Gaba Corporation

Meaning of the company name

The company name "GABA" is an acronym for "girls, be ambitious; boys, be audacious!". According to a speech given by co-founder Hideki Yoshino, he chose this name because he had a keen interest in physical fitness, and named it after Gamma-Aminobutyric acid, an amino acid used by bodybuilders. Many other large Japanese English conversation schools at the time also had four letter names, such as Nova, GEOS, and Aeon, and giving the school a four letter name would help it fit in. It seems likely the acronym was created second, and seems to originate from William Smith Clark, a nineteenth-century American academic who taught at Sapporo Agricultural College, now Hokkaido University. When leaving Japan, he said to his students "Boys, be ambitious!" This is now the motto of Hokkaido University.

Founding and early history

Gaba was founded in 1995 by Karen and Hideki Yoshino. It was originally a matching service for students and teachers, and lessons were conducted in various locations, such as coffee shops or at teachers' homes. From 2000, the company established schools, referred to as "Learning Studios" where students, referred to as clients, and teachers, referred to as instructors, met, and lessons were conducted.

In March 2004, Chutatsu Aono (青野 仲達) became the president and CEO.

In July 2004, Gaba was purchased by NIF Capital Management, a wholly owned subsidiary of NIF Ventures Co Ltd, in turn a subsidiary of Daiwa Securities. According to the Nikkei Shimbun, the price was several billion yen.

It went public in December 2006, and had a valuation of 11.39 billion yen. The majority stockholder was Daiwa Securities, which owned 60.38% of Gaba's stock.

Due to declining business performance Gaba underwent a major transformation at the end of 2008 and the beginning of 2009. In October 2008, Kenji Kamiyama joined the company as COO and Senior Managing Executive Officer. In March 2009 he replaced Chutatsu Aono as President and CEO, and the position of COO was abolished. Kamiyama's focus was to reduce "wasteful expenditure" and to lead a rejuvenation of the profit and loss and balance sheets. During Aono's presidency Gaba expanded its number of Learning Studios, but also maintained its headquarters in the expensive GT Tower in Nakameguro, launched the ill-fated Global Stars initiative, and made decisions such as holding its company sports day in May 2007 at Tokyo Dome.

In January 2011, Gaba reported having over 18,000 students in September 2010.

On August 5, 2011, it was announced that Nichii Gakkan would purchase Gaba and make it a wholly owned subsidiary. This takeover was effective as of September 29, 2011.

Following Gaba's sale to Nichii Gakkan, effective December 5, 2011 Kenji Kamiyama stepped down as President, Chief Executive Officer and Representative Director of Gaba, and was replaced by Bruce Anderson, and Takayuki Masuda became the Vice-President. On March 29, 2012 Masuda succeeded Anderson as president.

In November 2013 it was reported that Gaba had 21,300 students.

President Takayuki Masuda was replaced by Masatoshi Saito on April 1, 2015.

Stock Price as a publicly listed company

Gaba went public on December 5, 2006, and was listed as TYO: 2133 on the Tokyo Stock Exchange. Its initial stock price opened at 255,000 yen per share, but the prices gradually fell from this level to the point where on March 4, 2009, the stock price was closing at 13,900 yen. After that the stock price gradually rose, reaching 162,700 on March 7, 2011. After the Tohoku earthquake it fell, at its lowest point closing at 82,100 on March 15. Subsequently it rebounded, and after the August 5, 2011 announcement that Nichii Gakkan had launched a take over bid for Gaba paying 200,000 yen per share, the stock price rose to 199,000 on August 15, 2011. The tender offer opened August 8 and expired September 21. As of September 29, 2011 Nichii Gakkan owned 98.88% of Gaba's shares and Daiwa Securities held no voting rights in Gaba.

On November 30, 2011, Gaba corporation's stock was removed from the Tokyo Stock Exchange and it became a wholly owned subsidiary of Nichii Gakkan.

Nichii Gakkan purchase of Gaba

In 2011 Nichii Gakkan purchased Gaba from Daiwa Securities and other shareholders. The acquisition price was 10,100,000,000 yen. The goodwill was 8,000,000,000 and the amortization period was 11 years, with the debt to be paid off at approximately 800,000,000 per year.

The finance for the deal was provided by loans from Tokyo-Mitsubishi UFJ bank.

Gaba become a wholly owned subsidiary by a share exchange on December 5, 2011.

Nichii Gakkan expected Gaba to begin contributing to business results from the second half of fiscal year 2012, with net sales of 4,300,000,000 and an operating income of 400,000,000.

Learning Studio history

After being founded in Tokyo in 1995, Gaba has consistently expanded, opening at least one Learning Studio every year from 2000 onwards. Generally the Learning Studios are named after the area they are located in, although some are named after the station they are closest to (if this differs from the area name). The first Learning Studios were opened in March 2000 with the Ikebukuro, Shibuya, Jiyugaoka and Yokohama schools. A year later, in March 2001 it opened the Shinjuku East and Ginza LSs. These were quickly followed in April 2001 with the Shinjuku West LS. In October 2001 the Kichijoji LS was opened, followed by the Ginza I-chome LS in November. In June 2002 the two Shinjuku LSs were merged.

The following year, 2003, saw a substantial increase in the number of Learning Studios. In January the Tameike-Sanno and Shimbashi LSs were established. In February came Tokyo LS, March saw the opening of Shimokitazawa LS, and in April, Omotesando Learning Studio opened. Next came Futako Tamagawa LS in May, and Seijo in June. In July, the Roppongi Learning Studio opened, and in October the Akasaka Mitsuke and Tamachi Learning Studios opened.

The next year, 2004, saw a continued expansion. In January, Fujisawa LS opened, in February, Aobadai LS opened, in April, Sangenjaya Learning Studio opened, and in May, the Meguro Learning Studio opened. In June, Shin-Yurigaoka LS opened, and in October, Shinagawa LS opened.

Expansion continued in 2005, with Gaba opening its first Kansai LS in Umeda, Osaka in January. In February, the Chiba LS opened, followed by the Shinsaibashi and Sakae LSs in April. In April, the Ikebukuro LS relocated, as did the Yokohama LS in December.

On July 13, 2005, Gaba opened up what the company called a 'next generation' learning studio designed specifically for women in Ginza. The new location provided VIP "executive booths" that afforded complete privacy for the teacher and the student. English conversation schools often gear marketing campaigns towards women, often using strategies the focus on couplings between Japan and the other, represented and embodied by professional/romantic/sexual pairings between western instructors and female Japanese students. Gaba's Ginza LS was later moved to Yurakucho, and it no longer caters to an exclusively female clientele.

2006 saw continued expansion outside of Tokyo, with Chayamachi LS opening in Osaka in April and Omiya LS in Saitama prefecture in June. Shimokitazawa LS relocated in June, and Omotesando LS did so in August. A new Shinjuku LS was opened in September and in October Gaba opened another Kansai school, this time in Kobe. The Roppongi LS closed in May 2006 due to "environmental reasons".

2007 saw LSs opened in Nagoya in January, Hachioji in March, Kita-Senju in April, the Futakotamagawa LS relocated in April, Ebisu LS opened in August, Tachikawa LS opened in October and Kyoto LS opened in November.

In January 2008, the Shimbashi-Shiodome Learning Studio relocated, and in February, the Kawasaki LS opened, and a "Learning Field" for children's lessons opened at Hiroo LS. In April, the Shibuya LS relocated, as did Kitasenju LS in June.

The Nagoya LS closed in March 2009, and its operations were consolidated into the Sakae studio. In April 2009, the Otemachi LS was opened. Meguro Learning Studio was relocated in May 2009. and in October the Akabane LS opened. On October 31, the Ikebukuro annex closed.

Shinyurigaoka LS closed on 29 March 2010, it relocated to the new Machida LS, which opened on 1 April 2010. Sangenjaya LS closed on May 31, 2010. The Tamachi LS was closed on September 30, 2010, and merged into the Shinagawa LS from October 1, 2010.

Gaba opened a new Nagoya LS on January 5, 2011. On February 26, 2011, Shinsaibashi LS in Osaka relocated to the Namba district, and Namba LS opened on March 1, 2011. On May 1, 2011 Gaba opened Kashiwa LS in Chiba. It was originally to have been opened on April 1, but that was delayed by the effects of the 2011 Tōhoku earthquake and tsunami. The Jiyugaoka LS relocated on October 1, 2011.

The Ikebukuro LS relocated in January 2012. The Omiya LS relocated on April 17, 2012. Ginza LS relocated on May 7, 2012, becoming the "Ginza Yurakucho" LS. The Kawasaki LS relocated on September 1, 2012. Gaba opened an LS in Akihabara on October 1, 2012.

On March 1, 2013 the company opened the Tennoji Learning Studio in Osaka.

On March 30, 2013 Gaba relocated Machida LS.

On January 6, 2014, Gaba relocated the Ginzayurakucho LS. On April 1, 2014 Gaba opened the Shinjuku West LS.

On September 1, 2014 Gaba opened the Musashi Kosugi LS in Kanagawa Prefecture. Also on September 1, 2014 the Akasaka-Tameike LS moved and became the Akasaka LS.

Tokyo LS relocated on November 1, 2014.

Gaba opened Roppongi LS on April 4, 2015.

Gaba opened Kinshicho LS on October 2, 2015. It became Gaba's 42nd LS.

Tachikawa LS relocated on March 5, 2016.

On October 7, 2016 Gaba opened its 43rd LS in Fukuoka city in Fukuoka Prefecture in Kyushu.

On November 3, 2016 Shinjuku East LS relocated.

On December 1, 2016 the Ichikawa Learning Studio will open in Chiba Prefecture.

Current Learning Studios

As of November 2016 Gaba has forty-three Learning Studios across Japan. The vast majority of them are located in the Kanto region (33), with the remaining LSs being in Chubu (2), Kansai (6) and Kyushu (1). In December 2016 Ichikawa LS will open, becoming the 44th Learning Studio, and the third in Chiba Prefecture.

Kanto region: Akasaka, Akabane, Akihabara, Ikebukuro, Ebisu, Otemachi, Omotesando, Kitasenju, Kichijoji, Ginza-Yurakucho, Shinagawa, Shibuya, Shimokitazawa, Jiyugaoka, Shinjuku West, Shinjuku East, Shinbashi-Shiodome, Seijo, Tachikawa, Tokyo, Hachioji, Futakotamagawa, Machida Meguro Roppongi and Kinshicho LSs (Tokyo prefecture).

The Aobadai, Fujisawa, Kawasaki, Musashi Kosugi and Yokohama LSs (Kanagawa prefecture).

Chiba, Ichikawa and Kashiwa LSs (Chiba prefecture).

Omiya LS (Saitama prefecture).

Chubu region: Nagoya and Sakae LSs (in Nagoya, Aichi prefecture).

Kansai region: Kobe LS (Hyogo prefecture) and Kyoto LS (Kyoto prefecture). Namba, Chayamachi, Umeda and Tennoji LSs (all in Osaka prefecture).

Kyushu region: Fukuoka

Headquarters

Until November 2009, Gaba had two separate buildings, the "Support Centre" in the GT Tower in Nakameguro, effectively the headquarters of the company. It also had a "Quality Centre", where training was conducted, located in Ebisu. From November 16, 2009 the Support Centre moved to "Round Cross Moto-Yoyogi" building (now known as "Glass City") in Moto-yoyogi in Shibuya-ku, and on November 24 the "Quality Centre" did so too. After the closure of the Ikebukuro Annex, Gaba's Japanese classes, referred to as "Jaba", relocated there also. The Support Centre moved to the fourth floor, while the Quality Centre and Jaba classes moved to the eighth floor.

On August 11, 2014 Gaba's headquarters moved to the "Shinjuku Front Tower" in Kita-Shinjuku.

Global Stars and Gaba Kids

In early 2008 Global Stars, a section of the business built around teaching one-on-one lessons to children was launched. There were designated "Learning Fields" established in Hiroo and Seijo, as well as "Learning Field-enabled Learning Studios" in Ebisu and Tachikawa. There was not enough demand for Global Stars, and the Learning Fields in Hiroo and Seijo were closed in March 2009. Gaba Global Stars was merged into a number of regular leaning studios. From 1 September 2009, Gaba Global Stars was officially re-branded Gaba Kids. Gaba Kids is offered in a number of Learning Studios in the Kanto area - including Aobadai, Hachioji, Chiba, Futako-Tamagawa and Shinbashi-Shiodome LSs.

and Gaba.

In November 2015 Gaba launched "and Gaba.", a free conversation space in Shibuya, Tokyo.

Internal Structure

Gaba has a number of different departments responsible for dealing with instructors:

Textbooks

In February 2002, Gaba launched the Snapshots series of textbooks. The seven Snapshots textbooks were designed to teach grammar points by combining a story about a mixed group of young Japanese and English-speaking characters interacting all over the world. Gaba later created online drills for instructors to use with the textbooks. In June 2003, a second line of textbooks, Planet, was created. The Planet textbooks were designed to teach travel English, with more focus on situations than specific grammar. In July 2004, the Career textbooks were launched. As with the Planet books, the three Career books were focused more on situations, in this case business situations, than specific grammar.

Gaba also used a variety of non-Gaba textbooks for both daily conversation and business English lessons.

From April 2008, the Gaba level system, which had consisted of 13 levels, was simplified to a 10 level system, and new textbooks were introduced. In April 2008 the Snapshots New books began to be released. They were much less grammar-focused than the previous Snapshots books. Each level has twenty lessons, with the tenth and twentieth lessons being review lessons. The other eighteen lessons have five sections. First, a picture on the front page that instructors can ask the client to describe. Second, a dialogue section, then three practice sections where the target language for the lesson is tried out. Finally, there is an application section, essentially a roleplay.

From October 2008, the Business Advantage textbooks were rolled out. They have the same construction as Snapshots New. The only exception is that from level seven and up, the picture at the start of each lesson is replaced by a newspaper article that the client and instructor discuss at the beginning of the lesson.

The new curriculum of Snapshots New and Business Advantage have replaced the older Snapshots series, the latter which is no longer being sold. However, the Planet and Career Gaba texts are still being sold. All non-Gaba textbooks have been phased out.

In February 2011, Gaba introduced the Travel series. There will be textbooks for level 1 to 4, replacing the Planet textbooks which were used previously.

In September 2013 Gaba introduced the "Starter" textbooks, designed for students who are at a very low level of English.

From June 2014 Gaba introduced the "Snapshot Teens" textbooks, designed for teenage students at a low level of English.

Jaba Japanese lessons

In 2008, Gaba started the Jaba program to teach Japanese lessons. At first they were held in the Tokyo LS, then in the Ikebukuro Annex, and from November 2009, they relocated to the 8th floor of the new headquarters in Moto-Yoyogi. Lessons are now also taught at various Gaba Learning Studios. Jaba formerly offered group lessons, but now only offers private lessons. When Gaba's headquarters relocated to Shinjuku in August 2014, Jaba did also. Outside of Kanto, lessons are also taught in Kansai and Chubu.

Lesson purchase system

Gaba clients purchase blocks of lessons when they join the company and when they renew their contract. The company then places these funds into an escrow account, and allocates "lesson points" to the clients. Clients spend these lesson points, and as this occurs the funds are transferred from the escrow account to Gaba's regular accounts.

Lesson cost

The cost to students for Gaba lessons is between 5000-7000 yen per lesson, depending on the course they purchase.

According to an interview with Reuters, Gaba students pay about 50,000 yen per month, higher than the 36,500 average allowance that company employees receive from their employers for such training.

Staff employment system

Gaba employs Japanese staff referred to as "counselors" in the Learning Studios. Some of these are employed on a part-time basis. They receive unemployment insurance and transportation pay but no other benefits. Other counselors are employed on a full-time basis and receive full employment benefits. Most other Gaba staff are also employed on a full-time basis with the standard benefits of employment.

From 2013 it began a four-times yearly recruitment schedule for full-time staff such as Instructor Support Leaders, with recruitment taking place in January, April, July, and October.

Instructor employment system

Gaba instructors are not currently employees, but rather are 'itaku', effectively independent contractors. Instructors have flexibility in choosing their schedule, although in practice the morning, evening, and weekend lessons are the ones which tend to book, as working Japanese people are more likely to be able to take lessons during those times. As a result, many instructors tend to focus their schedules on those times. Instructors submit the lessons they are available for via Gaba's intranet. Gaba only pays instructors for lessons that are booked and not canceled.

Gaba clients can cancel their lessons until 6pm the previous day. If they cancel it after that the instructor is still paid for the lesson, however, Gaba reopens the lesson as an "R-slot" ("R" stands for "related activities), and it can be rebooked. If this occurs the instructor is only paid once; however, Gaba receives two lesson payments. However, if trial lessons ('FMs') cancel, Gaba does not receive any payment for R slots, but instructors are still paid. This is also true if lessons are moved to other instructors in the case of sickness. For example, if instructor A calls in sick, his/her lessons may be moved to instructor B. However, if the client chooses to cancel the lesson because he/she does not want to study with instructor B, then instructor B gets a paid R slot, but Gaba does not get paid for the slot. If students simply do not come for a lesson they book, it is referred to as a "no-show", and instructors are still paid.

If an R lesson does not rebook, instructors are expected to do one of a various number of "R" activities, such as sending postcards, updating lesson records, checking homework, and so on. After this, instructors are expected to sign the "R Activity Log", or RAL, as stated in article 6 of the Gaba contract for instructors. If they do not, Gaba will not pay them for the lesson slot. If a client books a lesson for the time of the R-slot without specifying which instructor they would like (known as a red lesson, for the color it appears on the schedule), then the booking system will automatically allocate it to the instructor with an R slot. This is regardless of whether there are any other instructors with open slots to be booked. As a consequence this policy means Gaba can keep its costs lower, but instructors lose lessons they would otherwise receive.

Gaba instructors can also receive an incentive for teaching a certain amount of lessons each month. There are three bonus levels: level A is for teaching 80-119 lessons per month, level B is for teaching 120-119 lessons per month, and level C is for teaching 150 or more lessons per month. Instructors may also receive incentives for referring clients to Gaba. Instructors who conduct "First Meetings", lessons with prospective clients, can also receive a bonus if the client joins Gaba. When the incentive is paid depends on when the client joins, not when the FM was conducted. So, for example, if an FM is held late in the month but the client does not join until the following month, the incentive will be part of the paycheck for the following month. Also, instructors do not receive an incentive if the FM is done for a "Guaranteed" FM client. Guaranteed clients are generally supported by their company. FM instructors are also eligible for incentives based on cash collection.

As Gaba instructors work under an entrusted contract, many benefits that are provided to salaried workers in Japan are not available to them. For example, they do not receive any travel allowance, sick leave, or holiday pay, and Gaba does not pay for part of their pension, health insurance, or unemployment insurance, as Japanese companies do for full-time workers. Gaba requires that any instructors who wish to be sponsored for a work visa by Gaba comply with Japanese law and be enrolled in National Health Insurance which must be 100% paid for by the instructor. Furthermore, Gaba requires that these instructors have paid their taxes and not broken Japanese law during their stay in Japan.

While instructors may receive the monthly bonuses (generally not available to full-time employees) as described above, they do not receive the June and December bonuses that salaried employees at many Japanese companies are eligible for.

As itaku workers, Gaba instructors must bill Gaba for services rendered every month. There is an online invoice that instructors must approve every month. The instructors electronically sign in by clicking a box and sending it to Gaba. They are also responsible for filing their own taxes, in contrast to salaried workers, whose taxes are filed by their companies.

The instructors in the Jaba program of Japanese lessons for instructors are employed under itaku contracts in the same way as the regular Gaba instructors, and are paid 1,500 yen per hour. They lack all the same benefits that regular Gaba instructors do, and they also lack any kind of belting system to raise their pay.

Taxation system

A 10.21% withholding tax is taken from instructors' pay, and the company then pays an 8% consumption tax to instructors. Instructors can keep this because for tax purposes they are considered to be a business earning under ¥10 million per year, and can therefore retain the consumption tax that would normally go to the government.

As they lack health and unemployment insurance and pensions, Gaba instructors pay no payroll taxes, which normally take a significant chunk out of Japanese salaried workers' paychecks. As a result, Gaba instructors see very little tax taken out of their monthly paychecks. Furthermore, despite the low amount of national income tax withheld from their pay, itaku status generally results in instructors getting a tax refund from the Japanese government when they file their taxes. They may also write off work-related expenses, especially travel expenses, that many salaried workers would not be able to claim. Nevertheless, they still have to pay city taxes.

Incentives

As noted above, while Gaba instructors are not entitled to any seasonal or yearly bonuses that are commonly paid at Japanese companies, but they do receive incentives based on the number of lessons taught.

TNT Incentive

Until May 2013 but those who taught over 100 lessons in a month were eligible for a "Total Number Taught" monthly incentive based on the total amount of lessons taught. The incentive was paid the following month. For ever lesson taught across Gaba there was 25 yen added to a pool, which was used to fund the incentive. There were three categories, and as the budget allotted was limited to around 2.5 million yen companywide per month the amounts paid for each vary from month to month, but are largely consistent over time. If instructors receive two or more negative evaluations Gaba would not pay them the TNT Incentive for that month even if they met the lesson number requirements.

PNT Incentive

On March 19, 2013 Gaba announced that it would be changing the incentive system from May 2013, raising the amount allocated to the pool from 25 yen to 35 yen, raising the overall amount allocated to the incentive. However, the incentive is only paid for the total number of peak lessons taught, not overall lessons. Unlike the previous TNT system, non-peak lessons, which are lessons taught between 9:15am and 4:45pm on regular weekdays do not count towards the incentive. As with the TNT Incentive, if instructors receive two or more negative evaluations in a month they do not receive the incentive. The first PNT payment was made on June 25, 2013.

The categories for the PNT are:

F-peak Incentive

After negotiations with the General Union, on March 19, 2013 Gaba also announced that from May 2013 an additional 200 yen would be paid per morning peak lesson (7:00am / 7:45am / 8:30am). This incentive will not be linked to negative evaluations. It currently applies to the instructors of 20 of Gaba's 39 Learning Studios. The Learning Studios in Akabane, Ebisu, Shimokitazawa, Seijo, Tachikawa, Hachioji, Machida, Meguro, Aobadai, Fujisawa, Chiba, Kashiwa, Omiya, Kobe, Kyoto, Namba, Chayamachi and Tennoji are not open for those morning lessons. Gaba and the General Union signed a collective agreement over the pay increase.

Belting system

Instructors are given what Gaba refers to as a "belt", which determines their per lesson pay rate. The base belt is A, which pays 1,500 yen per lesson. Until April 2008, the rate was 1,400 yen per lesson. Instructors wishing to earn more than the base rate can earn that rate by meeting a set of optional requirements and performing well enough within their Learning Studio to earn a recommendation. Instructors ranked above A are paid a higher rate for 'peak-time lessons'. Peak lessons are morning and evening lessons during the week, and any time during weekends or public holidays. The payment for non peak-time lessons does not increase until the D belts.

The higher belts were introduced in 2005, and since then the percentage of belted instructors has gradually increased. However, as of April 2015, 578 out of 1,089 Gaba instructors (53.07%) are still only being paid the 1,500 yen base rate for peak lessons. The rate of belting up slowed considerably following the restructuring in late 2008, and in addition, the lesson evaluation average (LEA) required for some belts were raised in 2009, and the averages for all belts were raised again in 2011. Gaba raised the minimum LEA requirement because the entire company saw a sharp rise in LEA from the time the original standards were implemented. In theory, the increased LEA requirements mean that it is harder to attain belts and easier to lose them. However, the minimum LEA requirements for various belting levels tend to be far lower than the average LEA of instructors in that belting level. For example, the average company LEA is about 4.65, but the current requirement for the D belts (the highest possible levels) are only slightly higher (4.7). The belts range from A to A2, B1, B2, C1, C2, D1, and D2.

The details are as follows:

Instructors are belted after undergoing certification and meeting certain requirements. The requirements to achieve and maintain belt levels are as follows:

(* The A2 Belt came into existence in May 2010.)

Evaluations refer to evaluations done by students, which are done on a five-point scale, 5 being an exceptional lesson, and 1 being very unsatisfactory. This system requires that instructors are expected to get a large percentage of high evaluations in order to maintain their current belt level. This in turn encourages instructors to teach good lessons.

Negative evaluations refer to evaluations with a score of "1" or "2". The schedule refers to instructors' schedules, which must be submitted by the 10th of the previous month. Punctuality/Attendance issues are self-explanatory and peak-time lessons are explained above.

Gaba imposed limits on the higher belts (30 instructors for C1 and C2, and 15 instructors for D1 and D2). As of July 2014 the caps were to be raised to 40 for C1 and C2 and to 20 for D1 and D2. As of April 2015 none of these caps have ever been reached.

There are many cases where instructors have been "unbuckled", (issued with notices that Gaba may cut their pay if their performance does not improve) and then "debelted" (had their pay cut). Debelting became increasingly common from 2009 onwards.

This has been done on several different grounds. For example, instructors who have submitted their proposed schedule late, or received a lower client evaluation average than their belt level requires may be "belted down". As noted above, instructors are required to get a substantial percentage of "5" evaluations to avoid the threat of unbuckling. Getting too many "negative evaluations" (with a score of 1 or 2) can also resulting in debelting. "Attendance issues" primarily refer to incidents of lateness or failure to show for lessons, but can also refer to sick calls if they are considered excessive or frivolous. Instructor support leaders are required to classify sick calls as "excused" or "unexcused" depending on the circumstances.

In order to be debelted, the instructor has to fail to meet the minimum requirements for their belting level for two consecutive contract periods. If Gaba determines than instructors have not improved their performance after the second contract period, then they will generally proceed to "debelt" the instructor. Every month, Gaba's Instructor Review Committee (IRC) meets to decide which instructors will be belted up or debelted. There is no way for instructors to appeal a decision or appear at an IRC meeting when their case is being considered. However, Instructor Support Leaders (essentially instructor managers working on the LS level) can and do appeal pending decisions to de-belt instructors.

Belting and debelting statistics

As explained above, Gaba Instructors can do some training sessions and pass a test to be eligible to be “belted" and receive a higher per-lesson pay rate. However, from late 2008, after former CEO Kenji Kamiyama took control of Gaba, the number of instructors being belted decreased and the number of instructors being debelted increased. Nevertheless, the number of instructors being belted up per month has consistently been considerably higher than the number of instructors being debelted. The numbers below include belted instructors who have left Gaba in addition to instructors who have been debelted.

Lessons taught by Instructor Support Leaders and managers

From July 1, 2010, all instructor support leaders and managers (who are on a fixed salary and receive no additional compensation for teaching lessons) are required to teach a number of regular Gaba lessons per month in an effort to save costs. The current range is between 25 and 50 depending on the size of the LS and workload of the individual instructor support leader; it was lowered slightly in October 2010. FMs (trial lessons) are considered as lessons taught, so if the instructor support leader teaches a number of FMs within a given month (a duty that existed before the new requirements), they may not actually teach many regular lessons. The number of lessons they teach are considered when their bonuses are calculated, but they are not paid for the lessons, so they are essentially doing them for free in addition to their regular work. This was done to save costs and to keep the instructor support leaders familiar with and proficient at teaching the Gaba curriculum. Concerns have been expressed that this practice may reduce the number of lessons available to itaku contract instructors. In order to minimize this issue, instructor support leaders are urged by Gaba management to open lessons only when no instructor is available to teach, whenever possible. However, for studios with many open spaces on the schedule, this may not be possible.

Overseas recruiting

Following the lead of many other English conversation schools in Japan, Gaba recruits extensively outside Japan. In March 2008, it conducted a recruitment event in Vancouver, Canada. In February 2010 it also conducted a recruitment event in Melbourne, Australia. In October 2010, it held another recruitment event in Vancouver. Another Australian recruiting event was held in March 2011, and another in London, England in June 2011. Gaba held recruitment events in Seattle in the US and Victoria and Vancouver in Canada in September 2011, and in Taiwan in October 2011. In November 2011, Gaba held recruitment events in San Jose and San Francisco, California.

2012

2012 saw Gaba recruit overseas extensively, with fourteen events held across six countries. The company held recruitment events in Melbourne, Sydney and Brisbane, Australia in March and in South Korea in April. It held events in London, Manchester, and Glascow in the UK in June, and further events were held in Singapore in August.

Recruitment events were held on the West Coast of North America in Vancouver, Seattle and San Francisco in September, and in Seoul in South Korea, also in September. The final events for 2012 were held in Toronto and Chicago in October.

2013

2013 also saw a large amount of overseas recruitment. Just as in 2012, Gaba held fourteen events in six countries. The first recruitment events for the year took place in February in Australia, held in Sydney and Melbourne, with another held in Singapore in March. Further events were conducted in New York and Boston and Seoul and Pusan in April. Next, the company organized events in London, Manchester and Cardiff in the UK in June, and in Hong Kong in August.

Following this, a recruitment event was held in Dublin, Ireland in October, and the final recruitment events for 2013 were held in the UK, in London and Manchester in October and November.

2014

In 2014 Gaba also recruited overseas, with 16 recruitment events being held in five countries. The first recruitment events for the year were held in February in Australia, in Sydney, Melbourne, and Perth. Gaba also held recruitment events in Seoul, South Korea in February. and in April, it held recruitment events in Singapore.

In May it held events in Manchester and London in the UK. along with more events in Sydney and Melbourne in Australia. In July it held four events in the US, in Minneapolis, Dearborn, Columbus, and St Louis. A Singapore recruitment event was held in August.

Later in the year there were also recruitment events held in Sydney and Melbourne in Australia in November 2014.

2015

In 2015 Gaba continued to recruit extensively overseas, with twelve events in four countries. In January it held information seminars in Sydney and Melbourne in Australia, and the company also recruited in Singapore in March. In April it held events in London and Manchester in the UK.

In May it returned to Australia for the second time in the year, again visiting Sydney and Melbourne.

In August it held a recruitment event in Seoul, South Korea.

In October it again held recruitment events in London and Manchester, and in November it returned to Australia for seminars in Melbourne and Sydney.

2016

In 2016 the company continues recruiting overseas, beginning with events in Sydney and Melbourne in February, in Singapore in March and Taiwan in April. In May events were held in Manchester and London in the UK, and in San Diego, Seattle and Portland in the US.

In July an event was held in Seoul, and events are to be held in September in London and Edinburgh in the UK in Seattle, Portland and San Diego in the US in Toronto and Vancouver in Canada in October, and in Melbourne and Sydney in Australia in December.

General Union Gaba branch establishment and early discussions

On September 6, 2007 a union of Gaba's instructors was formed. The Gaba union was formed as part of the Osaka-based General Union, and has members across different areas of Gaba. The General Union belongs to the National Union of General Workers (NUGW), which is itself a member of the National Trade Union Council (Zenrokyo).

Union representatives had many discussions with the company around 2007. In April 2008, Gaba raised its base lesson rate pay from 1,400 yen per lesson to 1,500 yen per lesson for unbelted instructors, and also raised the lesson rates for belted instructors. In addition, contract lengths were increased from four to six months, but no other changes were forthcoming. The General Union has long claimed that these changes were due to union pressure, but Gaba has maintained that the changes were being discussed in 2006, before the union came to Gaba, and that the changes were not related to union pressure.

First Labor Commission case

The union then took an unfair labor practice case through the Osaka Labor Relations Commission claiming that Gaba had not negotiated in good faith, which they are required to do under article 7 of the Trade Union law, and also to have instructors recognized as employees, not entrusted independent gyomu-itaku (sub-contractors) which Gaba currently states they are.

The Osaka Labor Relations Commission case ran from July 2008 to August 2009. A ruling was given on Christmas Eve 2009. It stated that Gaba had not committed an unfair labor practice, because it had negotiated in good faith with the union. This was a victory for Gaba. However, the 35-page decision by the Labor Commission also included language that implied that Gaba's instructor contracting system had elements of labor and that Gaba instructors had the right to organize 'as employees'. This language was in turn interpreted by the General Union as a decision on the status of instructors, and through their web page declared that Gaba instructors are not itaku but employees under the trade union law. This did not immediately change the employment situation for Gaba instructors but the union said it would use this to win standard employment benefits (paid leave, unemployment insurance, health insurance, etc.) which Gaba does not currently give to instructors under their itaku contracts.

Despite winning the unfair labor practice case, Gaba was dissatisfied with the wording of the original ruling, specifically the references to the instructor contracting having elements of labor under the trade union law, and appealed to have the wording of the ruling amended to the Central Labor Commission in Tokyo. Hearings were held from March to July 2010.

On October 28, 2010, after several times encouraging Gaba to reach some form of compromise with the union, the Central Labor Commission rejected the company's claim to have the language in the original ruling by the Osaka Labor Commission changed, stating that Gaba's claim had "no merit". The Central Labor Committee dismissed Gaba's claim because they didn't have enough information either way and they felt it should be decided by a lower court (the Osaka Labor Committee). Despite the inconclusive nature of this decision, it was again interpreted by the General Union as a ruling that Gaba instructors are employees under trade union law, and they again announced a victory on their web site. Gaba then sued the Central Labor Commission in Tokyo District Court for rejecting their appeal, and the first hearing was held on January 19, 2011. As the Central Labor Commission is a government body under the umbrella of the Ministry of Health, Labour, and Welfare, this meant that the company was suing a Japanese government agency. The court's decision was handed down on July 27, 2011, and Gaba's appeal was rejected. The company appealed this to the Tokyo High Court, and the first hearing took place on November 15, 2011. After negotiations with the union the company agreed to withdraw this case and recognize the rights of its instructors under trade union law.

Hello Work

In August 2010, union members lodged applications with the Shibuya Hello Work office to be enrolled in unemployment insurance. Hello Work took no action for almost a year and in June 2011, the GU made a formal complaint. In response to the complaint Hello Work apologized and said they would launch an investigation immediately. The applications, still making their way through the bureaucracy, were later withdrawn by the GU as part of an agreement signed with Gaba. As of January 2016, five years since the applications were made with Hello Work, Gaba instructors are not enrolled in unemployment insurance.

SESC complaint

On October 4, 2010, the General Union made an official complaint to the Securities and Exchange Surveillance Commission, part of the Financial Services Agency, over compliance issues based on Gaba stating in its report for the 2009 financial year that there was no union at the company, and that labor relations were "smooth and harmonious", and also for failing to mention the Osaka Labor Commission case and Gaba's subsequent appeal to the Central Labor Commission in Tokyo.

Libel lawsuit

In addition to suing the government, Gaba decided to sue the General Union for libel, over an article on the union webpage dealing with Gaba's compliance. The company sued the union for 58 million yen in damages and legal costs. The first hearing was held on January 28, 2011, at the Tokyo District Court, and the company's suit was dismissed in November 2011. After negotiations with the union Gaba agreed not to appeal their loss.

Further Labor Commission case

After Gaba sued the General Union for libel, the union lodged another unfair labor practice, asking that the Osaka Labor Commission have Gaba cease interfering in union activities, withdraw their demand that the union remove the news article from their website, not intimidate the union and its members by litigation and other means, that then-majority stockholder Daiwa Securities negotiate with the union, and that Gaba pay the union 58,200,000 yen (the amount Gaba sued the union for) for interfering with union activities, and publicly apologize. The case was lodged on May 16, 2011, and was expected to last for some time. The union and Gaba signed an agreement in April 2012, and the case was withdrawn.

Non-renewal and rehiring of union branch chair

After over 8 years as a Gaba instructor, Gaba non-renewed the contract of Francis Strange, the chair of the Gaba branch of the General Union, effective November 1, 2011. The union viewed this as union busting, and in October the union demonstrated and leafleted Learning Studios in Osaka and Tokyo, and negotiated with Gaba and new owner Nichii Gakkan in an effort to reverse the non-renewal. After negotiations Gaba agreed to rehire Strange and he returned to work on February 12, 2012.

General Union and Gaba sign agreement

In April 2012 Gaba and the General Union signed an agreement in which both sides withdrew their pending cases in the courts and government bureaucracy. Gaba agreed to negotiate in good faith on the issue of employment status and benefits for instructors.

General Union and Gaba begin negotiations

After signing the agreement to negotiate, the union and the company commenced negotiations on conditions on May 28, 2012, and the negotiations are ongoing as of 2016.

Tozen branch establishment

On September 28, 2012 the Tokyo General Union (Tozen) declared a branch to the company and requested collective bargaining over a list of demands.

Gaba promises improvements

The General Union Gaba branch held their first official collective bargaining session for 2013 with Gaba on March 4, 2013. The company's representatives said that they were "determined to improve working conditions for instructors" and that they were looking at increasing the TNT incentive and the per lesson pay rate.

Morning peak lesson pay increase

The General Union and company subsequently signed a collective agreement that from May 2013 all instructors working the first three weekday morning peak time lessons (the F-shift) would receive an additional 200 yen for every lesson taught. The agreement was officially signed and dated on June 17, 2013. and the first payday including the incentive was June 25, 2013. For instructors on the lowest pay rate (around 50% of the workforce) this meant a 13.3% pay increase for those lessons.

Grievance Procedure Agreement signed

On October 4, 2013 the General Union and Gaba Corporation signed a grievance procedure agreement. This legally requires the company to respond to workplace grievances related to individual instructors in a fair and prompt manner.

Dealing with Sexual Harassment from Clients to Instructors

From 2013 the General Union raised a number of incidents where Gaba clients had sexually harassed instructors. In response to this, the company changed their policy to make it easier for instructors to block students who behaved inappropriately and introduced a standardised form for ISLs to report harassment from clients to Gaba HQ.

In 2014 the Gaba Branch of the union appointed sexual harassment officers for instructors to speak to about incidents at work.

In 2015 Gaba staff deleted information on the system about clients who had harassed female instructors. An instructor brought up the issue with the company several times as new instructors were left with no warning, and no knowledge that they were in their rights to have the student blocked. No action were taken. Information about this were finally entered in the system by the instructor so female instructors would be aware and could prepare themselves. The comments were repeatedly deleted and the instructor was given a written warning by the company and told not to do it again. The union protested this. Later in 2015 an instructor who warned a new instructor about a client who had harassed female instructors in the past was disciplined by the company, which the union also protested.

Requests to improve disaster preparations

The GU branch has raised safety issues a number of times with the company. In June 2014 it asked for drills at all learning studios. This didn't occur. In 2014 after the evacuation notice at the Shimbashi LS was found to have no evacuation site at all the union asked the company to correct this, which was done.

In 2014 the union also asked the company to comply with the Metropolitan Tokyo Ordinance on Measures for Stranded Individuals, to make sure that sufficient supplies were stockpiled at Learning Studios in case of disaster. The company stated that it had made preparations.

After major earthquakes in May 2015, the GU again asked the company to conduct drills at all learning studios and make sure that instructors, clients and staff are all prepared in case of disaster. A union survey found poor levels of preparation among instructors. The company stated in August 2015 that it plans to have drills "more often". Gaba held drills at 14 Learning Studios in late 2015 and early 2016. In July 2016 it also ran drills at three Learning Studios. It will also hold drills at 8 Learning studios in late 2016 and early 2017.

Gaba provides emergency preparations

After the General Union raised the issue a number of times, over July and August 2016 Gaba provided emergency kits to all booths in all 42 Gaba Learning Studios across Japan. The kits contain food, drink, and two helmets.

Sexual harassment allegations

Gaba teachers complained in 2014 that company management has not acted appropriately or with sufficient support when they have been sexually harassed by students at work.