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EspañolNOVA (ENGLISH SCHOOL IN JAPAN)
The 'Nova Group' is the largest of the Big Four eikaiwa (or private English teaching companies) in Japan. As of March, 2004, the company operates a chain of 618 Nova branches plus the Multimedia Center located in Osaka, Japan.
Nova Market Share
History and services
The 'Nova Group' was founded in August 1981 and is led by CEO .[2] NOVA's corporate headquarters is in Osaka. The Company is the largest employer of foreign nationals in Japan,
New Nova hours pose health risk
employing 7000 foreign workers, 5000 of whom are employed as language instructors.
English schools face huge insurance probe
Each year NOVA hires between 2500 and 2600 foreign teachers to replace those who have left.
Notice from Nova regarding news reports
Although instructors are not required to have traditional educational training, the company provides a salary bonus for teachers with an accredited TEFL certificate, any Masters Degree or a degree in education. Teachers can be admitted straight from university graduation with any degree that allows them to obtain a work visa. Instructors from participating countries
Ministry of Foreign Affairs of Japan
who can obtain a Working Holiday Visa may be admitted without a degree. They work fewer hours and earn less pay than full-time instructors.
Sahashi originally established the company with two high school graduates from Sweden and Canada whom he met via a friend who was studying abroad in Paris, opening the first classroom in the Osaka Sinsai bridge. The name 'NOVA' (an astronomical term for a new star) was chosen by Sahashi as he felt it would appeal to prospective students.
Nova - Restrictions Inevitable
In November of 1996, Nova's initial public offering was met with several demonstrations in front of Nomura Securities and the Tokyo Stock Exchange. A complaint filed by The Nova Union cited the company was violating Japanese exchange laws by falsely stating that there were no unions at Nova or no pending litigation and that labour relations between the company and its employees were amicable and untroubled.[3][4][5]
Since 1997, Nova steadily expanded the number of its schools as its business grew, going from 239 schools to 623 in 2004. By 2002, Nova had captured 50% of total market share by revenue (61.5 billion yen) and in 2003 Nova had gained a 66% market share by number of students, some 410,000 students in total, but 2005 saw Nova loose ground in total sales revenue.
Nova Corp. Website
The company was in the red in the business year ending in March for the second consecutive year,
Executives of scandal-tainted companies bow in remorse at shareholder meetings
posting net losses of 3 billion yen in fiscal 2005 and net loss of 2.4 billion yen in fiscal 2006 after a failed expansion attempt. The number of students fell to 418,000 as of the end of March, down 12.1 percent from a year earlier.
SERVICES: Nova Corp. eyes capital tie-up
Financial strains
In March 2005, after the General Union filed a complaint, Nova and other English schools in Japan were investigated by the Social Insurance Agency for not enrolling employees in ''shakai hoken'' (Employees Health Insurance and Pension). The law stipulates that companies must enroll all full-time workers who have been in Japan for over two months in the system. Payment is split between employer and employee, each paying about half the monthly premium amount.
A recent decline in the stock price following the release of Nova's 2008 fiscal year first quarter financials
Nova shares fall after poor performance in 1st quarter
was preceded by news of a delay in payment of wages and bonuses to some employees.
Nova explains a “system trouble” causing delays of wages
Nova explained that the delay in the monthly wages was due to change in its payment system and personnel management and accounting sections that had not been completed on time and that the summer bonus delay until October was a business necessity that required employee co-operation.
Unpaid salary showing a predicament for Nova management?
Indications of an impending financial crisis stemed from a rapid increase in refund claims that total nearly 5,000,000,000 Yen nationwide. An Aug. 21st article in the Tokyo Kezai, Nova was described as repeatedly delaying payment to business partners and banks, falling into arrears for printing costs at the end of July, asking an ad agency to defer a payment.
The end of the road for Nova's business practices as cash flow crunch intensifies
Nova's 2008 first quarter financials showed a loss of 4,300,000,000 Yen, and a %19 decrease in sales compared to the previous year period and overall %19 decrease in reoccurring profit. Nova cited a decrease in the number of students and deterioration of its image as an explanation.
NOVA sees decrease in students and 4,300,000,000 Yen loss in Q1.
NOVA down 4,300,000,000 Yen loss in Q1, sees decrease in student enrollment.
Marketing
Eikaiwa chains aggressively operate extensive advertising campaigns in print and on television and have a very high profile and strong brand recognition.
How U.S. stars sell Japan to the Japanese
"More English than England itself": the simulation of authenticity in foreign language practice in Japan, , Seargeant, Philip Seargeant, International Journal of Applied Linguistics, , Until recently, Nova used an animated pink rabbit (Usagi) for the popular face of the company, appearing often on as the focus of Nova's commercials TV and other advertisements.
Nova's abused bunny ad leaves activists hopping mad
The rabbit appealed strongly to children and became extremely popular. The introduction of 'Usagi' merchandise saw sales totals of over ¥260 million yen in the first 2 weeks of availability.
Japan Market Research
Nova partially discontinued using the rabbit in January 2003 after JSPCA Animal rights activists lodged a protest over a commercial that featured the rabbit getting its ears ripped off citing concerns of its impact on children's awareness of death.
Many of Nova branches are located near train stations, and the company uses the term ''ekimae ryūgaku'' ("foreign studies near the train station": 駅前留学) in its promotional materials. The catch phrase helped Nova to become the nation's biggest chain of English language schools.
Exploiting the zeal of Japanese to learn English
It similarly promotes its interactive multimedia network as ''ochanoma ryūgaku'' ("study abroad from the living room": お茶の間留学).
Nova Corp. Website
Nova's success is also attributed to its promises of a foreign teacher, smaller class sizes than its rivals, and an appointment system that allowed students to schedule and attend class at their convenience.
Nova students say they are learning how to watch their money disappear
However, in 1997, 18 students filed a grievance with the Tokyo Metropolitan Governments claiming they were unable to make lesson appointments when they wanted despite the school's advertisements stating that its students could reserve classes "at any time." The students said they had purchased hundreds of tickets when joining the school, but found it impossible to use them all by the expiry date due to inflexible scheduling procedures. NOVA agreed to a proposal by the Damage Relief Committee to repay a total of 3.8 million yen
and said the dispute had been the result of a misunderstanding.[6]
Services
The Company offers English courses for adults, children, business English and test preparation (TOEFL, TOEIC) as well as Chinese, French, Spanish, Italian, and German instruction. Through subsidiaries, the company also offers telecommunications and travel agency services and offers in-house English instruction, translation and interpretation services for Japanese corporations.
Glova Website
Japan - Change and Continuity, , Jeffery, Graham, Routledge, ,
While Nova's main product continues to be English language services, the company has shifted some of its focus towards China, as 100,000 of its students currently study Chinese.
Sizing up China: Language students put their money where their mouths are
Employment & Labor Relations
Drug Testing
In 1994, after two instructors were arrested on drug charges in August and September, Nova asked all 3,100 instructors to sign an agreement to have a mandatory drug test, the results of which would be reported to the police. The drug test only applied to foreign staff.
"Nova teachers seeking legal help"
[7] The Osaka Bar Association wrote an opinion that the policy was a violation of the teachers' right to privacy.[8] Nova claimed consent forms had been received from more than 90 percent of employees. According to the union, no instructors were ever required to take a drug test.[9] On January 31st, 2007, seven Nova teachers were charged with possession of illegal drugs arising from the arrest of two men in Roppongi on November 19th, 2006.
7 Nova teachers arrested for possessing cannabis, cocaine
Shakai Hoken
English schools face huge insurance probe
In June 2005, Nova amended its working times for instructors and standardized lesson length to 40 minutes, with two minutes either side for lesson planning and student evaluation resulting in a total lesson time of 44 minutes with 6 to 11 minutes unpaid time between classes. As a result of changes to working hours, regular non-titled teachers work under 30 hours a week and are ineligible for ''shakai hoken'' giving an estimated saving to the company of over one billion yen in annual premium payments. Teachers can register for National Health Insurance (a different system to Shakai Hoken), although this system does not offer coverage for time taken off work due to illness. Nova also offers its own private insurance program.
Anti-fraternization policy
After six employees had been fired for violating a clause in their contracts that forbid interactions between students and instructors outside of the classroom, a complaint was filed with the Osaka Bar Association by two employees, one of whom had been dismissed as a result of the policy. The two instructors claimed the policy violated their human rights and argued it was racial discrimination since it only applies to foreigners. The clause in Nova's labor contract states foreign teachers 'should not have a relationship with customers outside the workplace.'[10]. The Osaka Bar Association subsequently issued a non-binding recommendation that the company drop the clause saying that it restricted instructors' freedom of association and discriminated between foreign and Japanese staff.[11]. The company said the clause is there 'protect both the teachers and the students from trouble, as they do not know each other's cultures and customs'[12].
On December 11, 2005, an Australian who had been teaching in an Osaka Nova branch reached an out-of-court settlement of ¥400,000[13] and a letter of commendation after claiming that the policy had interfered with his life. The teacher had been demoted and transferred to another school branch in 2004 when Nova found out he had a relationship with a 21-year-old student.
Hard lessons in broken English
Contested Dismissals
In November 2004, union supporters gathered outside Nova's Shinjuku Honko school, protesting dismissals of 5 teachers, three of whom had been working at Nova for more than 10 years. All were members of the Nova union (a branch of the NUGW). The union alleged they were dismissed due to their union activities.
Class Action
In March 2006, Kara Harris reached a financial settlement with Nova for approximately 7 million yen after she had been dismissed following her request to be made a permanent employee during negotiations with Nova over her sixth consecutive contract.
Times get tough for teachers
Nova had originally offered her a 12-month extension, and after disputes with her manager over several issues, she sued Nova for wrongful dismissal. Successive courts found that Harris was unfairly treated by Nova.
Government Intervention
Concerns Raised about Refund Policy
On February 16, 2007, the Japanese Ministry of Trade, Economy and Industry and the Tokyo Metropolitan Government conducted on-the-spot inspections at Nova Headquarters in Osaka and several other branches.
Inspection over frequent cancellation problems at NOVA
Officials said that several Nova schools failed to give full refunds to students who canceled their remaining lessons after paying in advance. Other clients said that NOVA refused to accept unconditional cancellation of lessons, claiming the eight-day "cooling-off" period had expired, and had also deceived students by giving false information about their cancellation procedures.[14][15]"Nova searched in contract row" The Asahi Shimbun February 17, 2007. Retrieved February 21, 2007The Kyoto Consumers Contract Network NPO also expressed similar concerns.[16]
Reductions in the number of teaching staff since 2004 had created a situation where students found it increasingly difficult to schedule classes, precipitating a substantial increase in complaints.
Nova President "No need to stop selling because of insufficient teachers"
During the February office inspections the Ministry had discovered a memo in which Nova President Nozomu Sahashi stated there was need to stop pushing sales despite difficulties meeting student reservations due to teachers shortages.
Students, ex-staff critical of Nova
Consumer centers nationwide have received more than 1,000 complaints and queries regarding Nova annuallyand 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 2007.
NOVA ordered to repay English tuition fees to man who cancelled contract
Under Nova's system, students buy points in advance to pay for their lessons. The larger number of points they buy in bulk, the smaller the per-class fees. The case taken to the top court involved a former student who had purchased 600 points at a rate of 1,200 yen per lesson. The student canceled the contract after using up 386 points, but Nova offered a refund based on a calculation that 300 points were bought. That meant it cost 1,750 yen per lesson.LDP lawmaker vouched for Nova The Asahi Shimbun June 13, 2007. Retrieved June 13, 2007 Nova said the value of the used points should be calculated as having been bought in smaller lots.Ministry to order Nova to halt part of its operations The Asahi Shimbun June 13, 2007. Retrieved June 13, 2007
The Asahi Shimbun cites an example of a contract for 100 lessons, which would cost 230,000 yen in advance, for a per-lesson fee of 2,300 yen. A contract for 600 lessons would require an advance payment of 720,000 yen, or 1,200 yen per class. But if a person with a contract for 600 lessons cancels after taking only 100 classes, Nova applies the fee of 2,300 yen per lesson, and the student receives a refund of 490,000 yen. Such students say the contract for 1,200 yen per lesson should apply in these cases, which would mean a refund of 600,000 yen.
Supreme Court Appeal Rejected
On April 4th 2007, NOVA's appeal on two lower court rulings was rejected by the Japanese Supreme Court which described Nova's refund policy as invalid and in violation of specified commercial transaction law.[17][18] The ruling prompted the Ministry of Trade, Economy and Industry to revise the regulations for the specified commercial transaction law to prevent a recurrence of trouble.
Ministry to clear up rules on refunds
On June 13, 2007, LDP Lower House member Yasuhide Nakayama has acknowledged he was accompanied by Nova's president, Nozomu Sahashi, and vouched for the company during a meeting with Osaka Mayor Junichi Seki on the morning of May 22, 2006, during the court dispute over the company's refund system. Nakayama, who was elected from an Osaka constituency (of which Sahashi is a member of the lawmaker's support organization) recalled saying at the time that it was "not right by social norms that Nova's refund rule is unacceptable." and explained "It is a politician's job to help out when a supporter is in trouble,". Nakayama stated it was not his intention to exert pressure and Mayor Seki said he did not think the judgment of city officials was swayed by the lawmaker's visit.
Industry minister Akira Amari also admitted on June 22 that he met with a Yasuhide Nakayama earlier that year in February shortly after his ministry began investigating the school. Nakayama sought a meeting with Amari to express concern that the ministry might discipline the school over its fee discount system. Amari stated that Nakayama did not try to sway him from punitive action.
TOKYO: Amari admits visit over Nova inquiry
Business Restrictions Imposed
On June 13th, 2007, the Ministry of Economy, Trade and Industry imposed a six-month ban on Nova from soliciting, accepting or finalizing new contracts for long-term courses that last for over a year or 70 hours.
Rule-breaking Nova hit with suspension order
Nova barred from making long contracts
The ban was imposed because of issues regarding refunds for the cancellation of contracts.
Nova handed suspension order over tuition fee practices
The six months suspension order will not affect those who have already signed up for lessons, meaning that Nova's students can continue taking classes.
The ministry also said that Nova failed to comply with a "cooling-off" system provided for in the specified commercial transaction law. Under this system, consumers can cancel a contract without conditions if the cancellation is made within eight days from when the contract was signed. At Nova, potential students first register their name, address and other data before finalizing their contracts. An official application to the school is made several days later, after the details of the contract are decided upon. Nova told students who wanted to quit were told they could not use the cooling-off system, claiming that the day students registered their data was the first day of the contract.. Ministry officials were quoted as saying that the actions of Nova were "organized and malicious". The ministry has received over 7,000 complaints and inquiries since 1996.
On June 15, The Ministry of Health, Labor and Welfare said that Nova's English language courses will no longer qualify for government subsidies for those engaged in educational training authorized by the welfare ministry to improve the abilities of the unemployed and other people. In 1999, Nova's 32 courses were approved for the subsidies program. In fiscal 2006, about 4,700 people received a total of 560 million yen in subsidies under the program. Since 1999, around 71,000 Nova students have received a total of about 16.1 billion yen in such subsidies.Nova eyes new share issuance to dispel market concerns after gov't terminates subsidies Kyodo News via Japan Today (June 16, 2007) Retrieved June 16, 2007.
Nova submitted an business improvement plan to the Tokyo government in late June, 2007 as required by the METI conditions. The plan was rejected on the basis that it was lacking in concrete details and the planned improvement measures were deemed 'insufficient'. Nova was requested to submit an additional report.
"Nova Improvement plan lacks details"
Events following restrictions
In an interview in the The Daily Yomiuri on June 16, 2007, Sahashi said he was considering offers of capital and business alliances from several companies in various industries, including retail firms, to deal with an expected drop in sales and to restore trust in the company and possibly selling off properties and real estate in Osaka estimated to be worth several billion yen.Nova boss weighs assistance options The Daily Yomiuri (June 16, 2007) Retrieved June 16, 2007. A capital alliance would serve to improve its creditworthiness and secure operating expenses.
In July of 2007, Nova CEO Nozomu Sahashi met with Hideo Sawada, chairman of H.I.S. travel agency, to discuss an financial assistance as well as a business tie-up[19] but the meeting did not conclude with a decision.[20]
H.I.S. mulls assisting scandal-hit Nova's turnaround efforts
Although Sahashi had rejected the possibility of a business affiliation with another English school, Benesse Corporation (parent company of Berlitz Language Schools and provider of home nursing services) announced that it would not be undertaking any business relationship with Nova.[21] and saw no synergy between the two companies.[22]
Sahashi indicated the company may issue new shares to strengthen its capital and that Nova management "must take responsibility," stating the company will set up an internal inquiry and management reform committee to investigate the scandal, consider disciplinary measures of its executives including himself, and examine how best to avoid scandals in the future.
Nova president refuses to resign
Sahashi also said that the company did not need assistance from financial orgnizations During its annual stockholder meeting in June, Nova President Nozomu Sahashi apologized for causing the disciplinary action by the government and told the shareholders, "We'd like to regain your trust as soon as possible". Forty six shareholders attended and one shareholder who had apparently lost faith in the current Nova management, called on them to resign.[23] In response to a call for his resignation from Nova shareholders, Sahashi refused stating "If I resign, the company will collapse,". On August 14, 2007 Nova announced it would issue 170,000 new shares to be sold on August 30.
Stock Issue Announcement
Lindsay Ann Hawker murder
Main articles: Lindsay Hawker
On March 27, 2007, the body of Lindsay Ann Hawker, a 22-year-old Nova teacher from Brandon near Coventry, was found in a sand-filled bathtub on the balcony of an apartment in Ichikawa, Chiba. Police said the suspect was 28-year-old Tatsuya Ichihashi, a student of Hawker's. Police went to Ichihashi's apartment, but the suspect ran away and remains at large.[24]
See also
★ Language education
★ Eikaiwa
★ GEOS
★ AEON
★ ECC
★ GABA
References
1. Consolidated Financials
2.
Nova Corporate profile
3. Media Critical of NOVA in Wake of Public Stock Offering
4. "Union, management speak two tongues" The Japan Times (Jan 31, 1997)
5. "Nova is accused of lying in stock-listing prospectus" The Japan Times, Dec 19, 1996
6. "Nova to refund 3.8 million yen for students' unused lessons" The Japan Times June 13, 1997. Reprinted with permission by Nova Union. Retrieved February 11, 2007
7. "Nova teachers pan drug test: staffers urge school to end 'illegal labor practices'"
The Japan Times 1994 Reprinted with permission by Nova Union. Retrieved February 11, 2007
8. Letter of Recommendation Osaka Bar Association. Retrieved March 20, 2007
9. "Our Accomplishments" Nova Union of Teachers. Retrieved February 11, 2007
10. Nova's ban on dating violates rights: teachers The Japan Times (Saturday, March 1, 2003) retrieved 2007-07-01
11. Nova, let teachers date students: bar The Japan Times (Thursday, Feb. 26, 2004). retrieved 2007-07-01
12. No sex please, you're teachers: Nova teachers unhappy with rules, reports The Japan Times (June 1, 2004). retrieved 2007-03-22
13. Nova to pay teacher over demotion The Japan Times(Sunday, Dec. 11, 2005) retrieved 2007-07-01
14. "Nova raided after complaints over missing tuition fees" Mainichi Daily News February 16, 2007. Retrieved February 21, 2007
15. "Nova probed over refunds, deception" The Japan Times February 17, 2007. Retrieved February 21, 2007
16. "Students at 'McEnglish' schools taste the spit in the burger" Weekly Playboy March 12, 2007. Retrieved June 5, 2007
17. "Top court: Nova's refund tactic illegal" The Asahi Shimbun April 4, 2007. Retrieved June 7, 2007
18. "Nova's policy on cancellations illegal: top court" The Japan Times April 4, 2007. Retrieved June 7, 2007
19. Travel agency H.I.S. eyes alliance with struggling Nova The Asahi Shimbun (July 3, 2007) Retrieved July 9, 2007
20. H.I.S. may come to Nova's aid The Japan Times (July 3, 2007) Retrieved July 9, 2007
21. Benesse considers support for Nova Nikkan Sports (July 12th, 20007) Retrieved Aug 12, 2007
22. Benesse Chairman: No synergy with Nova Nikkei Business Daily (July 12th, 20007) Retrieved Aug 12, 2007
23. Shareholders meetings reach peak / Nova, Katokichi, Kajima among scandal-hit firms grilled by investors The Yomiuri Shimbun (Jun. 29, 2007) Retrieved Aug 12, 2007
24. Briton's body found in Japan bathBBC News March 27, 2007. Retrieved March 27, 2007
External links
★ Official website (in Japanese)
★ Official Company Profile website (in English)
★ Nova Teacher's Union Movement website (in English)
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