It’s said that the bigger they come, the harder they fall, and it’s difficult to imagine a harder fall than Nova’s.
Following Nova Corp.’s well-documented troubles over the last few months, Japan’s biggest language school chain is now in the hands of administrators, and is likely to be declared bankrupt next month unless a backer is found. Students and teachers have been left in the lurch, unsure of when or if they will ever receive money they are owed by the company.
But how long has the crash been coming? If the company’s pay policy is any indication, for quite a while. According to instructors who were with Nova around 2000, annual raises of ¥10-15,000 a month were handed out almost as a matter of routine. However, this has changed in recent years; while pro rata starting salaries have remained unchanged, most new instructors were hired on reduced-hour contracts (34 or 37 lessons a week, rather than 40) with a lower base salary to match. Annual raises were also cut back, to generally no more than ¥5,000, usually less.
Wages at Nova have fallen, and while specific statistics on foreign teachers’ pay are unavailable, the evidence of job Web sites and recruitment ads, as well as the general feeling among teachers, point to a significant and continuing downturn in wages across the whole “eikaiwa” (conversation school) industry.
Teachers who have lived in Japan for a number of years say they have seen the average salary drop substantially, a result they put down to the end of the bubble economy, changes in employment law, and an increase in the number of teachers. One Australian instructor who has been living and working here for 15 years noted that for the first few years after he arrived, “most teachers were taking home a minimum of ¥350,000 per month.”
In addition, “there were always well-paid part-time jobs, some well over ¥10,000 an hour, so it was quite simple to supplement your salary and take home well over ¥400,000 to ¥500,000 per month.”
These days, while there are still entry-level teaching jobs that pay ¥250,000 per month or more, it’s not uncommon to see others paying as little as ¥200,000.
Hourly rates for part-timers have seen a similar decline ? ¥4,000 appears to be the ceiling, with the average being somewhere between ¥2,000 and ¥2,500.
Salaries go down and workers complain ? it happens in every country and every industry. In fact, since the turn of the century in Japan, average wages have fallen from around ¥305,000 per month to ¥284,000. However, this is a much less dramatic drop than that of foreign teachers’ wages, and the trend in Japan is starting to reverse, with salaries up almost 1 percent on last year.
Usually, employers are happy to be in such a position ? it’s a buyer’s market and they can hire for less. However, the old adage that “you get what you pay for” also applies. As wages have dropped, say school owners and recruiters, so has the quality of teachers.
“As a school owner for many years and involved actively in recruitment, the quality of resumes I get is exceptionally poor,” complained Ash Warren, who runs a number of schools in Tokyo. “Very few people have actual qualifications as a foreign language teacher, such as CELTA, DELTA or an MA in TESOL.”
Whereas in the past there was a wealth of qualified teachers, Warren rued the fact that now “most resumes are from people who have no experience at all or who have worked for one of the major schools like Nova for a few years.”
His feelings were echoed by others involved in teacher recruitment. Lack of qualifications and experience were the most common complaints, but other HR staff spoke of applicants who seemed to be looking for little more than a visa, and carbon-copy resumes that had obviously been sent out en masse.
Those who suffer most from a lack of quality teachers are inevitably the students. Most school owners and administrators interviewed said that this was one of their biggest problems.
“As the dearth of qualified ? or at least highly experienced ? teachers increases, the quality of training students receive is bound to get worse,” said Warren.
Ken Worsley of Japan Economy News sees Nova’s downfall in the context of a move by students away from the big “eikaiwa” chains and the expansionist, wage-cutting model Nova boss Nozomu Sahashi took to its extreme.
“As the ESL industry grows, the share that goes to large-scale English conversation schools continues to shrink,” explained Worsley. “They have relied on cost-cutting strategies, which may be effective to some degree, but ultimately fail because they do not address revenue-side issues.”
There’s good reason to imagine that Nova’s bankruptcy would have a negative impact on wages, at least in the short term. Though many teachers would likely leave Japan, there would still be hundreds ? possibly thousands ? of newly unemployed teachers joining those already looking for work.
“I think we’ve been seeing a stream of teachers looking for new work over the past couple of months, and that market is only going to get more competitive,” said Worsley. “It is quite likely that we will see somewhat lower wages over the next year, although if a significant number of teachers were to leave Japan, there could be a shortage of teachers and wages might stay the same.”
The scenario in the event of a Nova recovery could be even bleaker for teachers’ pay packets.
“If Nova finds a backer, I doubt that they would assume responsibility for Nova’s unpaid wages,” warned Worsley. “Assuming responsibility for this cost is not a requirement of the trustees who have been appointed to find a buyer for Nova. It is quite possible that a buyer could decide to terminate all existing employment and re-hire a crew of teachers, though there are of course costs associated in doing this.”
This would allow the new firm to re-hire an entire workforce at entry-level wages, so that former Nova teachers might find themselves having to take a pay cut to get their old jobs back, for lack of any other opportunities. The negative effect this would have on wages throughout the industry is easy to imagine.
On the other hand, some dare to believe that the disappearance of Nova from the scene could have a positive effect.
“This might actually be a good thing in terms of making the market a bit more savvy about where to go for an English lesson,” said Warren. “People are finally beginning to look past the idea of investing in a big chain school, and thinking more about who is actually teaching them. Hopefully, people are realizing that the teacher is the most important thing.”
If this is the case, schools will have little choice but to hire well-qualified and experienced teachers, and the only way they will be able to do so will be by offering a genuinely attractive salary.
Government pledges to help Nova find rehab sponsors
The government has promised to offer support for Nova Corp. in seeking corporate sponsors to help its turnaround efforts, lawyers working for the failed language school chain said Monday.
“We came here to ask for help to find sponsors and also for support to Nova students who have been unable to take lessons,” lawyer Toshiaki Higashibata told reporters after visiting the Ministry of Economy Trade and Industry.
METI accepted the request, Higashibata said, although details such as how deeply the ministry will be involved have yet to be discussed.
He also said the number of Nova students who cannot study stands at some 300,000 because the company has halted classes nationwide.
The Osaka District Court last week appointed Higashibata and another lawyer to serve as administrators of Nova’s assets.
The court granted Osaka-based Nova protection from creditors Friday following its nonpayment of wages to employees.
Higashibata said he has not been able to contact ousted Nova President Nozomu Sahashi, whose whereabouts has been unknown for some time.
Despite the government’s promise of assistance, however, METI appeared to be struggling to decide how to proceed.
Shinji Fujino, METI’s service industry division director, said in a news conference, “We will move between Nova and industry bodies and will also consider an intermediary role in seeking sponsors if requested.”
But he admitted that the ministry does not know what commitment it can legally make.
“We are not authorized by any specific laws” in cases like this, Fujino said. “So we have to examine what we can do.”
Even if Nova finds a sponsor as it rehabilitates itself, many of its teachers have found themselves scouring a job market already flooded with job seekers. Public job centers say they have constantly received inquiries from such teachers, while the Australian, British and New Zealand embassies have offered assistance for finding work, although their help is limited because of their public nature.
Returnees’ wages considered
The Osaka Labor Bureau will ask Nova Corp.’s caretaker administrators to confirm the home addresses of those foreign instructors who return to their home countries without receiving wages from the English conversation school chain and be responsible for paying them, the bureau announced Monday.
The firm has failed to pay foreign instructors since September.
Since Friday, 76 foreign instructors from Nova have visited the Osaka Employment Service Center for Foreigners in Kita Ward, Osaka, where the labor bureau provides consultations. The center also has received 127 telephone inquiries mostly about the unpaid wages from those concerned about whether they will receive wages after they return to their home countries.
If the Corporate Rehabilitation Law is applied to the firm, workers will have the right to receive their wages. Even if the firm goes bankrupt, the law ensures the government will pay 80 percent of the employees’ wages and retirement allowances on behalf of the firm.
Yasuo Kuwajima, head of the labor bureau, said the firm should not remove foreign instructors who have already gone back to their countries from a list of those who are eligible to receive unpaid wages on the grounds the firm could not contact them.
A 37-year-old Australian woman who visited the center Monday said she was having difficulties in paying her rent, adding that she hoped a firm to sponsor Nova’s rehabilitation would be chosen soon.
The woman also said she wanted Sahashi to appear in front of Nova instructors and staff members because he had caused so much trouble for so many people.
The General Union, which represents many Nova instructors as members, held a briefing session Monday in Osaka
The union agreed to ask Nova’s caretaker administrators to ensure the firm cooperates in making the necessary documents for available for Nova employees to apply for unemployment insurance benefits.
Nova–end of the tracks? / ‘Egotistic’ Sahashi’s interference prompted Nova coup d’etat
English conversation school chain operator Nova Corp. has filed for court protection from creditors after running into financial trouble under its president, Nozomu Sahashi, who has since been sacked by the company’s other board members.
This is the first installment of a three-part series of articles taking an in-depth look at Nova’s collapse.
The three Nova Corp. directors had been waiting more than an hour for the company’s founder, Nozomu Sahashi, to show up for an extraordinary board meeting scheduled to begin at 9 p.m. at the firm’s Tokyo office Thursday, when Sahashi called one of their cell phones.
“I’m somewhere else now, I want to hold the board meeting here,” Sahashi said.
Shoichi Watanabe, Hitomi Yoshizato and Anders Lundqvist refused to comply with Sahashi’s request, and began the meeting on the 23rd floor of the Shinjuku NS Building in Shinjuku, Tokyo, without him.
Within about 10 minutes, the three board members had agreed to dismiss Sahashi as president and to file for court protection from creditors under the Corporate Rehabilitation Law.
The three had reasons for ignoring Sahashi’s request this time.
Two days earlier, Sahashi had chosen a Tokyo hotel lobby as the venue for an extraordinary board meeting.
At the meeting, Sahashi repeatedly told the directors, who were pressing him to make a decision regarding his resignation and on filing for legal liquidation of the company, that he could raise 3 billion yen by Thursday. As the other executives had to speak quietly to avoid attracting people’s attention, Sahashi insisted he wanted to put off a final decision until Thursday evening.
The directors are said to have felt if they had complied with Sahashi’s summons on the Thursday evening, they would once again be left following his lead.
This distrust was behind their “coup d’etat.”
The board members were close associates of Sahashi’s, and had gone through a great deal with him over the years. Lundqvist has been a partner of Sahashi’s since Nova was founded in 1981, and Yoshizato went to work with him as a part-time worker at the same time.
But despite their long history, the three board members are said to have rebelled because of what they saw as the egotistical actions of Sahashi and their feeling that the company had become a one-man show.
In a meeting held in late May in Tokyo, Nova’s management was in the final stages of discussions over a capital and business tie-up with leading retailer Marui Co.
In return for Marui giving Nova a 6.6 billion yen capital injection, Nova would have given Marui exclusive rights to issue all loans taken out by its students. The deal would have included conditions favorable to allowing the four board members, including Sahashi, to stay in their posts.
But moments before an agreement was reached, Sahashi, 56, without giving a reason, asked for a little more time to consider the deal and walked out of the meeting. He could not be found for the next three days.
Sahashi’s actions appalled Marui, which pulled the plug on discussions.
The former president’s interference reportedly put an end to several more plans for tie-ups prepared by the board members, creating a widening gulf between Sahashi and the board.
However, it was the firm’s area managers–executives in charge of groups of schools in each region–that sparked the board members’ uprising.
The area managers handed a written petition to Sahashi in person on Aug. 17 demanding his resignation, and calling for the company to ensure Japanese staff and foreign instructors were paid on time.
The petition contained phrases such as, “We want Sahashi to step down to restore our corporate image.”
The signatories also stated they would resign on Aug. 31 if Sahashi did not comply with their demands.
But even then, Sahashi is said to have offered little but excuses, making statements such as, “I’ll have some good news for you in September,” and “The company won’t go under if we honor our debts.”
The regional managers petitioned for Sahashi’s resignation on five occasions, convinced the firm could not be rebuilt with him at the helm.
The board members and other executives contacted lawyers, the Economy, Trade and Industry Ministry and Sumitomo Mitsui Banking Corp., Nova’s main bank, at the beginning of October to begin plans to oust Sahashi and to file for court protection.
Sahashi, an individualist who drove Nova to the top of the English conversation school market, is still in hiding.
“Ultimately, that man only ever thought of himself,” one of Sahashi’s aides commented.
Language school teachers face axe
Hundreds of British teachers in Japan face redundancy and possible eviction after the collapse of the country’s largest private provider of English language lessons.
More than 900 Britons are among thousands of tutors who look set to lose their jobs following an announcement that the Nova school chain has filed for bankruptcy.
The British embassy in Japan has set up a section on its website to provide assistance for nationals affected, many of whom have reportedly not been paid since September.
Nova, which has been operating since 1981, employs around 4,500 foreign teachers to work in its network of outlets in Japan.
Of those, just under 1,000 are believed to be British, with a similar number originating from Australia and even more coming from the US.
Many of the tutors are young graduates or Westerners earning a bit of money whilst travelling through the region.
The school applied on Friday for court protection from its creditors. It is estimated at having debts of 43.9 billion yen (£190 million)
Some teachers’ problems are compounded by the fact that their rent is paid direct to landlords by Nova.
The British Embassy in Japan, on its website, states that it is “monitoring the situation”.
It adds: “In the event that you were left with no funds, the Embassy can assist you to contact your family or friends in the UK. However we cannot provide financial funding for British Nationals. You may wish to discuss your situation with your family and friends to make sure you have emergency funds if needed.”
http://ukpress.google.com/article/ALeqM5hDlciyfpe0FWXy79okrilcdas8mw
Ex-President’s Equity Stake in Nova Falls Sharply
Failed foreign language school Nova Corp. <4655> said Tuesday the equity stake held by its former President Nozomu Sahashi and his family in the company fell sharply in the April-September first half of fiscal 2007 for unknown reasons.
As of Sept. 30, Sahashi, founder of Nova, and an Osaka-based firm fully owned by him and his family held a combined 20.2 pct of Nova’s total voting rights, down sharply from 72.6 pct as of March 31.
Although the change was sudden and big, no details of its background are available at the moment, Nova said in a press release.
Despite the sharp ownership decline, Sahashi was the biggest shareholder in Nova as of Sept. 30 with a stake of 16.27 pct in terms of voting rights, Nova said. The Sahashi family-owned firm ranked third with a 3.75 pct stake.
As of March 31, Sahashi was the second biggest shareholder with a 36.11 pct stake and the family company was the top owner with a 36.58 pct interest.
Last week, Nova dismissed Sahashi from the presidential post and filed for court protection from creditors, leaving liabilities of about 43.9 billion yen. The action came after Nova, the industry leader, suffered a sharp drop in the number of students chiefly due to a series of disputes over fees for canceled lessons and a business suspension imposed by the government.
Nova received a six-month partial business suspension order in June as a penalty for giving false explanations on its lessons to prospective students.
School’s closure in Japan exposes tough times for foreign teachers
Nova, the largest language school, declared bankruptcy last week.
Twenty years ago, native English speakers in Japan used to joke that they could make $100 an hour as an ESL teacher because they speak “a” language.
These days, teachers feel as if the joke is on them. Some 4,000 foreign teachers are without jobs and are owed $4,000 in back pay after Japan’s largest school chain, Nova Corp., closed its 900 schools last week, declared bankruptcy, and failed to pay refunds to its 400,000 students.
The collapse of Nova might not just be Japan’s largest consumer story this year. Foreign embassies, Qantas Airlines, and local unions and media are rallying behind students and teachers, who Sunday night set up a “Nova Relief Fund” to help hundreds evicted on short notice from apartments supplied by Nova. “We just need to think about the 1,300 Australians who are suddenly finding themselves out on the street there in Japan,” said Australian Foreign Minister Alexander Downer.
Nova’s demise is also illuminating Japan’s worsening reputation for its dealings with thousands of skilled Western workers who, despite speaking Japanese and raising Japanese children, are denied voting rights, tenure at universities, promotions, and contracts beyond one-year agreements with few benefits.
An Industry Ministry survey in 2002 listed 15,800 foreign teachers and about 1 million students at private language schools such as Nova. Thousands more teach privately via networking sites such as findateacher.com, and at most public schools, with 3,800 in Tokyo alone.
“We’re being treated like cheap migrant labor down in the southern United States,” says Paul Baca, a young Canadian. One of thousands of “perma-temps,” he has been going from job to job over the past decade. “About 99 percent of us have university degrees…. [W]e’re not treated like skilled workers in other countries.”
Ryan Hills quit his $18-an-hour insurance job in Indiana to fly to Tokyo in June in hopes of earning ¥260,000 (about $2,300) a month at Nova. “My flight landed, and the next day I heard about Nova on the news,” says Mr. Hills. “I wanted to study Japanese language and culture but I’ve been too busy battling landlords and management at work.”
He and his roommates from England and New Zealand were evicted after Nova didn’t pay rent already deducted from their salaries. With only ¥9,000 left, he’s hoping to receive an emergency loan offered by the US Embassy. “Ramen noodles are not that filling after a few days. The last job I applied for had 900 applicants. But I don’t want to leave Japan. I cut off everything at home, for nothing.”
Arriving a month ago after graduating from the University of Idaho, Derek Archer calls himself “one of the poor saps who got here when all this was happening. The trainers said, ‘Don’t worry.’ But then our area manager said, ‘You have six days to get out of your apartment.’ I was totally lost.”
His student, an elderly woman, offered to put him up for two months. “I’m [fortunate]…. Others are scraping for food money.”
TV news sob stories of impoverished blond-haired, blue-eyed refugees was not the intention of Japan’s kokusaika, or internationalization. During the bubble economy of the late 1980s, thousands of Westerners earned $3,000 a month to chat with Japanese at national schools such as ECC, Geos, and Nova. But wages have stagnated or declined. Some schools have closed.
Teachers say Nova grew too big, with nearly half the market. “This is a crisis created by a company operating in very improper ways,” says Bob Tench, who taught with Nova for 13 years.
Nova teachers joined the National Union of General Workers in the 1990s. Union representative Catherine Campbell says firms abuse the yearly-contract system. “Teaching in Japan … [is] a really hard situation if you are serious about a long-term job.”
Ms. Campbell says Japan’s Industry Ministry didn’t monitor Nova early on, and then overreacted by banning long-term deals with students. “After that, Nova just started bleeding customers.”
About 2,000 Japanese staff have not been paid since July, while many students are threatening legal action to get refunds. But Osaka District Court on Friday granted Nova court protection amid reports that Nova owes ¥43.9 billion. The Jasdaq Securities Exchange suspended trading in Nova stock.
Calls to Nova’s offices went unanswered.
Mr. Tench says teachers should be treated as professionals rather than tourists who speak a language. Some teachers say they fear a new trend of schools hiring cheaper college grads from the Philippines.
Still, many teachers vow to stay on. Sam Gordon, who came to Japan five years ago, says he became attached to his students. “I don`t want to go back to America, I have no job there. Now foreign teachers have a bad image in Japan. I feel bad for the students, too. They didn’t even get to say goodbye to their teachers.”
Rakuten, Aeon rule out trying to help save NOVA
Rakuten Inc. and Aeon Co., both suggested as potential companies to bail out critically endangered English conversation chain NOVA Corp., ruled out stepping in to save it Monday.
NOVA’s 40 billion yen in debts and the likelihood any savior would have to taken over them appears to be scaring away saviors.
“It’s extremely difficult even to think about taking this on,” Rakuten CEO Hiroshi Mikitani said.
Aeon’s Takuya Okada was equally bearish about NOVA.
“We haven’t been asked to do anything and we haven’t done anything,” he said.
NOVA filed for protection from creditors last Friday and is currently in the hands of receivers.
http://mdn.mainichi.jp/national/news/20071029p2a00m0na056000c.html
Activists blast Japan’s plan to fingerprint foreign visitors
Japan’s plan to fingerprint and photograph all foreigners entering the country ages 16 or over to guard against terrorism is a serious violation of human rights, activists said Monday.
Only some permanent residents, diplomatic visitors and children will be exempt from Japan’s new entry controls, which take effect Nov. 20.
“The introduction of this system is a violation of basic human rights, especially the right to privacy,” said Makoto Teranaka, secretary-general of the human rights group Amnesty International Japan. He said it unfairly targets foreigners since Japanese could also be terrorists.
Under the new regulations, all adults will be photographed and fingerprinted on arrival in Japan, according to the country’s Immigration Bureau. Incoming aircraft and ship operators also will be obliged to provide passenger and crew lists before they arrive.
Resident foreigners will be required to go through the procedure every time they re-enter Japan, the bureau said. Immigration officials will compare the images and data with a database of international terror and crime suspects as well as domestic crime records. People matching the data on file will be denied entry and deported.
“I know this may cause a lot of inconvenience, but it’s very necessary to fight terror,” Justice Minister Kunio Hatoyama told reporters Monday.
“We are facing a terrorist threat as a reality today, and Japan may also become a victim of a terrorist attack,” Hatoyama said.
Similar measures have been introduced in the United States.
Tokyo’s support of the U.S.-led invasions of Afghanistan and Iraq and dispatch of forces to each region have raised concerns that Japan could become a target of terror attacks.
Japan previously fingerprinted foreign residents in Japan, but that system was abolished in 1999 following civil rights campaigns involving Japan’s large Korean and Chinese communities.
http://mdn.mainichi.jp/national/news/20071029p2a00m0na052000c.html
October 28, 2007 Nova Information Session
NHK report on the Tokyo Nambu/Nova Union of Staff and Teachers October 28, 2007 Nova Information Session: