Gaba Corporation

Gaba

Company type	Private (Subsidiary of Nichii Gakkan)
Industry	Language instruction
Founded	Tokyo, Japan (July 1995)
Headquarters	Glass City Motoyoyogi 4F 30-13 Motoyoyogi-cho Shibuya-ku Tokyo 151-0062
Key people	Takayuki Masuda, President, CEO and Representative Director; Akihito Terada, Board member (outside); Tsuyoshi Terada, Board Member (outside); Nobusuke Mori, Board Member (outside); Mihoko Kudo, Executive Officer Service Quality; Daisuke Aoyagi, Executive Officer General Affairs
Website	www.gaba.co.jp

Gaba Corporation (株式会社 GABA, Kabushiki Kaisha Gaba) is a chain of eikaiwa (English conversation schools) in Japan. The company was founded in July 1995 and is currently headquartered in Shibuya-ku in Tokyo with learning studios in the Tokyo, Chiba, Yokohama, Nagoya, Osaka, Kyoto, and Kobe areas. The current president and CEO is Takayuki Masuda.

The company provides language lessons on a "one-to-one" (one student and one teacher) basis and using textbook lessons and online (computerized) instructor aids, language and vocabulary drills, and guided conversation topics. Gaba describes itself as a "man-to-man eikaiwa". In Japanese, "man-tsū-man" (マンツーマン), a katakana phrase adapted from English, means "one-to-one", referring to the company's one student/one instructor lesson style.

As of May 2012 the company has 36 learning studios, 980 instructors and 431 other staff across Japan.

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 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 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.

Gaba Day, Tokyo Dome 2007

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.

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 30th 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.

Headquarters

Gaba HQ, Motoyoyogi, Shibuya-ku, Tokyo

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 Shinjuku-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.

Internal Structure

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

• Instructor Support - the Instructor Support Leaders (ISLs) and Instructor Support Managers (ISMs) are former instructors who work in the Learning Studios dealing with instructor scheduling, lesson quality, sales, and other issues relating to instructors.
• Instructor Recruiting - the department responsible for recruiting new instructors, conducting interviews, etc.
• Instructor Certification - the certification department, responsible for certifying new instructors (initial certification) and other follow-up certification in the Gaba teaching methodology.
• Instructor Administration - the department that deals with contract renewals, belting, instructor payment, tax issues, etc.
• Academic Development - the department that creates Gaba's learning materials.

Learning Studio history

After being founded in Tokyo in 1995, Gaba has consistently expanded, opening at least one Learning Studio every year since 2000. 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 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.

File:Gaba train advertisement.JPG

Gaba advertises widely on trains

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 maintains its language center in Ginza, although it is no longer designated as female specific.

2006 saw Chayamachi LS open in April and the Omotesando LS relocate 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 Hachioji in March, Kita-Senju in April, the Futakotamagawa LS relocated in April, Ebisu LS opened in August, and Kyoto LS opened in November. The Hiroo LS closed in October 2007, merging with the Ebisu LS.

In January 2008, the Shimbashi-Shiodome Learning Studio relocated, and in February, the Kawasaki LS opened. In April, the Shibuya LS relocated, as did Kitasenju LS in June.

On 1 April 2009, the Otemachi LS was opened, and on 1 October the Akabane LS. The Nagoya LS closed in March 2009, and its operations were consolidated into the Sakae studio. Meguro Learning Studio was also relocated in April 2009. On October 31, the Ikebukuro annex closed.

Shinyurigaoka LS closed on 29 March 2010, it relocated to the new Machida LS, 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. Namba LS opened on March 1, 2011.

On May 1 2011 Gaba opened Kashiwa LS in Chiba.

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.

Current Learning Studios

As of May 2012 Gaba has thirty-six Learning Studios across Japan. The vast majority of them (twenty-nine) are located in the Kanto region, with the remaining LSs being in Chubu (two LSs) and Kansai (five LSs).

Kanto region: The Akasaka-Tameike, Akabane, Ikebukuro, Ebisu, Otemachi, Omotesando, Kitasenju, Kichijoji, Ginza-Yurakucho, Shinagawa, Shibuya, Shimokitazawa, Jiyugaoka, Shinjuku, Shinbashi-shiodome, Seijo, Tachikawa, Tokyo Hachioji, Futakotamagawa, Machida and Meguro LSs (Tokyo prefecture).

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

Chiba 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 and Umeda LSs (all in Osaka prefecture).

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, and Futako-Tamagawa.

Offsite lessons

While the vast majority of Gaba's lessons are conducted in its Learning Studios, it also teaches offsite lessons to various corporate clients, including Rakuten and Sumitomo Mitsui Banking Corporation.

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 new Travel series. There will be textbooks for level 1 to 4, replacing the Planet textbooks which were used before.

Jaba

In 2008, Gaba started the Jaba program, teaching Japanese lessons to instructors. At first they were held in the Tokyo LS, then in the Ikebukuro Annex, and from November 2009, they relocated to the new headquarters in Moto-Yoyogi. Jaba offers both private and group lessons for students of a variety of levels.

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.

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 bonuses for teaching a certain amount of lessons each month. There are three bonus levels: level A is for teaching 100-150 lessons per month, level B is for teaching 151-200 lessons per month, and level B is for teaching 201 or more lessons per month. Instructors may also receive bonuses 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 bonus 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 bonus will be part of the paycheck for the following month. Also, instructors do not receive a bonus if the FM is done for a "Guaranteed" FM client. Guaranteed clients are generally supported by their company. FM instructors are also eligible for bonuses 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 a 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.

On the other hand, itaku status results in considerably lower taxation than salaried workers generally pay. Gaba pays a 5% consumption tax to its instructors, and a 10% withholding tax is taken from instructors' pay, so in the end, instructors see only 5% deducted from their paychecks. 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.

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.

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. 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. As of May 2012, 460 out of 980 Gaba instructors (46.93%) are being paid more than the 1,500 yen base rate for peak lessons. However, the rate of belting up slowed considerably following the restructuring in late 2008. In addition, the lesson evaluation average (LEA) required for some belts were raised in 2009, and the averages for all belt 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:

Pay rates

	Peak lessons	Non-peak lessons
D2	2200	1600
D1	2100	1600
C2	2000	1500
C1	1900	1500
B2	1800	1500
B1	1700	1500
A2	1600	1500
A	1500	1500

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

Belt requirements

	Evaluation average (From February 2011)	Evaluation average (From April 2009)	Evaluation average (Before April 2009)	% of negative evaluations	Submitting schedule on time	Punctuality/Attendance issues	Peak lessons taught
D2	4.7	4.6	4.6	0.3%	Always	None	80
D1	4.7	4.6	4.5	0.3%	Always	None	80
C2	4.5	4.4	4.4	0.4%	Always	None	60
C1	4.5	4.4	4.3	0.4%	Always	None	60
B2	4.3	4.2	4.2	0.8%	Always	None	40
B1	4.3	4.2	4.0	0.8%	Always	None	40
A2	4.3	4.2(*)	N/A	0.8%	Always	None	40
A	4.1	4.0	N/A	1.0%	Always	None	0

(* The A2 Belt only 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.

It is not currently possible to be belted-up to C1 as instructors at this levels currently exceed the company-imposed limits (30 instructors for C1 and C2, and 15 instructors for D1 and D2.)

There have been 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 seen as 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.

Overseas recruiting

Following the lead of many other English conversation schools in Japan, Gaba recruits extensively outside of 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 the 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.

Gaba held recruitment events in Melbourne, Sydney and Brisbane, Australia in March and in Korea in April 2012. It will hold events in London, Manchester, and Glascow in the UK in June 2012.

Post-2008 Cost-cutting impact on instructors

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.

Belt changes (April 2010 figures not available)

	Feb 2010	Mar 2010	May 2010	Jun 2010	Jul 2010	Aug 2010	Sep 2010	Oct 2010	Nov 2010	Dec 2010	Jan 2011	Feb 2011	Mar 2011	Apr 2011	May 2011	Jun 2011	Jul 2011	Aug 2011	Sep 2011	Oct 2011	Nov 2011	Dec 2011	Jan 2012	Feb 2012	March 2012	April 2012	Change
D2	19	19	18	17	16	16	16	16	15	14	14	14	14	14	14	14	14	13	12	12	13	13	13	13	13	12	-7
D1	20	18	16	17	16	15	15	15	15	15	15	15	15	14	14	14	13	13	12	13	12	12	12	12	11	12	-8
C2	37	38	37	34	34	32	34	34	34	32	31	31	31	31	30	30	31	31	30	27	26	27	27	26	26	28	-9
C1	36	36	36	34	34	32	30	30	30	30	31	31	30	29	28	27	25	27	29	30	31	31	32	32	33	31	-5
B2	93	96	94	94	93	93	93	94	99	99	99	99	97	95	95	95	92	94	94	94	94	95	93	93	93	93	0
B1	139	133	127	117	115	110	107	102	96	92	87	88	89	95	95	98	96	91	84	80	81	76	81	82	85	89	-50
A2	N/A	N/A	15	31	39	50	57	64	69	79	89	91	96	95	96	92	114	117	131	142	143	153	160	164	181	195	+195
A	505	500	512	510	510	494	502	504	510	498	491	514	529	507	512	512	520	549	546	542	568	551	543	549	514	520	+15
Total	849	840	855	854	857	842	854	859	868	849	847	873	891	880	884	882	905	935	938	940	968	958	961	971	956	980	+131
Belted	344	340	343	344	347	348	352	355	358	351	356	359	362	373	372	370	385	386	392	398	400	407	418	422	442	460	+116

From July 1, 2010, all instructor support leaders and managers (who are on a fixed salary) 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.

Industrial action

General Union Gaba branch establishment and early discussions

On 6 September 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.

Union representatives had many discussions with the company around 2007. In 2007, 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 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" itaku (sub-contractors) which Gaba currently states they are.

The Osaka Labor 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. After Hello Work had taken no action for almost a year, in June 2011, the GU made a formal complaint, in response to which Hello Work apologized and said they would launch an investigation immediately. The applications were later withdrawn by the GU as part of an agreement signed with Gaba.

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.

General Union demonstration at Umeda Learning Studio, Osaka

Non-renewal 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.

External links

• Official website Template:Ja icon
• General Union GABA branch website