Beijing Shunyi District Court ruled on Wednesday that Guo Yuebing, a pilot with Xinhua Airlines, could terminate his labor contract without paying compensation to the airline.

Before yesterday's ruling in favor of Mr. Guo, pilots had usually been obliged to hefty compensation to airlines on resignation.

Having worked with Xinhua Airlines for six years, Mr. Guo submitted his resignation last January. He asked the court to order the company to return his personal documents, and pay 1.05 million yuan compensation to cover unpaid wages, loss of benefits, and other sundry items.

Mr. Guo said that during his period of service in the company, he was often asked to work overtime and his requests for leave were often rejected.

Xinhua denied Guo's allegations, citing company regulations.

Xinhua claimed that it had invested heavily in Mr. Guo's training and said his resignation would inflict heavy economic losses on the company. They asked the court to award them compensation of more than 5 million yuan.

Last April the local labor arbitration committee ruled that Guo could terminate his contract, but no agreement on compensation was reached. Later, both sides decided to appeal to the courts.

After investigating the case, Shunyi District Court ruled that Mr. Guo was entitled to resign without paying compensation under the provisions of China's Labor Law.

The ruling awarded Mr. Guo 7,800 yuan in back pay and overtime compensation, but rejected his claims for seniority and bonus payments.

Analysts say basic pilot training costs over 2 million yuan and resignations are an increasing headache for airlines. In the present economic climate, airlines have difficulty recruiting pilots and many vacancies remain unfilled.