Union, The Royal Gazette has learned.

In a decision that could have far-reaching effects on the hotel industry's relationship with the union, the Essential Industries Disputes Settlement Board has concluded that no collective bargaining agreement exists between Grotto Bay and the BIU.

The ruling appears to sanction the hotel's controversial moves to eliminate the mandatory tipping system and to set worker contracts without the union.

The yet-to-be released document also says no contract existed between the union and hotels after the 1988-1991 agreement expired in February, 1991.

The finding could provide a legal out for hotels wanting to break with the union over the new contract outlined in the Haughton Report.

The Elbow Beach Hotel, which last week described the Haughton deal as "lunacy'', is the only member of the Hotel Employers of Bermuda not to commit verbally to the deal.

The Disputes Board was convened to decide whether a collective agreement existed between the hotel and the union when it fired three workers.

Since the Board decided none existed, it found that the hotel "did not commit an unfair industrial practice'' in the firings.

Nevertheless, in separate findings, it concluded that two of the three fired workers -- store room manager Mr. Erwin Whittaker and dining room captain Mr.

Barry Smith -- were wrongfully dismissed.

The Board upheld the firing of bar porter Mr. Larry Robinson.

Last night, Labour Minister the Hon. Irving Pearman said the Disputes tribunal "fairly and honestly looked into the matter''. Its findings, he said, would not be a matter for Government action.

Grotto Bay managing director Mr. George Robinson declined to comment pending the release of the report, either today or Monday.

BIU leader Mr. Ottiwell Simmons MP was off the Island and unavailable for comment.