Canada: Bond: Training Bond

Last Updated: February 16 2016
Article by Darryl Pankratz

New employees are often subject to probationary periods during which their suitability for employment is evaluated. Probationary periods are defined periods of time (which are often for three months but can be longer) that are established at the beginning of employment. One purpose of probationary periods is to give the employer a reasonable opportunity to determine if the employee is qualified and suitable for the job. They will often provide an employer the ability to terminate the employee without cause and without the normal obligations of providing notice or severance. If a probationary period is longer than three months, the normal notice and severance provisions of the Employment Standards Act apply.

New pilots are often hired subject to probationary periods, and airlines and other operators may incur significant costs related to aircraft type certificate training of new pilots before they can fully assess them for permanent employment. As such, many employers choose to have new pilots sign a "Training Bond Agreement", which requires the employee to repay the costs of the training in the event that he or she is terminated during the probationary period. The significant cost of training can thus be shifted onto the pilot, which can impose financial hardship in the event that they are not kept on by the airline or operator.

In the recent British Columbia Supreme Court decision of Langford v Carson Air, the Court considered the enforceability of a Training Bond.  Ms. Langford was hired by Carson Air as a First Officer in August 2012. She signed a Training Bond that estimated the cost of training at $25,000 (the "Bond"). The Bond provided that she would repay the full amount owing to Carson Air if she resigned or her employment was terminated. During her six-month probationary period, Ms. Langford was terminated. She brought an action against Carson Air seeking damages for, among other things, wrongful dismissal, and Carson Air counter-claimed seeking re-payment of the cost of training.

The Court confirmed that the termination of a probationary employee during his or her probationary period can be based on a decision that the employee is unsuitable for the job.  Such a conclusion must be reasonable and properly motivated, reached only after the employee has been given a fair opportunity to demonstrate his or her suitability.

Carson Air successfully argued against Ms. Langford's claims of wrongful dismissal and outlined a number of reasons for which it terminated her employment. For example: she did not have a proper license when she was sent for training in Texas because she had not completed a medical examination; she brought her dog into the office without permission; and she flew illegally without proper licensing for a period of 6 weeks, which put the company into an issue with Transport Canada.  Here, Carson Air was entitled to assume Ms. Langford held a valid pilot's license when she applied for employment as a First Officer.

With respect to the Bond, the outstanding balance of Ms. Langford's training was $23,408.64. She argued that the Court should not give effect to the Bond because she was jet-lagged and did not feel comfortable when she signed it. She was asked to sign the Bond along with other new pilot recruits. She suggested that her signature on the Bond was not voluntary (that she signed under duress) because she was pressured to sign it in those circumstances. However, the Bond contained a term whereby Ms. Langford agreed she had been given the opportunity to seek advice about its terms. She did not attempt to contact or talk with anybody about her concerns. Accordingly, she failed to establish the elements for the defence of duress, and the Court allowed the counter-claim, ordering her to repay the amount of $23,408.64.

The Langford case is significant in that the Court ordered Ms. Langford to repay a significant amount of money to her former employer even though she was terminated near the end of her probationary period. Carson Air successfully demonstrated that it had proper reasons to terminate Ms. Langford's employment and that the termination was not motivated by an improper purpose. Accordingly, the case confirms that Training Bonds may be enforceable where an employee is properly terminated during a probationary period, and where the Training Bond properly advises the employee that he or she can seek advice about its contents.

In the aviation industry, employers who wish to use probationary periods and Training Bonds, and employees who are asked to sign these documents are encouraged to consider the following questions:

  • Do the new employees understand that their employment is subject to a fixed probationary period, during which time their skills and suitability will be evaluated?
  • How will performance and suitability be evaluated? Have formal evaluation processes been implemented and carried out during the probationary period? Do they include opportunities to provide the employee with feedback and provide him or her with the opportunity to modify behaviour?
  • What are the estimated training costs? If you are an employee, does this amount seem reasonable, would you have the means to pay it back, and over what period of time?
  • Does the Training Bond contain a clause where the employee acknowledges that he or she has the opportunity to seek advice? As an employee, have you exercised your right to seek that advice?

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Darryl Pankratz
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions