Last night I was giving an aircraft checkout to another pilot. During our flight, we made a full stop at a nearby Class C airport. Our departure instructions were runway heading till 800', then turn on course to our non-towered airport about 15nm away, maintain 1,000'. The pilot flying was doing everything fine. We're still inside the inner ring (Surface - 4,000') and not quite yet in the outer ring of the Charlie airspace (1,200'-4,000') when the controller tells us to switch to 1200 frequency change approved. So I turn my head to the MFD and begin preparing it for our next task, also switching the MFD from the terrain avoidance page to the local chart page to use after we clear the Charlie airspace. The pilot switches the radios, but then climbs upto 1,500' which puts us in the outer ring now, I told the pilot to descend immediately, our instructions were to maintain 1,000'. He asks me if that was still valid even though we were given a frequency change? I told him, yes it still is a valid instruction.

Should I file a NASA form, call the tower and apologize or am I did I misunderstand our instructions and we were ok?