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Pilot Resignation Faces Awesome Compensation
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A pilot from China Eastern is recently engaged in a gnawing labor dispute after he handed in his resignation. His employer claims for a stunning 12.57 million yuan compensation for his quit.


Zheng Zhihong, the pilot, once served in the Air Force, and was enrolled as a civil pilot in 1995. Years of efforts turned him into a captain and veteran instructor.


On May 17, 2007, Zheng Zhihong handed in his resignation to Yunnan Branch of China Eastern, asking to discontinue his flexible-term labor contract. But after one month’s wait, he didn’t get the nod. On June 17, he took legal recourse by appealing to local labor arbitration authority.


In response to his suing, the airlines countersued Zheng, asking Zheng to continue to fulfill the labor contract. Otherwise they would claim for damage incurred by his leave, including his training cost and other sundry expenses.


The labor arbitration agency held a hearing on the morning of August 14 to mediate between the two sides, but no positive result was yielded due to their great divergence. The case will be finally ruled upon on August 24.


Industry insiders believe that the case reflects a serious shortage of pilots faced by China's airlines in case of the rapid development of civil aviation industry in recent years.


China has only some 10,000 pilots serving in China’s civil airlines, flying more than 800 planes. It is estimated that China needs 2300 more jet planes in next 20 years as China will be the second largest aviation market in the world. That means the industry will require at least 6,500 more civil pilots in next six to seven years.  


To help ease the increasingly acute shortage, the government has given green lights for airlines to recruit pilots from abroad. However, the introduction of overseas pilots is occurring on a scale too small to meet the growing demand.  


In 2004, the General Administration of Civil Aviation (CAAC) began to issue national flying licenses, instead of former regional ones, hoping to encourage the recruitment of pilots. However, it also enables pilots to work across the country. Previously, a pilot would only be given a local certificate that allows him to work in a certain region. Thereafter, job-hopping among pilots has increased significantly.


In China, it usually costs some 500,000 to 700,000 yuan to train a qualified pilot while the sum is usually covered by the employer airlines. From a pilot to an experienced captain, it needs ten years around long.


In March 2005, China’s first private airlines, Okay Airways, started its maiden flight, breaking the government monopoly in civil aviation sector. Thereafter, a dozen other private airlines have entered the market, luring pilots from state-owned airlines.


Private airlines have to compete to offer better salaries and benefits to hunt pilots from their rivals. The competition has led to the problem of “job-hopping.” To stop the drainage of pilots, state-run airlines often claim large compensation when pilots quit.


To prevent "vicious competition" among the airlines, the General Administration of Civil Aviation of China (CAAC), China's civil-aviation regulator, has established limits for job-hopping charges ranging from 700,000 to 2.1 million yuan.  


Published news shows that so far the number of pilots who have successfully quit and left to other airlines is only less than 50, while another 100 pilots who have submitted their resignations are still been trapped in labor arbitration or lawsuits.


Some optimistic view says that the acute shortage of pilots would be eased in five years as China has embarked on a large-scale pilot-training program.


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In June 2004, 14 former pilots working for state-owned China Xinhua Airlines handed in their resignations and left for the Okay Airlines, a private one. The compensation for the job-hopping was settled down after long negotiation between the two airlines. 


On July 12, two captains from the Jiangsu Branch of China Eastern Airlines (state-owned) submitted their resignations. Local court ruled that the two pilots pay one million yuan respectively to the airline for their quit.


On November, 2004, one pilot resigned from the Hainan Airlines and then left for a private airline, United Eagle Airlines. The new employer paid one million yuan compensation to the former one.


On April, 2005, one pilot from the state-owned Xiamen Airlines handed in his resignation letter demanding a compensation of 1.35 million yuan for flying overtime and other accusations. The airlines then filed a countercharge and claimed a compensation of 3.23 million yuan. Finally, labor-arbitration authority ruled the pilot’s resignation invalid and demanded him to pay 1.2 million yuan to the Airlines.  


On November 17, 2006, the headquarters of China Eastern Airlines signed an agreement with the Eastern Star Airlines, a private airlines. The latter paid 2.1 million yuan each for 22 former pilots from the former. Adding settling-in allowance, Eastern Star paid some 3 million yuan for each of these pilot. 


When 13 pilots from the Wuhan Company of China Eastern Airlines handed in their resignations they faced a compensation of 105 million yuan claimed by the airlines. On August 13, the local labor-arbitration agency ruled that the 13 pilots should pay a total sum of 9.29 million yuan to their former employer.


(China.org.cn by Wang Zhiyong and He Shan)



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