threatened by an Essential Industries Board decision on gratuities payments that hoteliers brand a "deal-breaker''.

Bosses at large hotels are fuming over the Board's decision ordering the retroactive payment to workers of gratuities that was not part of its January 14 contract settlement.

And their organisation, the Hotel Employers of Bermuda, has filed a protest with the Labour Ministry.

Hoteliers are also considering court action to resolve the dispute -- a move that could stall any signing of the contract in the foreseeable future.

At stake is an arrangement that could put hundreds of dollars into each hotel worker's pocket while taking tens of thousands of dollars from hotel coffers.

"It's a dealbreaker,'' one hotelier said. "There is a dispute on this and it's just so ridiculous that even I will spend good money to defend our position.'' The point of dispute is a ruling by the Board headed by American professor Ronald Haughton, who handed down the 1991-1994 contract settlement in January after more than 18 months of wrangling.

The Bermuda Industrial Union, in reviewing the award, asked the Board to support its argument that hotels should have paid workers gratuity increases during 1992.

The hotels countered that the Haughton Award did not include increases for that year.

They referred to Haughton Award language specifying increases were to come into effect "for each of the remaining two years'' of the 1991-1994 contract -- a statement that excluded 1992.

"Had the Haughton Award intended for the hotels to add (gratuities increases) for the period February 25, 1992 to February 24, 1993, it would have stated that the increase in the gratuities should apply to a three-year period, not simply for the `remaining two years,' '' HEB executive officer Mr. John Harvey said in an April communication on the issue.

"The hotels will resist vigorously efforts by the union to convene a further Board of Inquiry. The language in the Haughton Award is clear and unambiguous and requires gratuities increases for the tipped staff only in the remaining two years of the Agreement.'' At a special board hearing later that month, the Board recognised that "there is an ambiguity ... which must be resolved.'' "It is possible that the reference to the `remaining two years' should have been to the `remaining three years,' '' the Board said.

"In any event, the interpretive decision here is that the 25 cent increase applied to (1992) ...'' In fleshing out the issue, the Board cited a "clear and unambiguous'' passage from its January 14 contract award stating that gratuities increases adopted in an earlier contract arrangement "be continued throughout the period covered by this award ...

"This means that the 25 cents must apply to all four years of the Agreement,'' the Board said in its May 20 ruling on the issue.

Prof. Haughton noted that hotels had collected increased gratuities and held them in escrow pending a decision on retroactivity. He allowed that any hotel that did not collect gratuities at the increased rates did not have to pay them out.

But a hotelier last night said all hotels collected the increases as a hedge against retroactive wage decisions anticipated in Prof. Haughton's January 14 award.

"The hotels feel aggrieved that this is a reversal of the findings in the original January 14 document,'' the hotelier said. "It shakes our faith in the concept of the Industrial Disputes Settlement Board.''