The Bermuda Industrial Union has called a general meeting of all hotel division members in response to the HEB's refusal to sign a new contract with it.

The emergency meeting is being held at BIU headquarters at 3 p.m. tomorrow.

The Hotel Employers of Bermuda decision -- made on Friday night -- would be "dealt with'' at the meeting, BIU leader Mr. Ottiwell Simmons said yesterday.

He would not comment any further.

The HEB decision came minutes after the Elbow Beach Hotel announced it was pulling out of the HEB union.

HEB executive director Mr. John Harvey blamed hoteliers' refusal to sign a new collective bargaining agreement with the BIU on clauses in the Labour Relations Amendment Act of 1991 which would make hotels bound by any new agreement forever.

It was expected an agreement would be signed this week, after months of wrangling before the Essential Industries Disputes Settlement Board for a new contract.

Hoteliers and the union had last month begrudgingly accepted Professor Ronald Haughton's award.

The award gave hotel workers wage hikes of five and two percent for 1991 and 1992.

Mr. Harvey called the award "expensive'' while the BIU termed it "disappointing''. However, both parties said they would abide by it.

But after meeting with hoteliers last Friday, Mr. Harvey said the HEB had decided not to sign the award after all, though it would continue to adhere by it.

Mr. Harvey said he was hoping to resolve the clause problem with the Labour Minister.

Mr. Simmons did not want to comment on the matter at the time saying it was between Government and the HEB. He also declined to comment on the Elbow decision saying he did not see how it affected the BIU.

Elbow became the second major hotel to break ties with the HEB, concluding it was no longer in its best interest to remain a member.

Managing director of the resort's development company Mr. John Jefferis had no comment when asked if the resignation meant the hotel was about to walk away from the BIU as well.

But Grotto Bay Hotel, Pink Beach Club, Mermaid Beach Club and the Palm Reef Hotel all split with the BIU after resigning or being forced out of the HEB for non-compliance.

Elbow was the only HEB member that had not accepted the Haughton award. Mr.

Jefferis said management was still assessing it. He has labelled it "lunacy''.

The hotel had wanted to cover pay hikes with gratuity pay increases, a move that Prof. Haughton disagreed with.

Industrial relations last year were marred by major hotel, trucking and docks disputes, culminating in an Island-wide strike call by the BIU.