Simple really.
If you do, then run shortly after without manning up to your obligations (unless it's family, health, etc etc) then you can jump.
We don't want it to go back to pay for your endorsement in the regionals and GA.
When I started out, REX were the only ones paying for training. You even had to pay Qantas 10K for the privilege of flying a Dash!
With the likes of V Australia seeming to be the entry point now for Virgin Australia and training covered with guaranteed domestic progression, hopefully soon the pay for your endorsement scheme will be obsolete in Australia.
Best one I ever saw was a PA31 endo conducted to allow an instructor to continue training while conducting charter on the other side of the country.
Phone call 2 days later: "What day will you be arriving in XXX so I can let the base manager know when he can commence his charter schedule?"
Reply: "Sorry, I've found another job in YYY on the way through. Ta Ta."
Phone call 2 days later: "What day will you be arriving in XXX so I can let the base manager know when he can commence his charter schedule?"
Reply: "Sorry, I've found another job in YYY on the way through. Ta Ta."
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When I started out, REX were the only ones paying for training.
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When I started out, all companies paid for training, not only that they paid you while you trained!
Last edited by knightflyer; 12th Sep 2011 at 05:41. Reason: quoting
LexAir
or do they fall outside its ambit by virtue of the salary offered being in excess of the stututory amount of some $115K?
The $115k concept is pretty sketchy and doesn't get a whole lot of coverage on the web.
I had one employer telling me that because I was being paid less than $115k then I MUST be covered by an award... but he could not show me a single award that aligned with my (management+flying) duties.
...he wouldn't accept the pilot award either, mostly because (I suspect) he didn't want to give me 6 weeks A/L etc etc etc/
Can you point me in the right direction for more info?
If you check your company operations manual you will probably find that it is the companies legal requirement to train the company pilots on any company aircraft they are required to operate.
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S.42(2) of the Fair Work Act 2009 states that a modern award does not apply to an employee if the employee "is a high income employee". Notwithstanding this, an employer and an employee may expressly agree to be bound by an applicable award.
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When I started out, all companies paid for training, not only that they paid you while you trained!
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[OverFienD] "I always try and take a middle ground on these sorts of issues."
so do I, it's just that the issue is now one of exploitation rather than respectable common sense.
[LexAir] "Those contracts you mention, are they subject to the Air Pilots Award .."
Yes, we're talkin' small business .. so small money.
[john_tullamarine] Just because that's what people are doing doesn't make it legal .. the issue is the clause in the Award which appears to prohibit 'claw-back'.
[The Green Goblin] "If you don't like the bond, don't take the job."
I'm not looking for a job. I am concerned for those newbies who do and end up living on a pittance for an extended - and usually undefined - period of time.
[MakeItHappenCaptain] ... bonza!
[Howard Hughes] ... bonza!
[A37535] ... bonza!
For those interested, the award system is essentially a heirachical system.
For Pilots (generally) the following documents apply.
National Employment Standards (NES) - Fair Work Act 2009
The NES is what it's name implies, and applies to every employer and employee irrespective of industry. It sets a benchmark and conditions.
Miscellaneous Award 2010 (MA000104)
This award also applies to everyone and provides the mimimum conditions of employment, including minimum wage, lunch breaks etc.
Clauses in this award apply when no related clause exists in an industry specific award.
Newbie pilots are often paid at the basic rate of $18.06/hr as specified in the Level 3 classification - "... An employee at this level has a trade qualification or equivalent and is carrying out duties requiring such qualifications .."
Air Pilots Award 2010
Specifically pilots -
4.1 This award covers employers throughout Australia of air pilots and those employees.
Note that there are more awards (more speficic, mostly Airline related).
Finding what condition applies generally works from a least specific (top) to most specific (bottom) of the list. All awards/info can be found here Find an award | Fair Work Australia
so do I, it's just that the issue is now one of exploitation rather than respectable common sense.
[LexAir] "Those contracts you mention, are they subject to the Air Pilots Award .."
Yes, we're talkin' small business .. so small money.
[john_tullamarine] Just because that's what people are doing doesn't make it legal .. the issue is the clause in the Award which appears to prohibit 'claw-back'.
[The Green Goblin] "If you don't like the bond, don't take the job."
I'm not looking for a job. I am concerned for those newbies who do and end up living on a pittance for an extended - and usually undefined - period of time.
[MakeItHappenCaptain] ... bonza!
[Howard Hughes] ... bonza!
[A37535] ... bonza!
For those interested, the award system is essentially a heirachical system.
For Pilots (generally) the following documents apply.
National Employment Standards (NES) - Fair Work Act 2009
The NES is what it's name implies, and applies to every employer and employee irrespective of industry. It sets a benchmark and conditions.
Miscellaneous Award 2010 (MA000104)
This award also applies to everyone and provides the mimimum conditions of employment, including minimum wage, lunch breaks etc.
Clauses in this award apply when no related clause exists in an industry specific award.
Newbie pilots are often paid at the basic rate of $18.06/hr as specified in the Level 3 classification - "... An employee at this level has a trade qualification or equivalent and is carrying out duties requiring such qualifications .."
Air Pilots Award 2010
Specifically pilots -
4.1 This award covers employers throughout Australia of air pilots and those employees.
Note that there are more awards (more speficic, mostly Airline related).
Finding what condition applies generally works from a least specific (top) to most specific (bottom) of the list. All awards/info can be found here Find an award | Fair Work Australia
