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Thursday, Nov. 8, 2007
Picking up the pieces at Nova
The court-appointed trustees of Nova Corp. have given up on a rehabilitation plan and chosen a Nagoya-based firm to take over part of the language-school chain's business.
Following are questions and answers explaining what's in store for Nova workers and students as the firm awaits liquidation:
What exactly is the situation at Nova Corp?
Now that the trustees have given up on rehabilitating the failed language-school chain under the Corporate Rehabilitation Law, Nagoya-based G.education Co. has been chosen to take over some of its business.
G.education, which runs cram and English schools, will initially take over 30 of about 670 Nova branches, with plans to resume lessons soon, the firm said, without saying where the 30 branches are located.
The company "will make every effort" to eventually take over 200 Nova schools in total, but no specific timetable or other details of the takeover plan has been decided yet, including which schools are to be transferred to G.education.
What will happen to the contracts of employees at Nova and other group companies?
All the employees will be dismissed, but G.education said in a written statement that it will "basically hire" all the Nova teachers and employees who wish to work at G.education.
Some observers, however, have questioned whether the company can hire the more than 4,000 non-Japanese Nova teachers, and also pointed out that the firm is not legally obliged to do so.
"This is not going to secure jobs necessarily," said Louis Carlet, deputy general secretary of the National Union of General Workers Tokyo Nambu, which has a Nova branch union.
Carlet also argued that new contracts with G.education should be open-ended, saying many Nova teachers had to put up with unstable working conditions stemming from one-year contracts.
Will Nova workers, many of whom haven't been paid for more than two months, start to see some of their money?
The trustees say Nova will pay the wages by tapping a public safety net provided by the Japan Labor Health and Welfare Organization, a state-backed body that guarantees 80 percent of unpaid wages in cases of corporate bankruptcy. However, limits are placed on the benefits based on a worker's age.
The organization said it usually disburses the money within a month after an application is filed, although the Nova labor union claims it will take more than half a year before workers can actually receive benefits from the organization.
What about the unused lesson tickets still held by Nova students?
All the tickets will probably be deemed invalid. The trustees say there are "no prospects of refunds" since the liability is Nova Corp.'s.
G.education said it will offer Nova students equivalent lessons if they pay an additional 25 percent fee on top of what they have already paid.