Aussie teachers not paid, left homeless in Japan

THOUSANDS of Australians in Japan face the prospect of no jobs and no accommodation amid growing fears the country’s largest English conversation school is on the brink of collapse.

Nova, the bulk of whose 5000-strong foreign workforce is Australian, might go bankrupt as early as November, Tokyo-based business consultant Ken Worsley said.
The company’s Australian head office, in Brisbane, has stopped recruiting and warned those already offered positions against going to Japan.

“We strongly suggest all applicants delay their departure until the situation in Japan becomes clearer,” Nova Brisbane spokesman Simon Thomas said.

Nova, already reeling from a $US45 million ($50 million) loss between April and June, is experiencing a disastrous cash-flow situation, with a flood of students cancelling lesson packages and demanding refunds.

The company’s public image in Japan was shattered in June when it was slapped with a government penalty for false advertising.

Late salary payments and lack of communication from top Nova management have rankled its mostly foreign staff.

A 31-year-old Brisbane woman who works in Nova middle management in Osaka said teachers and students had no confidence in the company.

“Basically, middle management is not being provided with any information as to why we’re being paid late,” she said.

She said 300 eviction notices had been served to teachers living in Nova-sponsored apartments, with the company deducting rents from their salaries but not passing them on to landlords.

Despite the company’s woes, Nova’s Osaka office this week approved eight Sydney instructors for positions in Japan.

However, Mr Thomas said about 30 prospective recruits from Australia and New Zealand had been warned against accepting positions.

“We did have some people who arrived in Japan last month and they were all told we thought it was in their best interests not to go, and if they were to go they should take extra funds and be prepared for the worst,” he said.

“There are still some people, who, despite our very strong warnings, have still decided to go as scheduled in October.”

Louis Carlet, of Japan’s National Union of General Workers, said Nova employees faced a six-month wait to recover lost wages if the company went bankrupt.

Nova’s teacher salaries, which range from about $33,000 a year, are paid monthly in retrospect.

Australian-based staff are among those yet to be paid this month’s salary.

A Department of Foreign Affairs spokesman said the effect of Nova’s financial difficulties on Australians was “a private legal matter for the parties involved.

However, consular officials could help those affected contact relatives, friends and lawyers in Japan, he said.

Nova claims a 46 per cent share of Japan’s lucrative English conversation school market but has posted multi-million dollar losses for the last three years.

http://www.news.com.au/couriermail/story/0,23739,22508420-953,00.html

Fight For Your Rights

NUGW [Tokyo Nambu] boasts about 65 workplace branches, and it has 200 more members at companies without on-site branches. Approximately 20 percent of its 2,600 members are foreigners, and 80 percent of those are teachers; another 10 percent work for newspapers. NUGW [Tokyo Nambu], whose foreign members are mostly from Western countries, is one of the Tokyo area?s few general unions with a large non-Japanese representation. Others, such as Zentoitsu Workers Union and Kanagawa City Union, have significant Central Asian, African and Brazilian members. Both unions put a priority on such issues as workplace safety and help with visas.

?If there?s a union branch, members can choose demands and submit them to management,? Carlet says. ?We can help individuals, but it?s much more difficult. We can collective-bargain, but management sees one person as [simply causing] a problem. Often we tell them to come back with one or two of their coworkers.?

http://metropolis.co.jp/tokyo/705/feature.asp

Nova teachers demand unpaid wages

The labor union of scandal-tainted language school operator Nova Corp. filed a request with labor standards supervision authorities Thursday to order the company to pay wages in arrears to its foreign teachers, union officials said.

The industry giant, already embroiled in a scandal related to its fraudulent advertising practices, has failed to pay September wages, which were supposed to be delivered on the 15th, to its foreign teachers, except for those in urban areas such as Tokyo and Osaka, the officials said. Some 5,000 foreign teachers are registered with Nova nationwide.

Officials of Nova’s General Union also said the monthly salaries of its 2,000 Japanese employees were paid late nationwide in July and August.

Katsuji Yamahara, chairman of Nova’s general union, which includes foreign teachers, criticized Nova for failing to explain the reasons for the delayed salaries, calling the repeated practice “malicious.”

Yamahara told a news conference that Nova may have incurred about ¥10 billion in losses, pointing out that it failed to return tuition fees as scheduled to students who canceled their contracts.

He said the union will ask the Ministry of Economy, Trade and Industry ? which regulates Nova and other English-language school operators ? in October to extend assistance to the company so it can avoid bankruptcy.

An Australian citizen teaching for Nova said that because the company is still looking for teachers, he is worried foreigners may apply for jobs without knowing about the delayed paychecks.

The Osaka-based company has been seeing a drop in enrollment and a rise in cancellations since the Ministry of Economy, Trade and Industry ordered it to partially suspend operations in mid-June for deceiving consumers about its services in its advertisements.

On Sept. 20, it was reported that Nova is planning to close at least 200 of its roughly 900 school branches later this month in an effort to revamp its operations. Immediately after the news, the labor union demanded that the company proceed with caution to avoid any adverse effects on teachers and students as a result of the closures.

http://search.japantimes.co.jp/cgi-bin/nn20070928a7.html

Aussie teachers ask Nova to show them the money

A COMPANY that employs thousands of Australians in Japan is still recruiting English teachers in Sydney despite failing to pay its staff for more than 12 days.

Japanese language company Nova, which claims to have up to 5000 Australian employees, has yet to explain the delay in payments. Australian teachers say they fear eviction from their homes and some are refusing to work until they are paid.

The company?s Brisbane office said this morning some teachers had been paid, but trainers were yet to receive their money. They refused to comment on the reason for the delay.

Nova was plunged into financial crisis in mid-June, when the Japanese Ministry of Economy, Trade and Industry ordered the company to suspend part of its business for six months for lying to consumers about its services when soliciting students. In the wake of the scandal many students cancelled their enrolment and Nova was forced to provide generous refunds.

In Osaka this week, 50 foreign workers, including Australians, took to the streets in protest, demanding their pay and calling for the resignation of the company CEO Nozomu Sahashi. Many trainers stopped working in protest until their salary is paid.

Nova failed to pay its foreign workers on September 14. Six days later, the Sydney office held a live web chat recruiting more staff, encouraging potential teachers to apply for the 2008 recruitment program, but making no mention of the salary problems.

Nova told one candidate: “We will send a package of employment and visa documents to be completed to start the process of getting you to Japan!”

Similar chats were also held in Boston and San Francisco as recently as Monday 24th September, 10 days after it failed to pay staff on time.

Nova currently operates 900 schools in Japan, but sources say they plan to cut up to 200 schools, making hundreds of Australian staff redundant.

According to blog posts, teachers in Nova-managed accommodation have received eviction warnings over unpaid rent despite the fact the company was deducting rent money from employees? salaries.

The company?s financial problems have dominated expatriate web forums in Japan with many worried the company is about to go bankrupt.

“Still no pay for TIs. That’s 12 days late now and it doesn’t look like they’ll be paid today either … Looks like they really are going under,” wrote contributor ?leathers? on the Japan Today forum.

“I don’t plan to work for free,” a 33-year-old Australian said.

“I’m sorry for the inconveniences caused to the students,” he said. “It’s too bad, because we want to keep the students at Nova. But the stress teachers are under, I think, is affecting the lesson quality.”

http://www.news.com.au/heraldsun/story/0,21985,22491114-662,00.html

Ailing NOVA under pressure to pay teachers’ delayed wages

A labor union will ask a governmental labor inspection office to demand troubled English school NOVA pay its teachers their delayed wages.

NOVA started to delay paying wages to its Japanese staff members in late July, and has been late paying its foreign teachers since Sept. 14, General Union officials said.

[Tokyo Nambu’s sister union] the General Union in Osaka will formally ask the Osaka Chuo Labor Standard Inspection Office on Thursday to demand NOVA pay delayed salaries.

The union recently sent a letter to the president of NOVA and asked him to promptly pay staff wages. The letter demanded a reply by Sept. 26, but the company told the union to wait until Oct. 5 for an answer.

http://mdn.mainichi-msn.co.jp/national/news/20070927p2a00m0na002000c.html

Ex-Nova students sue for refunds

Four people who canceled their English-language lesson contracts with Nova Corp. filed a lawsuit against the language school with the Kyoto District Court on Wednesday, demanding refunds totaling about 2.45 million yen in tuition for unattended classes.

Ten other former Nova students also filed a lawsuit with the court on the same day, demanding that the school refund about 4.1 million yen.

The case marks the first time the firm has been sued by a group of its former students.

According to the suit, the four plaintiffs, who attended Nova schools in Kyoto and other cities, were encouraged by the school’s employees to purchase additional points that would allow them to carry over previously earned points past their expiration dates.

Each of the students purchased 150 points at about 2,000 yen per point between January 2005 and September 2006.

However, when they asked Nova to cancel the contracts after August 2006, the school did not refund the money for the carried-over points.

The plaintiffs claim Nova is obligated to refund the fees for classes they did not attend, according to a law concerning special business dealings.

Meanwhile, the other 10 plaintiffs are demanding that Nova refund them 180,000 yen to 700,000 yen each in canceled class fees.

Although the contracts were cancelled, many of the plaintiffs have received no refunds, while the others have received less than they expected.

A Nova spokesman said: “It’s regrettable the cases were brought to court despite our sincere efforts. We’d like to handle the matter fairly after confirming the details of the suits.”

http://www.yomiuri.co.jp/dy/national/20070927TDY04003.htm

NOVA hit with group lawsuits over return of lesson fees

Fourteen people have filed two group lawsuits against major English-language school NOVA in the Kyoto District Court, demanding money they say the school has failed to return to them.

The plaintiffs are demanding a combined 6.58 million yen from NOVA. Some of the plaintiffs claim that the school inappropriately reduced the amount of money that should have been returned to them when they stopped taking lessons.

A group of lawyers representing the plaintiffs said that it was the first time group lawsuits had been filed against NOVA over cancelled contracts for its lessons.

The 14 plaintiffs are reportedly spread out over five prefectures in Japan.

http://mdn.mainichi-msn.co.jp/national/news/20070926p2a00m0na028000c.html

Is it all over for Nova?

As ‘eikaiwa’ giant plans school closures amid credit crunch, some fear the worst

The dark clouds that have been hanging heavily over us will be cast aside,” reads the English translation of Nova Corp. CEO Nozomu Sahashi’s memo faxed to staff Friday. “I said previously ‘the darkest time is before the dawn,’ and finally the first light of dawn can be seen.”

Nova is on the rocks, and the rosy forecast from the man at the helm of the Osaka-based “eikaiwa” behemoth may not be enough to reassure members of the 7,000-strong Nova crew ? including some 5,000 foreigners ? that the company isn’t sinking as Japan’s biggest conversation school chain plans to abandon at least 200 of its 900 branches, according to reports.

For the second month in a row, wages were paid late in September. Some teachers ? those in the Osaka and Tokyo areas ? were paid on time on the 14th; others received their wages on the 18th. Titled instructors are anxiously waiting to see if they get paid as promised on Tuesday 25th ? 11 days late. Teachers in Nova-managed accommodation have received eviction warnings over unpaid rent despite the fact the company has been deducting money for this purpose from employees’ salaries.

Nova’s labor-relations and legal woes over the past years have been well documented, but the biggest blow for the firm was the punishment meted out by the Japanese government to the firm for deceiving students about lesson availability: The Ministry of Economy, Trade and Industry (METI) slapped business restrictions on the corporation in June, banning the signup of new students on upfront ? and lucrative ? long-term contracts for a six-month period. The bad publicity generated by the decision has led to increasing numbers of students canceling contracts and demanding refunds from the cash-strapped firm.

“It’s kind of like a financial run on a bank,” said Louis Carlet, deputy secretary general of the National Union of General Workers Tokyo Nambu, which counts hundreds of Nova employees among its members. “That’s why this could be the biggest consumer wipeout in Japanese history, because the customers are depositing all this money as if in a bank, assuming the money will be there, and now . . . Nova students are getting worried that they’re gonna get wiped out, so they’re rushing to cancel the contracts and the more they rush the more Nova can’t pay their bills.”

However, Nova boss Sahashi is upbeat about the future. “I would like to inform you that the prospects look clearer for the refunds of cancellations that have accumulated until now and that a schedule has been established for refunding this money from the end of this month,” he wrote to staff Friday. “With this there will be no concern regarding salaries from next month onwards. I cannot announce further details at the moment but would like you to feel reassured and concentrate on business as usual.”

So what ? if anything ? does Nova have up its sleeve? Nova declined to comment over the phone for this story and e-mails to the corporation’s Tokyo and Osaka offices went unanswered.

The memo failed to impress Ken Worsley, Tokyo-based business consultant and editor of Japan Economy News.

“It is vague and contains no proof or evidence that something legitimate is on the way,” he wrote in an e-mail. “We should remember that in December 2005, a few weeks before eikaiwa operator NCB went bankrupt in January 2006, its management issued a similar notice, telling employees that they were about to receive a ‘capital injection’ from a large investor. It never happened, and on the day before January’s payday, NCB locked its doors forever and failed to pay staff or instructors. I see the same pattern evolving with Nova.”

The closure of some 200 schools, reportedly in the Tokyo area and Osaka, Hyogo and Aichi prefectures, should bring in a bundle of cash from savings on rent and the possible sale/rental of Nova-owned property. Is this the first stage in a process of consolidation that could save Nova from bankruptcy?

“I don’t think that Nova’s reported downsizing is a plan in the sense of being a well-thought-out business strategy so much as it is damage control,” Worsley said. “It has been suggested that they are being evicted from some locations, which would certainly indicate that cash flow problems run truly deep. On the other hand, if Nova has embarked upon a strategic downsizing without making an announcement to its employees and investors, one is forced to wonder to what extent the top management may be trusted.”

With Nova’s share price hovering around the ¥40 mark, down from around ¥100 in June (after hitting a high of ¥1,750 in 1999) and last quarter’s dismal financial report ? Nova posted a ¥4.5 billion operating loss over the April-June period (before the METI order), nearly four times the loss over the whole of the last financial year ? you might expect shareholders to be clamoring for the heads of top management. However, Nova’s top shareholders at least ? Nova Kikaku (the corporation’s holding company) and Sahashi himself ? appear to have faith in the current management. And despite the firm now going for a knock-down price, the fact that the same people who got Nova into this mess are still at the controls may put off potential buyers or partners.

“It would be a brave company that would take over a company in Nova’s situation without a change in management,” said Bob Tench, vice president of the Nova union. “The company has a large infrastructure, which in itself is a valuable asset; it has a lot of experience amongst its employees; and with the share price being so low it would be a good buy for a company ? provided they could insert a new top management to run things properly from now on.”

Travel agency H.I.S. was reported to have been talking with Nova about a tieup in July, and some reports have suggested the stumbling block was Nova management’s insistence on staying put. Sahashi, in an interview following the METI order, also ruled out joining forces with other eikaiwa firms. “I don’t want to tie up with a fellow trader,” he said.

With Nova running out of both money and options, talk is increasingly turning to the possibility of bankruptcy.

“I think that Nova’s chances of pulling through and surviving as a company are slim at best,” Worsley said days after the school closures were reported. “I have predicted before that the company would go under around the beginning of November, and I see no reason to change that statement at this point. Late payment is a huge red flag that a company simply does not have a strong enough cash flow to deal with its operating costs. Given that we have seen two late salary payments in a row, I take this as a sign that Nova is nearing insolvency.”

If Nova files for bankruptcy, one concern ? among many ? for employees would be getting hold of unpaid wages. If teachers have time left on their visas and procedures go smoothly, this wouldn’t be a major problem, according to Carlet.

The prospects for students hoping to get money back that they paid Nova upfront for lessons, however, are bleaker.

“The students are very unlikely . . . to get much of their money back, and in the past ? like with Lado ? other schools have been willing to take the students, sometimes for free or half-price,” Carlet said, referring to an eikaiwa chain that went bankrupt in May. “However Nova, being the Goliath it’s always been in the industry, is not in either of the two industry organizations.”

A nightmare even worse than bankruptcy for Nova staff and students would be if the corporation soldiered on after all hope was lost, said Carlet.

“If they don’t officially go bankrupt that means the teachers won’t be dismissed, they just won’t be paid, and if they resign they’d have to wait three months (for unemployment insurance), and if they don’t resign we have to prove that it’s effectively a bankruptcy, which takes time, so either way they’re in serious trouble if Nova doesn’t officially go bankrupt.”

It’s a scenario that is well within the realms of possibility considering how much is at stake for those at the top of the firm, said Worsley.

“The only incentives are fear and greed. Let’s not forget: Should Nova go down, its top management will be in serious personal financial difficulties and will be unhireable. For top management, it makes sense to keep the company running as long as possible in hopes that someone will buy it out. This happened with NCB and Lado, yet in the end no one bought them out.”

With so much uncertainty surrounding the firm’s future, many teachers are not sticking around to see if Nova can weather the storm. Berlitz alone received some 200 applications over a couple of days last week from Nova teachers seeking jobs, said a company source.

Roy Beaubien, who jumped ship after the late payment of wages this month, advises other Nova employees to do the same.

“I’ve seen a Japanese English conversation school try to avoid going bankrupt first hand before. It was hell. Only many years later did any teachers ? and only a few of them that stuck it out for years through many court hearings and after paying years of union fees ? finally get some of their money from the company through the court system.

“As for me? I was until very recently a Nova employee. I applied for my paid holidays immediately after our pay was 12 hours later than usual. I then handed in my resignation soon after that. I learned my lesson years ago and I vowed never to go through that again. This time I wanted to get out when I was still likely to get what I was owed.”

http://search.japantimes.co.jp/cgi-bin/fl20070925zg.html

Kiwis caught up in Japanese cash crisis

The jobs of hundreds of New Zealand teachers are under threat after financial concerns about one of Japan’s biggest English language schools.

The Nova group has not paid some of its staff and is planning to close some of its schools.

It is Japan’s biggest private English Language School and 3 News visited it only months ago.

Nova employs thousands of foreign staff, including about 500 New Zealanders.

Although staff in Osaka and Tokyo are being paid, staff in other centres say they are owed a month’s pay.

Student numbers are down and Nova is planning to close 200 of 900 schools throughout Japan.

A Nova staff member has emailed 3 News and says he is concerned that the company is still trying to hire more staff from New Zealand despite their downsizing.

The Ministry of Foreign Affairs and Education New Zealand agree that anyone considering working in an overseas language school should seek advice and thoroughly investigate the school before signing up.

http://www.tv3.co.nz/News/Story/tabid/209/articleID/35406/Default.aspx