leaders in a plot to bust the Bermuda Industrial Union were made by the union's president yesterday.

Mr. Ottiwell Simmons said after a conference in August, 1990, attended by Cabinet ministers, hotel owners and their deputies, relations between the BIU and hoteliers worsened.

He said that only a month previously the two sides met to discuss the collective bargaining agreement which was soon expire -- and both sides left the meeting with good intentions and on good terms.

But speaking before the Essential Industries Disputes Settlement Board yesterday, Hotel Employers of Bermuda president Mr. Dennis Tucker denied any such conspiracy.

He said that in August, the hotels noticed a serious deterioration in business and that the recession made the situation worse.

"The only thing that influenced us was the state of the economy,'' he said.

"The BIU was not recognising the economic conditions we were under and was holding onto excessive wage and benefit demands, and we knew we could not afford them.

"It was mentioned to us by a member of the union side in passing that it was very difficult to try and get negotiations going early as it was mid-season and they were out to try and earn as much as they possibly could. This meant they would be losing income (by attending negotiations).'' The last collective agreement between management and workers expired on May 24, 1991. The hearing into the contract dispute, chaired by Prof. Ronald Haughton, has twice been adjourned since it began in May this year.

Yesterday, Mr. Tucker said he could not say if any legislation in favour of the HEB came as a result of the August meetings.

But he said that as a result of the industry's poor financial situation, Government commissioned an in-depth review.

Based on the report, it was decided the hotels required extra cash for refurbishment and were allowed a reduced duty on products imported for that purpose.

Mr. Tucker said that in mid-October, the HEB sent a letter to the BIU advising it of the poor economic situation and asked if it would consider extending the existing collective bargaining agreement for one year and freezing wages.

They asked for a response by November 1 but had not received one by November 21. A second letter was sent informing the BIU that if no collective bargaining agreement had been reached by February 24, the agreement would be terminated.

"That is where that goodwill started to deteriorate,'' he said, adding that relations had broken down by December 10.

But Mr. Simmons insisted that the hoteliers did not really bargain with the BIU in good faith.

He said his organisation was handed a contract proposal by the HEB on February 23, a day before the contract was to expire.

And he said the HEB gave no indication it was willing to negotiate on the points they proposed.

"At that meeting, the HEB presented its proposal and said if it was not agreed, the collective agreement would be terminated.

"Isn't this a contradiction to what you're saying today that you were intending to negotiate all day and all night ... there was no intention to negotiate. This was impressed, take it or leave it. At the 11th hour you expected the union would agree to something like that?'' The hearing continues this morning.