Nova employees and union officials lashed out at the language school chain’s move Friday to seek court protection from creditors, and called on the government to ensure its nearly 7,000 workers, many of whom have not been paid for months, receive their wages.
The announcement caught most employees by surprise, said Jamie Scarrabelotti, a Nova employee in Osaka’s Namba district.
“We showed up for work at 9 a.m. Friday morning, and it was business as normal. At 11 a.m., I heard from Nova’s foreign personnel office that the company was going to ask for government assistance, and that if they didn’t get it, they may have to declare bankruptcy,” Scarrabelotti said.
At a Friday afternoon news conference in Osaka, a spokesman from the General Union, which represents Japanese and foreign employees at English conversation schools, said they were petitioning the central government to take action and establish emergency measures to assist Nova teachers and staff.
“We can’t be very optimistic about Nova’s recovery. Just yesterday (Thursday), Nova said that unpaid salaries would be paid and that students would receive refunds by the end of the month. Now, they file for bankruptcy protection. We can’t trust what Nova officials say,” said Katsuji Yamahara, a union representative.
Toshiaki Higashibata, a lawyer representing Nova, told a separate news conference that unpaid salaries had reached ¥4 billion. However, Yamahara warned that the government needed to ensure Nova provides proper documentation of unpaid salaries in the weeks and months ahead.
“We’re worried that even if the company undergoes restructuring, the same problems related to unpaid salaries will not be solved. Nova should continue paying teachers and staff, even though the schools are now closed down,” Yamahara said.
The concern about receiving unpaid wages is especially strong among employees and union officials because Nozomu Sahashi, who was ousted as Nova president Thursday, has disappeared and it remains unclear as to who is in charge.
“Who are the real owners of Nova today? We don’t know,” Yamahara said.
The General Union also said it will soon formally approach the immigration bureau to request it extend the visas of Nova’s foreign teachers who wish to stay in Japan and find other work. The embassies of Australia, New Zealand, Canada and the United Kingdom will also be asked to offer whatever assistance they can, including financial help, it added.
The union also called upon the central government to provide information about Nova’s situation in English.
“Nova claims to be the largest employer in Japan of foreigners, and a lot them don’t speak Japanese. Unfortunately, there are few counselors at job agencies who speak English, and almost no bilingual information on the Internet. What’s needed are counselors with a foreign-language ability, as well as bilingual pamphlets and bilingual Internet home pages,” Yamahara said.
To deal with immediate Nova-related staff problems, there will be two union-sponsored events over the next few days. In Tokyo, the National Union of General Workers Tokyo Nambu will hold a hearing for teachers and administrative staff Sunday at 7 p.m. at its office. The General Union will hold three separate hearings Monday at the PLP Kaikan in central Osaka. Two of the hearings will be in English and one will be in Japanese.
Call (03) 3434-0669 for more information about the Tokyo hearings, and (06) 6352-9619 for those in Osaka.
Teachers angry and insecure over future
Thrown suddenly out of work, language teachers with Nova Corp. in Tokyo were quick to react to their employer’s move Friday to file for court protection from creditors.
“This was in the back of my mind,” Genevieve Latimer, who was visiting a government-run job center in Shinjuku Ward, said of Nova’s decision. “I haven’t even received my September paycheck,” the 32-year-old Australian said.
Job-hunting just minutes away from Nova’s Shinjuku school, where she taught for more than five years, Latimer said it was her Japanese boyfriend who happened to catch the news on TV and informed her of Nova’s action.
“Teachers are always the last ones to be told,” she said while waiting in line at Hello Work Shinjuku, where she had gone to search for leads to a job in a different industry.
Brent Stephen, a teacher at Nova’s Shinbashi school for more than a year, puzzled over the legal liability of Nozomu Sahashi, who was ousted Thursday as the language school’s president.
“I don’t understand why Sahashi will not go to jail for this. His decisions screwed thousands of people,” the 24-year-old from Seattle said on his way out of the job center.
Stephen claimed Nova had offered no explanation for holding up his September paycheck, worth about ¥250,000, and said he would have to rely on his savings for the time being.
He said he had enough savings to tide him over for 1 1/2 months, but wondered if that would be enough time for him to land a new job. “The job market is flooded with teachers who are leaving Nova,” he said.
According to staff at the job center, which set up a special window for Nova workers Friday, they had fielded some 50 Nova-related phone calls and received more than a dozen visitors throughout the morning.
Most were inquiring about their unpaid wages and job opportunities.
The center, run by the Employment Security Bureau of the Health, Labor and Welfare Ministry, said it will provide job counseling to non-Japanese teachers. However, some teachers fear Nova’s collapse has cost them more than their jobs.
A 36-year-old from Canada, who asked to remain anonymous, said he may be forced to leave his apartment because the rent had been deducted by the language school chain from his paychecks.
“I don’t know how that is going to turn out,” he said, adding he had received no word from Nova on his visa status or unpaid wages. “This is not a surprise, although I had a false sense of hope,” he said.
“The students are angry as well. They claim that Nova shouldn’t have expanded this fast, and I agree with them. This was more about greed rather than having a stable business,” he said.
Nova students give poor grades to management
Though forewarned of their language school’s financial woes, students Friday reacted to the news of Nova Corp.’s bankruptcy with shock and disappointment.
Some said they were satisfied with their lessons but unhappy and upset with management.
Ryotaro Oba, 47, of Setagaya Ward, Tokyo, a Nova student for more than a decade, learned of Nova’s financial collapse from the morning news. Oba was soon to transfer from the Gakugei Daigaku school on the Toyoko line to the Jiyugaoka school two stations away due to the school’s streamlining of branches.
His final class at the previous school on Oct. 20, however, was suddenly canceled the night before when Nova couldn’t get a teacher for him.
Instead, Oba had reserved a class for Saturday at the new school but was informed it would only be held if a teacher was available. Now, he doesn’t know when or even if there will be a next class.
“The school worked for me because I wanted to have an opportunity to speak English casually, and the classes weren’t so expensive,” said Oba, a public servant. “It’s really too bad that this happened, and I hope they can revive,” said Oba, who still has tickets for classes good until March.
A 32-year-old woman from Nerima Ward, Tokyo, who attended Nova’s Oizumi Gakugen school for about four years said she was also facing a transfer to another school near Nerima Station. She took her last class at the school Thursday, the day the school closed, but said no mention was made of the company’s pending bankruptcy.
The woman, who declined to be named, said she only found out about the bankruptcy when she showed up for class at her new school around noon Friday and found a notice posted on the door.
“I really liked the lessons there because the teachers were dedicated. Despite the problems of their payment delay, they came until the last class yesterday, and the farewell party was actually touching,” she said. “I have no complaints about the classes, but the management is really disappointing. I wish they had done something earlier before it went this bad.”
The woman said she had had bad experiences with management several times over the course of the four years she took classes. On a few occasions she tried to get refunds for her coupons but was told this was not possible according to the terms of her contract.
The company was always slow to respond to her questions concerning her contract, she said. “I felt they weren’t acting for the convenience of the students but for themselves.”
Yoshimasa Watanabe, a 61-year-old retiree who also attended the Oizumi Gakuen school and was preparing to transfer to Nerima, said he knew Nova wasn’t getting any revenue as it was losing students.
“A lot of our conversations these days ended on the issue of what’s going to happen to Nova,” said Watanabe, who took lessons three or four times a week.
Watanabe still has about 100 lesson coupons, but was unsure whether Nova would give him a refund.
“Actually, I was hoping against hope (that they wouldn’t go down,)” Watanabe said.
Maki Nobata, a Nova student and office worker in Tokyo, said she was considering asking Nova to refund her money since she wasn’t satisfied with the lessons there.
“Some teachers are good, but many others are quite young and their vocabulary is poor. I was just wondering what I went to the school for,” Nobata said.
She said the reports about the language school’s financial difficulties also made her consider asking for a refund.
“I bought lesson (coupons) worth about ¥500,000, and I still haven’t used one-third of them,” she said.
ESL teachers left in limbo in Japan
660 Canadians among 4,000 out of work as 900-school Nova Group chain goes bankrupt
An estimated 4,000 foreign teachers, including about 660 from Canada, are without jobs after Japan’s largest school chain, Nova Group, closed its 900 schools and declared bankruptcy yesterday.
Many teachers are owed $4,000 in salary for September and October, said Catherine Campbell, a Cape Breton native who has taught English at various schools during 13 years in Japan.
“For many people, their rent has not been paid either, if they live in Nova housing,” said Campbell, who now represents teachers in Japan’s National Union of General Workers.
“The company deducts rent from their salary.”
“I’ve heard at least a dozen reports of eviction notices, very short, only two days in some cases,” Campbell said in an interview. “In some cases, they’ve gone to live with friends. In other cases, they are staying in the apartment even with an eviction notice. They still have a visa, and can find work elsewhere. But that’s the big problem. There’s a shortage of other jobs out there.”
Star calls to Nova Group’s Yonge and Davisville office in Toronto, its only location in Canada, were greeted by an answering machine.
Teachers and foreign union leaders say the Nova Group nightmare highlights the worsening treatment of foreign workers in Japan, once known for easy money during the 1980s bubble economy.
Workers characterize Nova Group, founded in 1981 and which now has 400,000 students, as an empire with a fly-by-night mentality that grew too big too fast, grabbing almost half of Japan’s burgeoning ESL market.
Nova Group’s problems multiplied earlier this year when a Japanese court ruled that it cheated thousands of students out of refund money, and created false ads, featuring a rabbit, that indicated students could study any time they wanted.
Campbell said Japan’s Industry Ministry neglected to monitor Nova from the beginning, and then over-reacted by banning the company from signing long-term deals with students.
“After that, Nova just started bleeding customers,” said Campbell. “The reports of staff not being paid accelerated the problems with their reputation.”
Teachers said about 2,000 Japanese staff, such as office workers, have not been paid since July in some cases.
Students, meanwhile, are demanding refunds. One Japanese college student, who asked not to be named, told a news conference yesterday that she recently paid 600,000 yen ($5,050) for three years worth of lessons. She plans legal action to reclaim 400,000 yen in refunds.
That might not be easy.
Osaka District Court yesterday granted Nova Group court protection from creditors under the Corporate Rehabilitation Law. Local press reports said the firm has debts estimated at 43.9 billion yen, or about $370 million dollars. The Jasdaq Securities Exchange in Tokyo suspended trading in Nova stock, and plans to de-list it on Nov 27.
The chain offered classes in conversational English, French, German, Spanish, Italian and Chinese. It recruited teachers at university campuses in Canada, the U.S., the U.K., and Australia, which supplied nearly half its foreign staff.
Embassies in Japan help unpaid teachers caught in foreign language school debt crisis
The Australian and British Embassies in Japan have begun providing assistance to their citizens working for Nova, Japan’s largest chain of private foreign language schools, after it filed for court protection from creditors.
The two embassies have set up sections on their Web sites to provide some support for teachers who reportedly have not been paid since September. Both said there were limits to how much assistance they could provide, because it was a private employment issue in Japan.
The Australian Embassy said the country’s Qantas airline will offer reduced airfare rate for a limited time to Australian Nova employees who want to return home.
The embassy will also provide a list of English-speaking lawyers for those seeking legal help, it said.
The British Embassy said it could help British employees of Nova contact family and friends in Britain if they were left with no funds, the embassy’s Web site said.
Osaka-based Nova Corp. has debts estimated at 43.9 billion yen (US$385 million; ?269 million) and employs about 4,500 foreign instructors, according to Japanese media.
Nova Corp. filed the protection request with the Osaka District Court on Friday under Japan’s Corporate Rehabilitation Law, according to court officials.
Nova officials were not immediately available for comment Saturday.
Nova’s current plight began after consumers filed complaints claiming the company’s advertisements about its services were misleading. In June the Ministry of Economy, Trade and Industry ordered Nova to suspend part of its business operations.
The company ? which promised in its advertisements a “study abroad experience at your local train station” ? has been forced to shut down some of its schools due to a sharp decline in student enrollment.
http://www.iht.com/articles/ap/2007/10/27/asia/AS-GEN-Japan-Nova-Court-Protection.php
Nova students, teachers up in arms
Students and instructors voiced anger Friday over Nova Corp.’s decision the same day to temporarily close all of its schools across the country.
Students are concerned about what will happen to their lessons and the fees they paid up front, and employees have criticized deposed President Nozomu Sahashi, saying he was “not qualified to run a company.”
Osaka-based Nova, which also filed for bankruptcy protection under the Corporate Rehabilitation Law on Friday, had previously been forced to close a succession of schools due to such factors as a worsening of its financial position and delays in paying instructors’ wages since the Economy, Trade and Industry Ministry ordered the firm to partially suspend operations in June.
According to a Nova employee, the company’s Tokyo headquarters sent e-mails or called every school ordering them not to open just after 9 a.m., with staff being told to stand by at home.
Foreign instructors and students arriving for morning lessons at the sixth floor of a building in Shibuya Ward, Tokyo–Nova’s main school in the area–found the lights were off. The lights had still not been turned on at 10 a.m., the time of the day’s first lessons.
“I paid 600,000 yen in advance for three years of lessons, and I still have two years to go,” a 35-year-old male student at the school from Nakano Ward, Tokyo, said.
A 31-year-old female student at Nova’s main school in Ginza said: “Even though I booked a lesson for the afternoon, no one told me anything. The school’s staff kept saying things would be fine, but they haven’t given a thought to us students.”
Foreign instructors and Japanese staff, most of whom have kept working despite having not received salaries since the end of September, spoke of their disappointment at a situation they felt would arise.
“It’ll be hard for me to find another job teaching French if the school is shut down,” a 39-year-old female instructor at the Ginza school said. “Nova could make a bit more of an effort.”
“I thought it might be hard to keep the classes going, but what will happen to my salary?” a 21-year-old female employee at different school in Tokyo said. “I’m anxious about how I’m going to live.”
A Nova employee handed out documents detailing matters such as the announcement of Sahashi’s dismissal to the press, which had packed into Nova’s Tokyo headquarters, located on the 23rd floor of a skyscraper in Nishi-Shinjuku, just after 9 a.m. She insisted she did not know anything more.
“Sahashi never said how he planned to rebuild the company, and honestly speaking, he isn’t qualified to be president,” a male employee said. “We’ve not only lost a lot of students, but also many employees.”
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Help lines for foreign teachers
The Health, Labor and Welfare Ministry opened consultation services for foreign instructors through the Tokyo and Osaka labor bureaus Friday to deal with the increased number of inquiries regarding matters such as unpaid salaries.
Hello Work job-placement offices in eight prefectures, including Tokyo and Osaka, had received 563 inquiries from foreign instructors as of Wednesday.
Consultations regarding nonpayment of wages and unemployment insurance, for which different departments are usually responsible, will both be available in the services. “Once we’ve got a clear picture of the situation [regarding the nonpayment of wages], we’ll take appropriate measures based on the law,” Health, Labor and Welfare Minister Yoichi Masuzoe said at a press conference following a Cabinet meeting Friday.
Inquiries should be made to the Tokyo Labor Bureau’s Shinjuku Employment Assistance and Instruction Center for Foreigners on (03) 3204-8609, or the Osaka Labor Bureau’s Osaka Employment Service Center for Foreigners on (06) 6344-1135.
Receivers want NOVA to be back offering classes soon
Failed English conversation school chain NOVA Corp. could be back in operation within a month with the support of companies willing to help it rebuild, its receivers said.
Court-appointed receivers for NOVA, Toshiaki Higashibata and Noriaki Takahashi, said they plan to start looking for backers for the failed chain, with current candidates including retail giants Marui Co. and Aeon Co. and the IT sectors’ Yahoo and Rakuten, with other companies also having put their names forward.
Whether NOVA can actually be rehabilitated remains another matter, as it is mired in debts of tens of billions of yen, including about 4 billion yen in unpaid wages to teachers and other staff.
Ousted NOVA president Nozomu Sahashi’s fate also remains unclear. “We’ll look at the case first before deciding what legal measures to take,” one of the receivers said.
NOVA collected over 40 billion yen from students as advance payments for English language conversation classes, more than it had gathered at the end of March. It owes some 4 billion yen in unpaid wages.
Receivers said they want to maintain NOVA’s nationwide network, and are willing to make it a condition that any company stepping in to help the chain allow students who paid the failed chain for lessons to be able to receive them.
NOVA’s roughly 4,900 employees have been told to wait and the chain’s schools have all been suspended from operating. The tens of billions of yen in debt that NOVA accumulated has made selection of a backer to save it essential, but if a rescue plan can’t be worked out, NOVA will have to file for bankruptcy.
NOVA’s student numbers have plummeted from about 418,000 at the end of March to around 300,000. During the same time, it has gone from 925 schools to 669. The 300,000-plus students, staff and teachers are all NOVA creditors and receivers’ negotiations with them are expected to be prickly.
http://mdn.mainichi.jp/national/news/20071027p2a00m0na007000c.html
Nova chain files for bankruptcy
A Hello Work public job placement center in the Kabukicho district of Tokyo’s Shinjuku Ward set up a window Friday to accept consultations from Nova employees, including foreign teachers.
Nine staff members and three interpreters took charge of the consultations.
More than 20 telephone calls came in the morning alone.
Four people also visited the window, asking such questions as: “How can I get the unpaid wages?” “What procedures should I take to obtain unemployment insurance benefits?” and “Can you find a new workplace for me?”
One of the four was a 24-year-old American who had worked at a Nova school in Tokyo’s Shinbashi for one year as a teacher. He has not been paid since September, and said he wants to live in Japan for three more years.
“What should I do now?” he asked.
http://www.asahi.com/english/Herald-asahi/TKY200710270106.html
Teachers face expulsion in schools shutdown
THOUSANDS of young foreigners teaching English in Japan were left jobless and in danger of expulsion from the country yesterday after the embattled language education giant Nova shut its 925 schools and sought bankruptcy protection from creditors pursuing 43.9 billion yen ($420 million).
At least 5000 foreigners, 2000 Japanese staff and 400,000 students at the private English-teaching chain have been left in a precarious financial position by the move, which could herald one of the biggest corporate collapses in Japan’s history.
Australian teachers, who make up one-fifth of Nova’s foreign staff, are regarded as the backbone of Japan’s billion-dollar English-teaching industry.
Along with their Japanese colleagues, they are owed wages for at least two months.
“I’m due more than $6000, and to be honest, I seriously doubt I’ll ever see a cent of that,” said 27-year-old Chris McCauley, from Melbourne, who taught at a Nova school outside Tokyo for two years. “I’m really pissed off. I have $270 in the bank and I don’t know what I’m going to do.
“I can’t afford a flight home, and getting a new English-teaching job is going to be virtually impossible while 5000 other ex-Nova teachers are competing. This is scary.”
Foreigners sponsored by Nova to work in Japan face the possibility of losing their visas, and consequently their right to stay in the country.
The Foreign Affairs Minister, Alexander Downer, earlier pledged government assistance to the “1300 Australians who are suddenly finding themselves in the street”. “If they get into real personal difficulties, we’ll obviously help them out”, he said.
As several teachers called family members for help yesterday, their students went to schools to vent their anger over Nova’s inept management.
Nova’s president, Nozomu Sahashi, who owns a 16 per cent equity stake in the Osaka company, did not turn up to an emergency board meeting on Thursday and was still nowhere to be found yesterday, Nova said.
The company dismissed him from the board for failing to explain his “opaque way of fund-raising and negotiating with potential business alliance partners”. The company is now jointly represented by three board members, including Anders Lundqvist, who co-founded it in 1981.
At Osaka’s District Court, Nova pledged to find a sponsor for its rehabilitation under the supervision of a court-appointed administrator. It has said it would need a significant cash injection within 10 days to survive. But most industry sources believe it is doomed. The Jasdaq Securities Exchange for start-ups and venture companies said it would delist Nova today.
At its peak the chain controlled half of Japan’s private English-teaching industry. It was plunged into financial crisis this year, partly due to overexpansion, but also because the Ministry of Economy, Trade and Industry banned the company from signing new students on long-term contracts for six months after it was found to have lied about its services and cancellation policy.
Its demise has been embarrassing for the Government, whose senior spokesman, Nobutaka Machimura, said yesterday: “This matter affects not only our students but all the foreign teachers and staff, so we very much hope the impact on them can be minimised.”
Nova founder Sahashi took dictatorial approach
Nozomu Sahashi, founder and former president of Nova Corp., was known as a dictatorial person who had to decide everything himself as he drastically expanded the firm’s business.
Even after the firm was ordered in June by the Economy, Trade and Industry Ministry to partially suspend its operations, Sahashi made efforts to raise funds for the firm’s operation. However, he was ousted from the post of president in a “coup d’etat” mounted by his business partners.
Sahashi, who studied in Paris after graduating from high school, was 29 when he founded Nova Corp. in 1981.
The firm became the nation’s largest English-conversation school chain operator in a short period due to its promotions that used easy-to-understand catch-phrases, such as “ekimae ryugaku” (study abroad near your train station), and the Nova rabbit mascot.
When the firm was established, other English-conversation schools were charging as much as 10,000 yen per lesson. But the firm offered lessons for only 1,800 yen and gained broad support from students.
While he was known as a person of ideas, he was extremely autocratic. Some employees of the firm found his business expansion policy excessive. However, Sahashi reportedly simply gave orders and would not listen to arguments.
After the firm began suffering financially, Sahashi single-handedly began looking for firms wishing to form business tie-ups with Nova and attempted to secure operating funds. However, he never disclosed the details of his negotiations to the firm’s executives.
Whenever the executives asked him to explain the details of his negotiations, he just asked that his efforts not be interrupted, saying he would soon be able to conclude a business tie-up.
Sahashi, whose whereabouts lately have been largely unknown, has recently sent orders to subordinates via e-mail and other means.