Union.

And yesterday management -- fed up with the friction of wage negotiations -- offered new terms of employment to staff.

These included the pay increases put forward under the Prof. Ronald Haughton Award.

Among other terms were: Retroactivity; Increasing gratuities; Profit sharing; Incentive bonus based on guest satisfaction; Attendance bonus plan; and Major Medical, including doctors visits.

The hotel will also set up an Employee Rights Committee, with worker representation, to hear any grievances from staff.

Last night an angry BIU president Mr. Ottiwell Simmons said he was horrified by the development.

He said he would be meeting with Elbow Beach unionised staff at 3 p.m. today.

"We will discuss whatever has taken place between them and management,'' he added.

Mr. Simmons said Elbow Beach management had not told him about their action.

"I am very surprised they have acted in this way,'' he said.

Yesterday's move came after prolonged uncertainty over whether Elbow Beach, which has already broken from the Hotel Employers of Bermuda, would sign the Haughton agreement.

The Island's other large hotels have already agreed to sign.

Elbow has already labelled the award "lunacy'', saying it would drain resources.

Mr. John Jefferis, managing director of Elbow Beach Hotel and Development Company, said his decision stemmed from constant problems over wage bargaining.

"The tri-annual conflict between the BIU and the HEB is a costly non-productive way of solving disputes and the various hearings and boards that traditionally accompany that process drain ridiculous amounts of money from the already long suffering hotel industry, particularly by way of lawyers' fees,'' he said.

"Our priority is to look after our staff, and improve our business, this cannot be done by acquiescing like some of our colleagues and accepting the status quo.

"The status quo is not working. The internecine warfare between the BIU and HEB of the last 10 years has had a destructive effect on Bermuda tourism from both marketing and product perspectives.

"We have to continue to win the respect of our staff by virtue of good working conditions, fair treatment and fair remuneration and move on to a more enlightened way of conducting our business.'' Mr. Jefferis said the customer had to come first.

"Hotels that do not provide customer satisfaction, as a result of significant capital investment, outstanding service, and innovative product enhancement, will not be successful in the 1990s.'' Mr. Jefferis accepted the BIU had an enviable record in representing Bermuda's workers.

But management now considered it was able to satisfy current needs of employees, he said.