The Island's telephone customers face a third day of frustration today after BTC workers failed to reach an agreement in negotiations with management over a suspended colleague.

About 200 workers failed to show up to work yesterday after being told that they were not entitled to a full days pay when they marched out in protest at the suspension on Monday afternoon.

About 100 telephone company workers took part in that march, to the Bermuda Industrial Union headquarters, when they heard that a colleague had been given a two-day suspension for leaving her post.

Although the suspended worker could be back behind her desk today, the dispute has now escalated, with a Government advisor being brought in to mediate talks between the two parties.

Union bosses are claiming that management failed to follow procedure in not giving the suspended worker a verbal or written warning before suspending her.

They argue that workers were therefore entitled to walk out in protest and should be paid for any time missed from their jobs.

But management are just as adamant that, if the union is unhappy with the way a staff member has been disciplined, there is a set procedure to follow which does not involve downing tools.

Last night there appeared to be no end in sight to the argument, with both camps sticking firmly to their guns.

And the unofficial strike action, involving about half the company's 400 employees, is causing chaos for customers expecting to have new telephone lines installed or faults repaired.

A spokeswoman for the company said it was too early to say how badly customer services had been affected by the walkout.

"We will be having a management meeting in the morning and then we will be able to see,'' the spokeswoman said.

"But we have been trying to contact customers to reschedule service orders.

"There are two different disputes here. One started with the suspension of an employee.

"This company's position is that all dispute action needs to go through the proper grievance procedure.

"Dispute two is that workers walked off the job and are now demanding full pay and it's the company's position that BTC will pay all employees for all hours worked -- they will not pay for hours not worked. That is the company's position and probably the position of every other company.

"The other issue outstanding would be the fact that staff are still off work now and the company wants them to come back. Once that happens the other issues will be addressed but it must be done through the proper procedure.

"If there is a dispute over pay they have the right to file a grievance.

There's a proper channel for discussion for all of this but at the moment those channels are not being used.'' But BIU first vice president Chris Furbert insisted it was company bosses that did not follow procedure in handing out a suspension notice before giving a verbal or written warning. And he appeared equally determined for the workers to stand their ground, refusing to speculate on what further action might be taken.

"The situation at this point in time is that there has been no progress in the dispute.

"For the second consecutive day the BIU has tried to arrange talks with management with the assistance of Government Labour Relations officer Glen Fubler.

"We have been informed by Mr. Fubler that management are not prepared to meet with anyone until all workers have returned to work. That's the stumbling block. The workers haven't gone back to work today but I have no further comment to make.'' Talks mediator Glen Fubler last night refused to say if further talks will settle the dispute.