a legal relationship between the Bermuda Industrial Union and Pink Beach Club.

The decision to back down from a Privy Council fight against the Court of Appeal ruling in effect sanctions the contract separation between the hotel industry and the union.

Last night, the lawyer who represented Pink Beach before the Court of Appeal, said Government's decision meant the contract issue is dead. "The result is that as we speak there is no collective bargaining agreement between the hotel industry and the union,'' Mr. Alan Dunch said.

"Every hotel is free to conduct their labour relations in the manner they decide is in the best interests of the hotel, without fear (of having Government test the issue again before a tribunal).'' Government's decision not to go to the Privy Council was made after lawyers in London and the Attorney General's Chambers investigated possibilities for a successful appeal.

In its decision three weeks ago, the Court of Appeal rapped the Labour Minister for twice asking the Essential Industries Disputes Settlement Board to determine if a collective bargaining agreement existed between the hotels and the union.

The court said it was wrong to refer the dispute to the Board when the same body had decided the "same question'' in an earlier decision.

Critics in the industry had charged that the Minister was abusing the system to get an answer he wanted.

Last night Labour Minister the Hon. Irving Pearman said he was satisfied the Court of Appeal decision had not compromised the authority of the Board.

Legal advice to the Minister indicated the Court of Appeal's decision only restricted him from again asking the Board to determine if a collective agreement continued to exist between the union and a hotel.

"I am satisfied that the Court's decision will not stop us from proceeding with disputes in this industry,'' Mr. Pearman said.

"My concern initially was that this decision would impede us putting forward other cases to the Board. But I'm assured that this is not the case.'' The existence of a collective bargaining agreement between the hotels and the union became an issue in February, 1994 when the hotels formally terminated the 1988-1991 agreement.

The two sides have failed to negotiate a new deal despite nearly three years of talks and numerous interventions by the Government, mediators, facilitors and tribunals.

Pink Beach used the February, 1991 termination to operate the hotel as a non-unionised operation.

Despite the stand-off, hotel workers are receiving pay and benefits set out by an Essential Industries tribunal which the two sides continue to reject for various reasons.