the BIU.

And it warned last night an Elbow Beach Act could be in the pipeline to force a settlement.

Labour Minister the Hon. Irving Pearman backed union claims the hotel was flouting labour legislation.

He also took a swipe at the 13 small hotels which are likewise refusing to sign a contract with the union.

And he said legislation may be brought in to force both sides to agree to a settlement.

"An Elbow Beach Act cannot be ruled out. It is being considered,'' he stated.

His move came amid accusations the American owners of Elbow Beach, Marcor Realty, have a $1 million "war chest'' to bust the union.

Bermuda Industrial Union president Mr. Ottiwell Simmons said he had been reliably informed about the management plan.

But last night Elbow Beach managing director Mr. John Jefferis dismissed this as fabrication.

Yesterday's developments will provide a backdrop for this afternoon's key union meeting of Elbow workers.

They will meet at BIU headquarters at 3 p.m. to consider their battle strategy.

The union has vowed to stage a three-day strike once occupancy levels hit 70 percent.

Mr. Jefferis said levels this weekend would be "well in excess of 70 percent''.

"They have been for some time. The strike threat has not caused us any disruption.'' Last night Mr. Simmons was keeping his cards close to his chest.

He declined to lend fuel to speculation workers could strike this weekend.

"The hotel may or may not reach 70 percent this weekend -- the problem with projections is that there may be late cancellations,'' he said.

Mr. Simmons rejected suggestions the union may be deliberately creating false strike alarms to frighten guests away from the hotel.

"It is not our intention to have any uncertainty. We don't want a strike at all,'' he stressed.

Mr. Simmons said the blame lay with Elbow Beach for ignoring the Prof. Ronald Haughton Award, which established a new contract between the Hotel Employers of Bermuda and the BIU.

Instead, the hotel broke ties with the union and offered its own terms and conditions to workers.

And Mr. Simmons was also fiercely critical of Government for failing to get tough with the Paget hotel.

"I am horrified that Government can sit back and see this hotel blatantly disregarding the Government,'' he said.

Mr. Simmons has seen the dispute with Elbow Beach as critical for the union.

He fears a union defeat could lead to a mass revolt from the union, with other properties following Elbow Beach.

"The 13 smaller properties which have not signed the Haughton Award could bolt,'' he said.

"And before we know it we will have complete disarray. We are going down the road of lawlessness.'' Mr. Simmons fears larger properties which have already agreed to sign might reconsider.

Yesterday Mr. Pearman said he had battled behind-the-scenes to solve the crisis.

These included extensive talks with the Labour Advisory Council.

He had also flown to Washington last week to meet the executive of Marcor, although talks failed to resolve the stand-off.

"To date, the only compromise that management has offered is to reintroduce dues payment and credit union checkoff to those employees who instruct them to do so.'' But Mr. Pearman said this was not acceptable to the BIU.

Mr. Pearman added the row had again be referred to the Essential Industries Disputes Settlement Board, which meets on June 28.

Mr. Jefferis last night declined to answer Mr. Pearman's criticism.

"We have considerable respect for the Minister and would certainly be more than willing to help him ensure there is no disruption.'' Mr. Jefferis, however, was damning in his criticism of the union, accusing it of using "Mafia'' tactics.

"It's like they are running a protection racket. You pay them or they will disrupt business.''