And it has called on the Department of Social Services to bail members out.

The BIU claims it has been devastated by hoteliers failing to deduct union dues from workers' wages.

Yesterday union president Mr. Ottiwell Simmons MP also pointed an accusing finger at Government.

He said ministers had failed to step in to stop the actions of hotel chiefs.

"The employers and Government are going to have to repair the damage to our organisation,'' he said.

Workers have been told about the crisis facing their organisation in a letter from the BIU's executive board.

The letter, dated December 14, has been pinned up in workplaces.

It begins: "Our union is experiencing a serious cash flow problem and can no longer afford the member benefits that we have been providing in the past.

"In these circumstances, we have approached the Department of Social Services to assist you in meeting your basic needs.'' The letter claims the union has been under "severe attack'' during the past year.

It adds that more and more companies are refusing to collect dues -- some failing to recognise existing agreements.

Other businesses are using any pretence to fire union leaders, the letter states.

And it goes on: "Added to this, hotels are closing earlier and remaining closed longer.

"Then non-organised construction companies are being granted major contracts in an obvious attempt to avoid unionised firms, giving rise to a reduced dues paying membership.

"We have also suffered heavy expenses in support of industrial disputes.'' The letter continues: "For all of the above reasons, we find that we are short of cash to continue member benefits as have in the past.

"We, therefore, urge that you approach the Department of Social Services.

"Remember, you have earned the right for any assistance since you pay a higher proportion of your income in taxes than all others who are in higher income brackets than yourself.

"If you have any questions, please approach any union organiser or union officer for further explanation.'' Yesterday Mr. Simmons said the union had lost hundreds of thousands of dollars over the last two years.

Many of the losses were down to the discontinuance of deducting union dues.

"I expected some sort of intervention from Government,'' he said.

Mr. Simmons spoke of people in powerful positions in Bermuda who were "powerless'' to undo the wrongs of employers.

Those with real power included foreign hotel owners and exempt companies, he added.

Mr. Simmons also revealed the union had set up a legal defence fund, following a series of cash-draining court cases.

Members were being asked to contribute $5 per month for 12 months.

"This amounts to $60 on a voluntary basis, so hopefully we can retrieve large sums spent on legal action,'' explained Mr. Simmons.

Mr. Simmons, who did not spell out which benefits to members had been cut, denied there had been an angry backlash since the December letter.

"Obviously people won't be pleased, but there is an understanding among the membership about the situation we are in.

"The BIU is a fighting organisation and we are used to taking on challenges,'' the BIU chief said.