Mr. Zhang, a pilot in China, was requested by his former employer, the Airline Company (the “Company”) to pay about RMB 4.99 million as the “Flying Experience Fee” and RMB 1.96 million as the separation compensation after he resigned from the Company. The separation compensation was supported by the judge of Shanghai No.1 Intermediary People’s Court based on the Opinion on Regulating the Movement Management of Flight Personnel to Ensure the Stability of Flight Teams and the Circular of Relevant Issues on Implementing the Opinion on Regulating the Movement Management of Flight Personnel to Ensure the Stability of Flight Teams. The separation compensation should actually be borne by the pilot’s new employer according to the said regulations, and is different from the liquidated damages under PRC Labor Contract Law, which are applicable only when the employee violates his/her agreement on service periods after obtaining a professional training from the employer or when the employee violates his/her post-employment non-competition obligation. However, the Company’s claim for the “Flying Experience Fee” was overruled by the judge for the reason that Mr. Zhang’s increased working experience and improved capacity were a natural result of performing his obligations under the employment contract, and it was the Company’s obligation to provide working equipment and create working conditions, which should not be regarded as extra benefits for Mr. Zhang. Therefore, the judge held that there was no legal basis for the “Flying Experience Fee” under existing PRC laws and regulations.
China