percent raise in the first year and a three percent raise in the second.

The deal between the normally contentious Portworkers Division of the Bermuda Industrial Union and Stevedoring Services has been hailed as a sign of improving industrial relations.

Labour Minister the Hon. Irving Pearman last night praised the two sides for the positive result.

"It is a reflection of them recognising some time ago that they had to develop a better working relationship,'' he said.

"They've been working hard at that for two and a half years, and I find they are taking pride in reaching a new agreement without my intervention. That's what we're trying to put across nationally.'' Mr. Pearman said the two sides worked consistently to improve communications "so when it comes down to negotiating a new agreement it can be done timely and to the satisfaction of both parties''.

The dockworkers' contract, which was reached just hours before the previous agreement expired on March 31, contains concessions that have been major stumbling blocks in recent years.

Unionised workers, for instance, agreed to reduce the size of gangs unloading ships. And the company agreed to reduce the required work week to 371 hours from 40, meaning workers are required to work 30 minutes less each day.

Another union concession resulted in a change in contract wording that will allow Stevedoring Services to virtually guarantee prompt unloading of all visiting ships. The changed clause in effect says "overtime will be worked''.

One company source said: "The impediments to overtime that existed in the old contract have been removed. In effect, the union has agreed that the port is a seven-day operation.'' Workers freed-up through the reduction in gang sizes are to be used to "strip'' containers, meaning imported goods should spend less time sitting on the docks.

Stevedoring managing director Mr. Mike Lohan said last night: "We are very pleased with the sincerity with which the union negotiators approached the talks this year. We feel the agreement is beneficial to the shipping industry, the community at large, the union and the company.'' BIU leader Mr. Ottiwell Simmons MP was not available for comment.

Mr. Pearman said the two sides had worked to develop mutual trust and an ability to see each other's point of view -- something completely lacking in previous years.

The union division has generally been regarded as the BIU's most militant. Its tight membership -- about 60-strong -- can be easily mobilised and any action it takes can have rapid impact on the local economy.

The company, on the other hand, has been criticised for its hardball reputation.

In the previous two negotiations, the docks have been brought to a virtual standstill while the two sides remained at loggerheads on such issues as overtime, manning and wages.

The unhealthy situation prompted American Mr. Laurence Seibel to lecture the two sides in his arbitrated contract settlement in 1991 -- a lecture that may have prompted a re-working of their relationship.

He said anything that disrupts or impedes the turnaround of visiting ships adversely affects the company and union and the "people of Bermuda''.

"Therefore, labour relations on the docks must be more than uneasy truce; rhetoric cannot replace reality,'' he said.

"It is management's responsibility generally to talk with the union before taking action which deviates `from the norm'.

"It is the union's responsibility to avoid work stoppages or slowdowns ...

and to make its disagreement or dissatisfaction known through the grievance procedure.''