The Economy, Trade and Industry Ministry said Wednesday it ordered Nova Corp., the nation’s largest English language school chain, to suspend for six months its recruitment of customers for new contracts of more than one year or 70 lesson hours, starting Thursday.
According to sources, the ministry has concluded Nova’s practice of telling prospective customers they can reserve classes at any time they choose, even though classes at certain times on some days are difficult to book, constitutes giving a “false account” of the company’s services and violates the Specified Commercial Transaction Law.
The Osaka-based company, which gained popularity with its “ekimae ryugaku” model of opening schools near stations, became the first English language school operator to receive a ministry order to suspend business operations.
In recent years, consumer affairs centers have been swamped with complaints of Nova’s practices with some claiming, for example, the company uses an accounting method disadvantageous to customers who cancel their contracts halfway through.
The ministry and the Tokyo metropolitan government launched an investigation into Nova in February, including inspecting the Osaka headquarters, its main Tokyo office and branches in Kanagawa Prefecture.
Under the ministry’s administrative sanction, Nova will be barred from carrying out a number of actions, including soliciting prospective customers for contracts of more than one year, for six months from today, the sources said. But those who already have signed such long-term contracts can continue attending classes. The sanction does not apply to short-term contracts, they added.
“We take the ministry’s decision seriously and offer sincere apology to the people concerned,” Nova President Nozomu Sahashi said at a press conference held in Osaka on Wednesday afternoon.
“We’ll do our best to take care of students and provide them with lessons without any problems,” he added.
Nova introduced a discount system in which students can take classes based on the number of points they purchased. The more points they buy at once, the bigger the discount. To take advantage of this system, many customers signed contracts with points valid for three years.
However, some customers reportedly ended up cancelling their contracts midway through, complaining it was difficult to make reservations and that they could not use up their points before they expired.
Industry sources said foreign language schools usually set contract periods of less than one year to avoid trouble over midterm cancellations.
As of September, Nova operated 926 branches and had about 450,000 students nationwide. Average sales per Nova branch reached 85.68 million yen in fiscal 2005, about 4.9 times higher than the average for its rivals.
News
Nova handed suspension order over tuition fee practices
The Ministry of Economy, Trade and Industry on Wednesday ordered major English-language school operator Nova Corp. to suspend part of its business operations for holding back money from students who cancelled their contracts, ministry officials said.
The ministry issued an order prohibiting Nova from soliciting customers or accepting applications for contracts exceeding one year or new contracts exceeding 70 hours. The suspension will be in place for six months.
It is the first time for the ministry to issue a business suspension order to an English language school under Japan’s special transaction law. People who are currently taking lessons at the language school will not be affected by the order.
Ministry officials explained Nova operates a system in which students buy points enabling them to take lessons. When they buy a large number of points in advance, they can take lessons at a cheaper price.
However, when people cancelled their contracts before finishing their courses, the company lowered the amount of lesson fees it returned to them. In addition the company didn’t inform people about the procedures for canceling contracts.
In April this year, the Supreme Court ruled that Nova’s policy of demanding penalties when students cancelled their contracts violated a law regulating commercial practices. It said the policy restricted students’ right to initiate the cancellation of their contracts, and ruled the practice invalid.
It has also emerged that the company prevented students from canceling their contracts under Japan’s “cooling off” law which states that people can cancel contracts without any obligation if they do so within eight days of forming the contract, by listing students’ contract day as the day they took tours of classes or received explanations about lessons.
Furthermore, when inviting students to take lessons, the company advertised that they could book lessons any time they wanted, but because of the difficulty in securing teachers, it remained difficult to make bookings. Because of this, the ministry reportedly decided to issue a business improvement order to the firm.
The Ministry of Economy, Trade and Industry and the Tokyo Metropolitan Government conducted an inspection of Nova in February in connection with the law regulating commercial practices. It found that several practices that violated the law had been ordered by the company’s general headquarters. The ministry said it judged the company’s practices to be “organized and malicious.”
Nova operates over 900 schools across Japan, and has about 480,000 students. Since 1996, the National Consumer Affairs Center of Japan has received over 7,000 complaints and inquiries about the company.
http://mdn.mainichi-msn.co.jp/national/news/20070613p2a00m0na015000c.html
Competing foreign-worker plans face off
Justice chief’s proposal to open doors, briefly, for all sectors causes stir
“Putting a three-year limit on a foreign worker’s stay in Japan does not give the company doing the hiring any incentive to take the time to train them for specialized work. Of course, there is also the question of how many skilled workers would want to come to Japan if they are forced to leave after three years,” [Hidenori] Sakanaka [director of the NGO Japan Immigration Policy Institute and former head of the Tokyo Immigration Bureau] said.
Court invalidates sacking of Japanese-Brazilian who called boss ‘idiot’
The Nagoya District Court on Wednesday invalidated a company’s sacking of a third-generation Japanese-Brazilian who called his boss an idiot, saying the company had abused its right of dismissal.Ruling in favor of the 35-year-old worker, the court said sacking the worker for calling his boss an idiot was unacceptable.
“The firing is not acceptable under current social standards, and it was an abuse of the right of dismissal,” Judge Toshiro Tamiya said as the ruling was handed down.
http://mdn.mainichi-msn.co.jp/national/news/20070509p2a00m0na022000c.html
Overtime or the cure — which is worse?
According to the Health, Labor and Welfare Ministry, the average full-time employee worked 2,041.2 hours in 2006, compared with 2,028 hours the previous year. Another government survey shows that one out of every four male employees in their 30s worked more than 60 hours a week in 2005. No job category breakdown was provided.
In 2003, a worker in the manufacturing sector in Japan worked on average 1,975 hours, compared with 1,525 hours in Germany and 1,538 hours in France. Closer to Japan, but still lower, was the United States at 1,929 and Britain at 1,888.
To deal with the high overtime rate, the government prepared a revision to the Labor Standards Law to increase pay for such work.
However, it also wrote another bill to exclude senior white-collar employees from overtime pay, the so-called white-collar exclusion. Management ranks are already excluded from overtime pay.
Strong public opposition to the exclusion forced the ruling bloc — the Liberal Democratic Party and New Komeito — to shelve the bill. But labor experts and unions fear it is only being held back so it won’t affect the bloc’s chances in the July House of Councilors election, and that after the poll they will submit it to the Diet.
“The issue will definitely come up again,” labor lawyer Ichiro Natsume said. “We must work harder to make the government give up the bill completely.”
Nova’s policy on cancellations illegal: top court
The Ministry of Economy Trace and Industry and the Tokyo Metropolitan Government inspected Nova’s Osaka head office and several schools in February for allegedly charging high contract cancellation fees and on suspicion that it had given the government false information about its cancellation policy.
At that time, the government warned Nova it could be forbidden from enrolling new students if officials found clear evidence of more legal violations.
At least eight lawsuits have been filed against Nova to get the company to pay refunds, and the rulings have all favored the plaintiffs, according to the plaintiff’s lawyer in Tuesday’s case.
In one of the cases, a woman argued that the information Nova provided about its cancellation policy was insufficient, claiming it was written in tiny characters in hard-to-understand language in the contract.
Top court rules Nova policy illegal / School must fully refund cancelers
The Supreme Court ruled Tuesday that major English school Nova Corp.’s method of settling early cancellations of its courses by using a higher unit price than when the contract was signed is illegal and violated the Specified Commercial Transaction Law.
The ruling followed a case brought by a 39-year-old man from Kita Ward, Tokyo, who tried to cancel a contract and demanded the company refund the 310,000 yen he said he was owed for classes he had not taken.
Presiding Justice Kohei Nasu ruled it is illegal to settle a contract by charging more for each unit taken than was agreed on when the contract was signed. He dismissed the appeal by Nova, and upheld and finalized the first and second rulings ordering the return of all the money demanded.
Top court: Nova’s refund tactic illegal
The Supreme Court on Tuesday rejected an appeal filed by Nova Corp., saying the refund system of the nation’s largest English conversation school is invalid and violates the specified commercial transaction law.
The decision finalized the rulings of two lower courts that ordered Nova to refund about 310,000 yen to a former student, the full amount he was seeking.
http://www.asahi.com/english/Herald-asahi/TKY200704040097.html
NOVA ordered to repay English tuition fees to man who cancelled contract
The top court on Tuesday dismissed an appeal by prominent English language school NOVA and ordered the group to return about 300,000 yen in prepaid tuition fees to a student who cancelled a contract.
NOVA’s tuition policy of selling classes on a point basis, with lessons becoming cheaper the more students buy, was at the center of the lawsuit.
The school had a policy of raising the price of lessons above the previously agreed fee should a student cancel a contract, thus reducing the amount it had to repay.
The Supreme Court ruled that NOVA should calculate the price of its classes on its initial rates.
The man, whose name is being withheld, paid 750,000 yen to NOVA in advance to buy points for 600 classes in 2001. The tuition fee per class was 1,200 yen.
He cancelled the contract in 2004 after finishing 386 classes. NOVA officials then said that the price of one class would come to 1,700 yen. The student claimed that NOVA should repay some 300,000 yen by calculating the price of the 386 classes at the rate set when he signed the contract.
The Supreme Court cited a law regulating commercial practices. The law provides that companies must not demand customers pay higher fees than previously agreed on if their clients cancel contracts midterm.
The National Consumer Affairs Center of Japan says it received some 7,600 complaints or inquiries about NOVA’s contract and cancellation policies from 1996 to March this year.
http://mdn.mainichi-msn.co.jp/national/news/20070403p2a00m0na018000c.html
Education boards hit for using contract staff as ALTs
Twenty-three municipal boards of education in Osaka Prefecture are suspected of using native English-speaking contract workers as assistant language teachers and placing them under the control of schools, a possible violation of the Temporary Staffing Services Law, an Osaka-based union announced Thursday.
The Osaka Labor Bureau has instructed six municipal boards of education, including those in Takatsuki, Sakai, Hirakata and Higashi-Osaka, to reconsider the practices, The Yomiuri Shimbun has learned.
A union spokesman said it was legal for the boards to use the contract workers as ALTs as long as they worked at the public schools under the direction of the staffing agencies. But he added that the boards of education had used the temporary workers like dispatch workers, who are under the direct control of schools.
According to the union comprising 550 Japanese and non-Japanese workers, which also provides consultation services for those workers, the 23 municipal boards said they received the contract workers from staffing agencies and let them work at public schools as ALTs, who are required to follow school curriculums and policies.
In January, the union sent questionnaires to all 43 municipal boards of education in the prefecture. Twenty-three said they had used contract workers sent from the agencies as ALTs, the union said.
A 27-year-old teacher who was dispatched to the Hashimoto Municipal Board of Education in Wakayama Prefecture by Zenken said he was given a general orientation about ALTs by the firm before he began working at public schools in the city, adding that he was usually instructed what to do in class by Japanese teachers.