By Haidee V. Eugenio
Variety Assistant Editor

THE Department of Labor yesterday ordered Pacific Gardenia Hotel and its court appointed receiver Rex I. Palacios to pay over $55,000 to 17 former hotel employees, plus unliquidated damages and a fine due to labor violations that include nonpayment of wages, improper termination of contracts, illegal hiring of eight alien workers and nonpayment of medical bills.
SY’s Corp. dba Pacific Gardenia was in receivership, and is now for sale.
Labor Hearing Officer Barry Hirshbein said during the period of receivership, unpaid wages exceeded $25,000, and liquidated damages and sanctions pushed the total to well over $50,000.
“The hearing officer believes that the court appointed receiver was grossly negligent in this case,” Hirshbein said in an eight-page administrative order issued yesterday.
The 17 workers are entitled to payments ranging from $268.02 to $6,638.54.
Palacios, in a telephone interview with Variety yesterday, said he submitted his resignation as Pacific Gardenia receiver to the court on Tuesday, citing nonpayment of his wages since early 2006 and prolonged work on the case.
Palacios, who is now a consultant for the Tinian Mayor’s Office and board chairman of the Commonwealth Ports Authority, said that he was not made aware of Tuesday’s labor administrative hearing on the Pacific Gardenia case and has not seen a copy of the order released yesterday.
“The workers and Gardenia were working on a settlement back in June or July 2006…At that time, the court said I could only pay the workers $4,000 in back wages and now Labor is saying Pacific Gardenia and I should pay over $50,000…I have to look at the order and of course I will appeal this,” said Palacios, adding that since last year, he has been working on Tinian.
The director of the Division of Labor earlier found numerous violations of the Nonresident Workers Act and the Alien Labor Rules and Regulations by Pacific Gardenia, including failure to produce records requested by Labor, failure to furnish written payroll statements to employees, failure to appear for investigation, failure to pay wages, improper termination of contracts, employing alien workers without approved contracts, and failure to pay medical expenses.
The wage claims addressed in the Pacific Gardenia labor case arose during the period of the Palacios receivership and for the most part occurred from Dec. 25, 2005 to March 18, 2006.
Tuesday’s labor hearing was not attended by Palacios or any representative from Sy’s Corp.
“Presumably, the court’s appointment of a receiver was intended to preserve the assets of Gardenia and ensure compliance with the laws and regulations governing its operation. It appears that with respect to the Nonresident Workers Act and the Alien Labor Rules and Regulations, the receiver failed to achieve that goal,” said Hirshbein.
The labor hearing officer said it appears that the receiver failed to keep proper records and failed to present his records for inspection when requested.
The use of unapproved subcontract employees is a clear violation of the regulations, said Hirshbein, adding that the receiver improperly terminated workers, thereby incurring over $2,000 in contract damages.
“Finally, it is unconscionable for any employer to go three months without meeting payroll obligations, but this is particularly true for a receiver,” Hirshbein added.
The hearing officer said the receiver had an obligation to immediately inform the court and the Department of Labor of his inability to pay wages but there is no evidence that he did so.
The remedies available then included, but were not limited to, business closure, reduction in force or reduction in work hours.
“These actions would have at least minimized nonpayment and at best might have eliminated nonpayment completely,” said Hirshbein.
17 workers
Pacific Gardenia and Palacios were given up to 21 days from yesterday to pay 17 workers wages and damages, as well as the $5,000 sanction.
The workers were owed $24,192.27 in unpaid wages. Two of them were also determined to have been improperly terminated and were therefore entitled to contract damages totaling $2,112.
Moreover, the amounts owed to workers were doubled as a result of the Labor-imposed unliquidated damages equal to the amount owed.
For example, a worker who was owed $2,571.19 is entitled to a total payment of $5,142.38.
The workers — Ariel A. Drilon a.k.a. Ariel Atayde, Juanito M. Dabu, Amante L. Serrano, Joseph Jeremy D. Boleche, Grace B. Vergara, Ariel F. Abadilla, Davy D. Afable, Peter P. Barol, Edgar F. Genobaten, Joey P. Patricio, Arnel H. Salonga, Jerry D. Uberita, Simeon Villarico, Marlon J. Bernido, Rosalie R. Gumaya and Eulaine J. Libang — are entitled to payments ranging from $268.02 to $6,638.54.
They are also entitled to transfer relief. If any of the workers desire repatriation, they can make their request through Labor investigator Dean Tenorio.
Labor found that Pacific Gardenia was never the employer of record of two of the workers in this case, and they are included in an agency case investigating the employment practices of their employer of record, Ramon Manahane.
Neither Pacific Gardenia nor Manahane obtained approval from the director of Labor for subcontract agreements.
“The director of Labor established that Gardenia, during the period of receivership, employed eight alien workers who were not approved by the director of Labor,” said Hirshbein.
Labor also determined that Pacific Gardenia has outstanding unpaid medical expenses for one of its former workers.