Red Dwarf (Super Nova cont’d)

Just a brief update on the Nova story from two or so weeks ago: The company has filed for protection against its creditors here in Japan, confirming what everyone feared: Nova is on its very last legs. Not last on the list of creditors are the some 4,500 foreign teachers here and all of the Japanese staff (some of which haven’t been paid since JULY!).

I walked past the Nova in my little city here today to find the shutters down and hastily pasted signs on them saying that the branch had closed and a number to call: a free phone number, so lord knows how many hours people will have to wait, or rather be made to wait to make their claims for refunds. Of course if customers with outstanding credit with Nova are counted among the creditors from whom Nova is to be protected, then we really are in trouble. Not only Nova, but the whole business of foreigners teaching in Japan is going to be hit with a lack of confidence, as well as a surplus of teachers and falling wages.

**UPDATE** According to the Times (nice to know I’m so on the button eh? – bringing you the news after it hits Britain!, and then courtesy of my brother in France) but not only my local Nova has closed, but EVERY Nova in Japan. That is  a lot ladies and gents. But then, so is the 210 million quid that the company owes.

(Super) NOVA

English teaching in Japan has always been big business. Owing to the downright awful standard of English education in the school system, most Japanese wishing to master the language turn to the private sector. One of the largest private providers of English education is a company called Nova, which employs around 4,500 foreign staff in Japan.Nova’s sales techniques have always been quite forceful. Having worked their myself, it was not unusual to see sales staff corralling a new customer in a sales booth for hours on end, literally wearing down their resolve until the contract was signed. Nova sells its lessons as packages of points: A lesson cost a set number of points, and the more points you bought, the cheaper each individual lesson became. For example, 30 points might cost 20 000 yen (about 100 British Pounds) but 60 points might cost 35 000 yen. Thus customers were pressed to buy larger and larger amounts of points on the basis that the more they spent, the better value they received.

Customers paid everything up front (or financed via Nova’s credit options), and in such amounts that it didn’t take a genius to realise that customers were being sold amounts of points that wiould take years to use. In the meantime their needs to learn English might change or a whole host of personal circumstances could intercede and require that they terminated their contract with the company.

However, small print in the contracts, unmentioned by the sales staff in the sales process, stated that on cancelling a contract the customer was to forfeit a great number of their outstanding points. For example, cancelling a contract with 200 points remaining might only yield a refund to the monetary value of 125 of those points – a difference of tens of thousands of yen. Very sharp practice indeed.

Eventually METI, the Ministry of Economy, Trade and Industry, took Nova to court over this practice, and it was proven to be illegal. A rare victory for the customer in a country where consumer rights rarely make news.

METI’s penalty to NOVA was a ban on recruiting new students on long term contracts for a period of six months. Since NOVA bascially worked as a Ponzi scheme, needing to recruit more and more students each month to maintain its cashflow and expansion plans, they basically lost all of their revenue and liquid assets over night. While the consumer has celebrated a victory, the staff of NOVA, both foreign and Japanese are feeling the pinch: salaries for most NOVA staff, due on the 15th, have not been paid at the time of this posting. For foreign teachers, abroad without money, without job security or even a means to get home the situation must be very alarming indeed. Nova doesn’t pay unemployment insurance or national health insurance for its members, preferring its own in-house schemes, so some teachers are really going to be in trouble.

Even for those of us lucky enough not to be directly affected, it will still have serious repurcussions: 4,500 teachers looking for work at the same time in an already crowded market is going to push up competition for jobs, push down wages and increase job insecurity. For schools other than NOVA, the level of distrust generated towards the industry by these events has yet to be measured. There could be some stormy times ahead for all of us working in English education in this country.

And yet, NOVA is still recruiting teachers at it’s London office as we speak.