The Bermuda Industrial Union is on the warpath again in its dispute with Government over the termination of Pro-Active Management Systems' contract to build the new senior secondary school.

And the dispute could once again lead to work stoppages across the Island as a mass membership meeting has been called for 9 a.m. this morning.

The development comes just two weeks after the union dropped a threat of legal action against Government and the two parties held a joint Press conference saying they had had a “meeting of the minds”.

Yesterday Government confirmed that bus and ferry services are expected to be disrupted from 9 a.m. to 2 p.m. today as a result of the meeting.

The union is concerned about the liabilities of its wholly-owned subsidiary Union Asset Holdings (UAH) which provided the completion bond for the project and claims the company's rights as the project's surety continue to be ignored or violated.

In a letter sent to Acting Premier Paula Cox yesterday, and obtained by The Royal Gazette, general secretary Molly Burgess repeated arguments made in previous correspondence with the Government and warned that legal action was in the offing.

It said UAH was unlawfully left out of arrangements to complete the project, that Government had failed to pay Pro-Active monies it was owed which could have satisfied its severance pay liabilities and that millions of dollars of union money was now hanging in the balance as a result of Government's handling of the contract.

“The BIU has every intention of taking direct, lawful and reasonable action to ensure these rights are respected and upheld,” the letter says.

And the letter reveals that the union was out of pocket to the tune of $4 million by playing banker to Pro-Active.

“We need not remind you - but do so in any event - that as the direct result of your arbitrary treatment of applications by PAMS for progress payments under the contract, UAH has provided something in the order of $4 million further funding to this project and expects monies to be returned by Government in due course, and certainly sooner rather than later.”

The union is also claiming that UAH, as surety, has common law rights “including the right to take over, if it sees fit, completion of the construction works, and at the very least the right to be consulted and to have full disclosure of all arrangements being made for completion of the construction works”.

And it demanded that Government return all equipment and machinery left on the site to UAH.

“As valuable income is being lost by Government's ongoing and unlawful retention of this machinery and equipment, we call upon Government to immediately release all remaining machinery to UAH or to its order.”

The letter goes on to say that UAH had been given no direct information about Government's arrangements with third parties to finish the works and there had been conflicting reports in the media about the role of Somers Construction.

“For the last time, we require your assurance that Government will not enter into an agreement with any third party - whether Somers Construction or otherwise - with respect to arrangements for the completion of the construction works without prior reference to us.

“We require full and complete disclosure of all arrangements disclosure of all arrangements and discussions which have so far been effected or which have taken place with respect to completion of the construction works,” the letter continued.

“Thirdly, we advise that you should at least meet with UAH to consider proposals by UAH to take over the construction works in mitigation of any obligations which may be imposed upon UAH under the bond.”

It claimed that Government's failure to make good on monies due to Pro-Active before the contractor was terminated deprived workers of their rights to severance and redundancy payments.

“We repeat these are grave matters and that Government ignores and disrespects our and our subsidiary's rights at its peril.”

The union had agreed to hold back on threats of legal action when Government conceded that Pro-Active should have access to the site to conduct its own assessment.

Yesterday a Pro-Active and union spokesman said that that was the only major concession Government had given.

“Since then there has been nothing more than promises of meetings, promises at meetings. Nothing has been finalised to any degree of satisfaction. At the same time what we've clearly seen is the finalisation of arrangements with Somers, whatever those arrangements are. And the fact that the union has not been included in those arrangements is very, very disturbing,” the spokesman added.

Government released a statement from Works Minister Ashfield DeVent saying that the letter contained nothing new and denying that UAH had any rights in selecting a contractor to complete the project.

“The Minister went on to say that he was surprised that legal issues have been set out by the Union itself rather than through their attorneys,” the statement continued.

“These issues have been raised by UAH's attorneys and replied to by the Government's legal advisors. Again, to date, no response has been received from UAHs' attorneys.”

Government also released a letter from acting Premier Paula Cox responding to the union's letter saying that the union should have sought a meeting with her first.

“I find it extraordinary that (the union) would convene a mass meeting at such short notice, and without the courtesies one would expect from a responsible Union,” Ms Cox's letter said. I find it equally extraordinary that the first course of action was to send me a letter, copying it to the media (amongst others), without the benefit of first contacting me to seek a meeting to discuss your area of concern.

“As you are aware, there are a number of outstanding matters regarding your concerns and these are subject to adjudication in the appropriate forum. In my view the pre-emption of these formalities is counterproductive.”